Suspect Wealth – A Risk to Stability, Development and Sustainability: The case of Bermuda, the Turks and Caicos Islands, and Anguilla

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Thomas-James, Dominic William Rupert 

In the global financial architecture, British Overseas Territories in the Caribbean and North Atlantic are of material significance. Post-colonialism, these relatively homogeneous, archipelagic territories with financial centres have been the recipients of soft-domination by metropolitan interests. Through their inalienable right to self-determination and pursuit of autonomous governance and financial independence, many developed offshore financial centres to achieve sustainable development, with UK encouragement. Recently, and exacerbated by the Panama and Paradise papers, these jurisdictions are subject to increased pressure and ongoing perception that their financial centres facilitate criminality by harbouring suspect wealth, due to lack of transparency.

This doctoral thesis concerns suspect wealth as a product of economic misconduct like corruption, money laundering, tax evasion, fraud, and the increasingly controversial tax avoidance. It concerns suspect wealth derived from overseas or domestic misconduct, given law enforcement’s response is typically the same irrespective of origin. It focuses on three Overseas Territories: Bermuda, the Turks and Caicos Islands, and Anguilla. Through secondary research into their legal, regulatory and compliance regimes, it sets out to answer three main questions: How viable are international standards on suspect wealth in the context of these three jurisdictions? How willing and able are these jurisdictions to comply with international standards on suspect wealth? And, how can they better prevent their financial centres accepting suspect wealth? Given these standards are envisaged at international levels, the dissertation also considers whether a one-size-fits-all approach to the territories is appropriate. Proceeding on the basis that receipt of suspect wealth is inimical to development, it also discusses its impact on development for both countries from which wealth transits, as well as the overseas territories themselves, many having fundamental development concerns.

The research finds that universalism is a desirable aspect of the modern approach to tackling suspect wealth. However, a one-size approach is generally inappropriate for these jurisdictions. Contextual issues pertaining to capacity, resources and underlying considerations like the offshore confidentiality norm, mean that some standards are unviable – or that existing frameworks may be viable alternatives. On a critical evaluation of their legislation, international cooperation and reviews, it is suggested all territories demonstrate willingness to comply with international standards. However, their ability and levels of compliance vary. In summary, Bermuda demonstrates the greatest level of compliance and adherence. Turks and Caicos Islands’ compliance is a product of the last decade’s legislative and institutional reforms following constitutional crises. It is compliant in many ways, but aspects are still under development. Anguilla’s response is the least developed vis-à-vis legislation and institutions, however key anti-money laundering areas have received positive review internationally. This work also shows that fundamental legal protections, like privacy, are often eschewed in favour of transparency standards, some of which remain undefined. The research suggests recommendations to legislators and policymakers aimed at enabling them to better prevent suspect wealth entering their financial centres.

In acknowledging the facilitatively harmful role that can be played by these territories, this work draws upon evidence of implication in international cases which indicate a less positive view of the territories. Notwithstanding this, a purpose of this work is to question whether the degree of criticism that these, and other, small jurisdictions have encountered is warranted in light of their apparent willingness to engage in the enactment and administration of internationally accepted standards and legislation, and cooperate with international mechanisms and institutions. In this regard, the dissertation approaches a series of important issues for development and hopes to facilitate a more constructive, meaningful discussion.

Rider, Barry
British Overseas Territory, Bermuda, The Turks and Caicos Islands, Anguilla, Suspect Wealth, Development, International Development, Money Laundering, Anti-Money Laundering, AML, Corruption, Bribery, Anti-Bribery, Tax, Beneficial Ownership, Beneficial Ownership Information, Transparency, International Cooperation, Offshore Financial Centre, Offshore Financial Centres, Tax Havens, International Financial Centres, Confidentiality, Privacy, Secrecy, Counter-Terrorism Financing, Compliance, Integrity, Development Studies, Rule of Law, Fraud, White-Collar Crime, Finance, Financial Market Regulation, Financial Market Integrity, Legal Development, Institutional Development, Financial Crime, Economic Crime, Panama papers, Paradise papers, Constitutional law, Company law, Crown Dependencies, Market Abuse, Offshore companies, Mutual Legal Assistance, Transnational Economic Crime, Tax Evasion, Tax Avoidance
Doctor of Philosophy (PhD)
Awarding Institution
University of Cambridge