Panama Papers – how Cyan can help

We have a sneaking suspicion that last month’s breaking news will continue to feature in the headlines for many months to come – possibly even years.

The Panama Papers have prompted a global furore and general feeding frenzy amongst journalists worldwide. Quite why this is so is somewhat puzzling but, in part, it is likely to be the result of increasing moral pressure on countries to demonstrate their tax regimes are fair and that matters of tax evasion are not brushed under the carpet.  So, what are governments doing about it?  Well, in addition to making sure they are seen to be collecting the right amount of taxes, they are turning to their regulators and asking, “and what are you proposing to do?”  The ensuing pain endured by regulators is palpable; especially as they bear the burden of responsibility for ensuring the rigours and reputations of well-regulated jurisdictions are being upheld.

But such discomfort doesn’t stop there. Unsurprisingly, the pressure is now piling up on regulated communities to review their respective client bases, both current and former, and report back to their regulator with their findings.  In the absence of any prescribed parameters for such an exercise, the task is not only thankless, but arguably also of little value unless the regulated entities (and indeed, the regulator) are able to interpret and address the findings.  That said, the clamour for a review to take place is well founded and consequently it should be adhered to.  If nothing else, it will stress test IT platforms and client databases to the limit, establishing whether they’re capable of retrieving archived records at the push of a button.  For other firms, such a review may involve a trip to a farm in the back of beyond where stands a rusty container in which decomposing data is stored.  Fingers crossed, it’s the former.

Also to consider, is a significant proportion of the alleged 14,000 financial intermediaries who have used the services of Mossacks no longer exist; they will be names of the past. Whilst some have been subject to takeovers or mergers, there will be others which local regulators have named and shamed, or quietly encouraged the business to “put the shutters up”.  Then add to the mix, Trust and Corporate Service Providers will probably have been maintaining a policy for the destruction of records that go beyond a certain date.  This could well add an unnecessary layer of complication.

For those businesses that are unwilling to cooperate with such a request from the regulator, or who do not undertake a meaningful and comprehensive review, they can be assured there will be consequences.

At a time when firms are already stretched and when it is essential to undertake a swift but effective review, Cyan can help in the following ways:

  1. Advising on the scope of the review, to include the identification of appropriate parameters in order to ensure the review is efficient and provides sufficient comfort;
  2. Providing resources to facilitate the review;
  3. Assisting with the identification of risks, or potential risks, arising from any findings;
  4. Where appropriate, assisting with the crafting and implementation of an effective remediation or action plan; and
  5. Advising on the maintenance of a positive regulatory relationship throughout the process.

To discuss how we can help, please call us on 880659.