Welcome to the 2022 edition of our flagship publication IFC Review. Once again, we have gathered the elite of the industry to create the ultimate guide to developments across specialist international finance centres and the global movement of wealth.
In what has been another turbulent year, and just as we were starting to see the light at the end of the COVID tunnel, war breaks out in Europe. Whilst Ukrainians bravely defend their country, the global economy readjusts to yet another challenge. In our introductory article, Mark Pragnell examines the implications of the invasion on the global ‘cross-border facilitation’ industry and considers the evolving role of IFCs as the global economy faces a new world order. The author contends that IFCs will potentially have to “choose allegiances that will constrain the future path of the industry they host and benefit from”.
The impact of these current geopolitical trends is further examined by Geoff Cook (page 14), who discusses the FATF’s urgent call for states to implement rapid information sharing to mitigate AML/CFT risks in light of the conflict – the pressure is on for IFCs to continue to meet and exceed international transparency standards.
Beyond the threats posed by the Russia-Ukraine crisis, IFCs have yet again had to counter spurious regulatory and reputational attacks, the latest leak being the recent publication of the Pandora Papers which cast the mainstream media spotlight on the offshore industry once again. However as Martin Kenney and Jamie James highlight in their article, “the use of oﬀshore structures to hold wealth is not, in and of itself, a corrupt practice which justifies exposure”, and they comment that the ‘leak’ has prompted a renewed debate on the importance of transparency versus privacy.
Furthermore, Andrew Morriss and Charlotte Ku argue that “Those seeking to restrict IFCs’ roles in the global economy rarely see beyond their focus on (often speculative) tax revenue losses resulting from tax competition.” It is this tunnel vision that causes onshore politicians and international standard-setting bodies to often look past the value of IFCs in the global economy.
Beyond regulatory matters, our extensive global overview section delves into the credibility of ESG metrics, the use of donor advised funds in international philanthropy, developments in the use of arbitration in Caribbean IFCs; and the changing investment landscape for trustees.
IFCs across the globe continue to enhance their offerings through legislative and regulatory reforms. 2021 saw the passing of the Investment Funds Amendment Act in Bermuda; while Hong Kong continues to take initiatives to advance its position as an asset and wealth management hub through the introduction of new fund structures; and Switzerland is currently reviewing the possible introduction of a trust law. These developments and more are covered in our comprehensive jurisdiction section, supported by comprehensive fact files on more than 20 specialist IFCs.
In 2022, IFCs and the world continue to be confronted with geopolitical and economic upheaval. However, facing these challenges, IFCs continue to, as Paul Byles notes on page 34, provide a measured response to every obstacle thrown their way, continuously innovating and growing while bearing the brunt of international criticism. IFC Review is there every step of the way, charting the positive contribution made by these finance centres and championing their ability to adapt, innovate and evolve in response to changing world dynamics.