A leading academic has urged policy-makers to stop trying to combat corruption by introducing new rules and instead to spend more time determining the effectiveness of the rules already in place.
Speaking at the Jersey Finance Annual Private Wealth Conference 2017, Jason Sharman, Professor of International Relations at Cambridge University, suggested that there was a mismatch between the cost of solutions being rolled out by governments, and the effect they were actually having in countering grand corruption.
He also said that the increase in legislation was not being driven by facts but by an "industry of numbers" which frequently overestimated the amount of illicit activity taking place.
Professor Sharman told delegates: "Policy makers should stop introducing new rules and spend more time finding out to what extent the current ones are working. Often there is a real mismatch between the expense of solutions being proposed and the effect they are having or likely to have. Further, whilst there is a lot of talk from major developed countries about transparency, and public registers specifically, in a number of cases it is largely window dressing. Administrations around the world need to be able to investigate and access data, but the privacy of individuals must also be protected."
Professor Sharman was at the conference to discuss the findings of his new book 'The Despot's Guide to Wealth Management', which sets out the findings from his research into corruption and the policies being introduced to tackle it. It follows his presentation at last year's conference during which he analysed the effectiveness of central registries and licenced intermediaries in combatting crime, as set out in his paper 'Solving the Beneficial Ownership Conundrum: Central Registries and Licenced Intermediaries'.
Geoff Cook, CEO, Jersey Finance, said: "Last year our conference was held just four weeks after the Panama Papers were published and he was a rational voice in an environment that, at times, reached levels of hysteria. It was fantastic to have Jason's independent analysis of the effectiveness of different jurisdictions in combatting financial crime. He has provided very sage advice again this year: amongst all the noise around transparency and public registers, he has urged governments to pause and assess just how successful initiatives are in combatting financial crime.
"Whilst individuals absolutely have an obligation to pay their taxes where they are due, they also have a human right to personal privacy – the two are not mutually exclusive. With several major economies, notably the US, Hong Kong and Singapore, showing no real interest in public registries, there are real question marks as to whether they are really the holy grail in countering financial crime. Jersey's approach to compliant confidentiality and its regulated beneficial ownership model we feel balances the need for global cooperation and personal privacy well."
A record number of delegates for a Jersey Finance conference attended last Tuesday, 16 May. Almost 450 professionals from across the private wealth industry heard panellists at the half-day event, entitled A New Harmony, discuss how the sector was responding to market disruption, regulatory change and other pressures including Brexit.
Mr Cook told delegates: "We believe firmly that our links with the UK and our British values will remain highly attractive as Brexit unfolds. Indeed, we have been working closely with bodies including the British Private Equity and Venture Capital Association, City UK, and the Confederation of British Industry, to explain both Jersey's experience as a successful third country and illustrate how Jersey can play a vital and mutually beneficial role in supporting family wealth planning, enabling philanthropic ambition, and providing specialist cross-border governance."
Richard Hay, Partner at Stikeman Elliot, suggested that growth in global wealth, together with London's anticipated ongoing dominance as Europe's leading finance centre, and Jersey's past experience in successfully implementing anti-money laundering and financial crime initiatives, meant that Brexit gave Jersey a "potentially huge opportunity" to provide access to highly valuable global capital as the UK's negotiations progressed.
The conference, moderated by Nick Robinson, included panellists James Quarmby, Partner at Stephenson Harwood; Tim Robinson, Partner at Schillings; Siobhan Riley, Partner at Carey Olsen; Zillah Howard, Partner at Bedell Cristin; Kathryn Purkis, Barrister, Serle Court; Naomi Rive, Group Director, Highvern; and Andrew Morriss, Dean of Texas A&M University School of Law. Behavioural economist and journalist Tim Harford provided a closing address.
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