Bringers of Dreams, Spinners of Tales

Meanwhile, the Independent Commission for the Reform of International Corporate Taxation, an anti-tax avoidance group, has capitalised on the purge being waged against Russian oligarchs and their assets as the Ukrainian crisis deepens. Luxurious yachts have been an easy, visible target and some of which are owned by companies registered in the Caribbean. Although you would assume the exercise would be, shall we say, plain sailing, this has not been the case and it has exposed gaps in the transparency trail leading to beneficial ownership details.

An example of this concerns Roman Abramovich and two super yachts, Garçon and Halo that were found moored in Antigua. The authorities there wanted to confirm if the ships were the property of Mr. Abramovich, and this was confirmed by authorities in the British Virgin Islands. But the very next day the law firm Ince Germany sent letters to Antiguan customs officials stating that "Roman Abramovich is neither part of the ownership structure nor is he a beneficiary". Curiouser and curiouser, as Alice said during her adventures in Wonderland. Expect the screws to be tightened even further on Caribbean offshore centres.

Of course, the British Virgin Islands is already running the gauntlet after the premier was arrested in Florida on drug and other charges in April. This is déjà vu: we've been here before, only last time in the Turks and Caicos Islands, where one Chief Minister was arrested in 1986, also in Florida on similar charges.

The principal recommendation of the report on corruption in the British Virgin Islands, and released at the end of April, called for its constitution to be suspended. This is being vociferously contested by the island government and engendering outrage across the Caribbean. There appears to be, resulting from this, some confusion as to the territory's status. It is at present a dependent, not an independent, territory, of Britain, forming part of Britain's Overseas Territories. Sovereignty rests firmly with the Crown - although some would appear not to understand this. It will be interesting, however, to see how this all unfolds. At the time of writing the situation remains in limbo.

I have reflected on the fact that history – which is, after all, the study of human nature too – is the most reliable guide for making some predictions; especially those connected with both investments and political outcomes.  William Faulkner, the American Nobel Prize Laureate, is attributed with saying that “The past is never dead.  It’s not even the past”. Even when history is pushed to one side during a period of complacency, it is sure to return and haunt us, like the ghost of Hamlet’s father, yet again. 

In times of uncertainty the confidence trickster also flourishes, bearing in mind that this is a constant, rather than cyclical, phenomenon and so there is no respite. Homer, poet of the “Iliad” and the “Odyssey”, wrote about Hermes who was the herald of the Olympian gods as well as the Greek god of commerce and was said to be full of tricks and a bringer of dreams.  Today he is emulated by the conmen who count on a steady flow of fools all year round.  Bear in mind what Mark Twain reportedly had to say about April Fool’s Day: that it was the day we remember what we are the other 364 days of the year.

In the 14th century, magicians had their own bible called Secretum Philosophorum which included an explanation of how to turn water into wine by soaking pieces of bread in dark wine and then drying them in the sun.  Subsequently the bread could be dropped, unseen, into a jug after which the “miracle” could take place. The spinners of tales today can be equally absorbing, but in a different context; they have been able to become more adept at their black art because of the greater resources and corresponding degree of sophistication at their disposal. 

But it is wrong to assume that only the gullible are in danger; just because people are brilliant doesn’t mean that they possess an abundance of common sense and that they can't be bamboozled.  Far from it.  This often arises, with or without duplicity, when a person doesn't understand fully what he is getting into.  Crypto currency, for example, is a hotbed of controversy at the moment and when misinformation and malevolent manipulation are included in the mix, the results can be toxic, especially for the inexperienced. 

Samuel Coleridge, the Romantic Poet, famous for his poem, “The Rime of the Ancient Mariner”, had this to say about experience:    

"the light which

            experience gives is a lantern on

            the stern, which shines only on

             the waves behind us!”

            (The Collected Words of Samuel T. Coleridge, 1835)

Let's reflect and shine his lantern on the waves behind us for a moment. Enron Corporation, the American energy company, still remains a shining example of ignorance and chicanery that ensnared so many in its web of deceit, including lobbyists and consultants, who didn’t fully grasp the facts and failed to do the proper research.  Jeffrey Skilling, Enron's chief executive, was known as a dismissive boss; he publicly berated investment analysts who questioned his complex accounting methods.  Enron, in fact, made any meaningful research into the depths of the company's operations so daunting that a large number of analysts did not attempt the journey.  It was not that they were below-average in intelligence, it was simply because they were insufficiently qualified to understand the accounting; it would also be fair to say that others were either just not aggressive enough, failing to obtain adequate information, or were prepared to place their professional reputation on the line for generous fees. Can we all not find parallels between Enron and current events?

Enron set up an international web of companies in 62 countries and 23 US states that at the time frustrated investor scrutiny; but the largest number of subsidiaries (685, not counting duplicate names) were established not offshore, but in Delaware. Readers of my last article (Owls and Sheep[i]) will appreciate the ironical link with that article. In it I refer to the Tomato Test, underscoring that, often, offshore and onshore share common ground.

A Spanish proverb says that a wolf sheds its coat but not its vices. Whether its investments or the dishonesty of others, it is a sad fact that the light of experience doesn't shine clearly for all and some prefer to bury their heads in the sand, rather than in an informative book.

A final thought from Auden's evocative poem, “The Age of Anxiety”, which reverberates to this day: "We would rather be ruined than changed. We would rather die in our dread than climb the cross of the moment and let our illusions die."

Footnotes:

[i] https://www.ifcreview.com/articles/2022/march/owls-and-sheep/

Derek Sambrook
Derek 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 Topaz Services, S.A. (www.trustservices.net), a Panamanian financial services company. He was Treasurer of the British Chamber of Commerce Panama for several years. 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.