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Baker & Partners Prepare Jersey Businesses For Next Round of Panama Paper Disclosures

May 2016

Last week, William Redgrave and Ed Shorrock, from Jersey-based specialist dispute resolution practice Baker & Partners, delivered a Breakfast Briefing on the "Panama Papers" to Jersey’s financial services community.

The briefing examined the reputational and legislative impact for Jersey of last month's publication of swathes of confidential information from Mossack Fonseca's files going back 40 years, and prepared local companies for another round of disclosures on 9th May, when a searchable database of 200,000 companies, trusts, foundations and funds will be released to the public in connection with the leak.

Advocate William Redgrave, Partner at Baker & Partners, outlined the content of the papers released so far, which identify 215,000 entities set up in 21 jurisdictions. He referred to press criticism of some practices engaged in by Mossack Fonseca.

He warned businesses of potential litigation following the 9th May database release, which is likely to include structures with Jersey links. He advised Jersey firms who have used Mossack Fonseca to assess due diligence and commercial rationale, and take a proactive approach ahead of creditor or journalistic scrutiny.

Ed Shorrock, Director of Regulatory Services at Baker & Partners, looked at the developments Jersey can expect to see over the coming months, including increased media focus on all offshore jurisdictions, the return of blacklists, pressure to share UBO information with other countries automatically and a push to make offshore registries of all entities public. He explored the significant announcements expected at the UK anti-corruption summit in May, with legislative developments in the UK including the criminalisation of companies for failing to prevent their staff facilitating tax evasion.

Ed also explained how central registries in the English form are not the panacea they are being presented as, and suggested that the Jersey model which relies on regulated and trained service providers gathering the due diligence is likely to be more cost-effective and reliable.

William Redgrave commented:

“While the Panama Papers have not so far contained much that is surprising to those working in International Finance Centres, their impact is being felt in Jersey thanks to renewed pressures on politicians to appear to be ‘cracking down on offshore’. Jersey businesses may face litigation from creditors if further disclosures identify them as holders of relevant information, or as targets for compensation. With the next round of disclosures due on Monday, Jersey businesses should take a thorough look at their records for the last 40 years to consider any dealings with Mossack Fonseca, and, if necessary, seek legal advice sooner rather than later.”>

Ed Shorrock commented:

“The next few months will be pivotal for Jersey following the release of the Panama database. With the push we’re seeing in the media for central registries, it’s important that legislators understand that transparency is not an end in itself - it is part of the answer but access to sensitive information needs to be balanced against legitimate privacy concerns.”

To find out what the Panama Papers mean for your business from a legal perspective please contact William Redgrave or Ed Shorrock, or call Baker & Partners on (01534) 766254.

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