More than 150 years ago Henry David Thoreau, in his book entitled Walden published in 1854, implored us to "simplify, simplify, simplify". Thoreau was a famous American essayist, poet and (importantly) practical philosopher. He set out to seek a simpler type of life, believing strongly that one should act on one's individual conscience rather than necessarily following laws and government policy. He was an original thinker and much of what he wrote about is still valid, especially today.
In his book Where I Lived, And What I Live For, he shared his reflections and insights after spending 18 months living in the woods in a home he built himself. To quote from his book: "Simplicity, simplicity, simplicity! I say, let your affairs be as two or three, and not a hundred or a thousand....and keep your accounts on your thumb nail...". The uncluttered and remote life he advocated surely has some relevance today, considering the strain placed on many shoulders because of the present pandemic, not to mention a political and business world that has succumbed to so much gobbledygook.
In his essay, Politics and the English Language published in 1946, George Orwell bemoaned the state of affairs and said that political language "is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind". Thinking about the Organisation for Economic Co-operation and Development, not to mention the European Union Commission, 75 years later I find Orwell's arguments are just as apposite.
Certainly, when I drafted the trust ordinance for the Turks and Caicos Islands back in 1989 using an Amstrad computer (which today qualifies as a museum piece), my intention was to craft as plain and simple a law as possible - and ensuring that it would pass my Casablanca test. This piece of legislation endured, without material changes, for more than 20 years and was replaced in 2016 to reflect advances in the trust industry.
Casablanca is a film made in 1942 starring Humphrey Bogart and Ingrid Bergman which became an unintended classic. The film's theme tune, “As Time Goes By”, tells, through its lyrics, that “the fundamental things apply, as time goes by”. And so it is with trusts, which I describe as the chameleon of succession planning, after the name of the lizards that I found in my garden growing up as a boy in Africa. They can change colour in order to blend in with their immediate surroundings; trusts have the same adaptability and yet the fundamental things do still apply. Like the three certainties test that creates a valid trust under English law, being evidence of intention to create one; subject matter to be held under the trust; and a defined object (someone or something to receive benefit). How wonderful it would be to know that there were three certainties, facts set in concrete, in today's business world that is shrouded by COVID-19 confusion, often not helped by the media.
We know how elements of the press can be mischievous, to say the least, and international financial services have been, and continue to be, an easy target. Top of the list has been the ubiquitous offshore company. Ambrose Bierce defined a corporation as “An ingenious device for obtaining individual profit without individual responsibility”. This is one of the many definitions to be found in The Devil’s Dictionary written by this American Civil War soldier, wit and writer who put his own mischievous slant on common words.
In fairness, the industry in its time has attracted some individuals who are best categorised by the title of a song recorded in 1971 by Cher, an American singer often referred to as the "Goddess of Pop": Gypsies, Tramps and Thieves. Even so, sensationalism has been turned into a fine art by a breed of journalists that George Orwell identified in his 1946 essay: "Modern writing at its worst does not consist in picking out words for the sake of their meaning and inventing images in order to make the meaning clearer. It consists in gumming together long strips of words which have already been set in order by someone else and making the results presentable by sheer humbug”. No wonder Thoreau fled to the woods and Orwell ended his days on a remote Scottish island.
Separating truth from trash is not easy if you are a reader with little or no knowledge of the subject matter; along with other gullible souls you can collectively, and foolishly, reach a consensus. Herein lies the danger of Groupthink, a term made popular in a 1972 book with the same title written by Irving Janis, a psychologist, who was apparently inspired, in part, by the Bay of Pigs fiasco in 1961 when a group of influential members of President John F. Kennedy's administration decided to support an intended coup in Cuba. In retrospect, one wonders how a group of, apparently, intelligent people could decide to do such a foolish thing, underscoring views held by the late John Kenneth Galbraith, the Canadian-born economist, diplomat and intellectual, whom I quoted in my June article, expressing his wonderment at such folly. This supports the argument made by Janis about the danger of only listening to like-minded people that will only reinforce your own viewpoint.
What's needed is a diversity of ideas, knowledge, and perspective - especially so in the ranks of the bureaucrats charged with supervision of financial services. Until this changes, the wrath generated and expressed by practitioners in the field will not change. It came as no surprise to me when I read in an article written by Mark Battersby (5th August 2021), the editor of International Investment at Incisive Media, about his allegations that the Tax Justice Network (an organisation that well and truly fits the mould) has no-one working for it, or even advising it, who has ever worked in tax, or accounting, or financial services.
Regulators, who are at the sharp end of supervision – particularly in the Caribbean – must be adequately equipped for the job. This was nicely spelled out by the late Charles A. Cain in the collection of his commentaries published in 2011 entitled What Is It All About? I met him at Oxford University where we both chaired and spoke at seminars some years ago. To my mind he was, at the time, the Isle of Man's wise man of offshore financial services, besides being a true gentleman and a fine scholar, who hammered home in his compilation of commentaries (page 13) that it was of vital importance for a regulator to have "knowledge of the pressures of the marketplace" if he was to have any chance of understanding the view from the other side of the fence. Aristotle declared that "for the things we have to learn before we can do them, we learn by doing them" (Nicomachean Ethics, 350BCE). The quote is centuries old, but some things never change "as time goes by".
Derek R. Sambrook is a member of the Society of Trust and Estate Practitioners in the United Kingdom and obtained the Trustee Diploma of the Institute of Bankers in South Africa in 1973, becoming a Fellow of the institute in 1996. He emigrated in 1977 from Rhodesia (now Zimbabwe) where he was branch manager of a trust company and continued his profession in North America (Miami), Europe (including London and the Channel Islands), and the Caribbean (including the Cayman Islands). He has lived in Panama since 1996 where he is the Managing Director of Trust Services, S.A. (www.trustservices.net), a Panamanian trust company and former Treasurer of the British Chamber of Commerce Panama after several years of service. Mr Sambrook‘s regulatory experience began in the corporate division of the Rhodesian (now Zimbabwe) Ministry of Justice (1965-1970) and subsequently he was appointed by the British government (1989-1992) as the first Bank, Trust Company and Insurance Regulator in the Turks & Caicos Islands, British West Indies; he established a regulatory body and drafted trust and insurance laws, banking and other regulations including licensing guidelines. As a direct result of his innovative captive insurance law, the Turks & Caicos Islands at the end of his contract had more than 5,000 producer-owned reinsurance companies and was the leading domicile in the world for this service. During his tenure he was also an affiliated member of the Latin American and Caribbean Banking Commission and Chairman of the government’s Offshore Financial Services Committee. He was a columnist for a leading United Kingdom offshore financial journal for over 15 years. His newsletter, Offshore Pilot Quarterly, has been published since 1997. In 2021 he celebrated 50 years in the trustee profession.