Will the Panama Papers leak be the beginning of the end for offshore financial centres?

Revelations of offshore tax avoidance and evasion have shaken the world (Source: Getty)

Robert Palmer, head of the Global Witness Money Laundering Campaign, says Yes.

The Panama Papers lay bare how corruption, tax evasion and a whole host of other crimes are made possible by offshore financial centres. And the UK is deeply involved. Over half the companies named in the leak are registered in the UK’s tax havens, with an incredible 50 per cent coming straight from the British Virgin Islands. David Cameron describes corruption as “one of the greatest enemies of our time” and is hosting a landmark Anti-Corruption Summit in May to do something about it. This is an unprecedented opportunity. The single best way to solve these problems would be to require the UK’s tax havens to open up their books to public scrutiny. The more information is in the open, the harder it will be for those with something to hide from using our tax havens. Corruption damages our economy and makes our country less safe. Cameron’s leadership on this issue now faces a credibility test. The world will be watching to see if he delivers in May.

Gareth Tilley, a barrister at Serle Court Chambers, says No.

Trusts and companies have each been around for hundreds of years – and both their histories are peppered (some might say littered) with examples of abuse of the system. The courts in England and elsewhere have a steady diet of cases requiring them to draw the line between legitimate and illegitimate uses of such structures (both on and offshore) and, over the last 10 years at least, have become steadily but consistently less tolerant of practices that fail the sniff test. The leaking of the Panama Papers will certainly bring the practices of offshore financial centres out of the Chancery division and into the spotlight, but for now it is unlikely to provoke any immediate legislative response in the UK at least. The leak comes only days before legislation requiring English companies to maintain registers of “people with significant control” over them comes into force. Lawmakers will want to see how effective such controls are before deciding whether the facts justify any further crackdown.

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