There are legitimate reasons for the use of offshore structures in jurisdictions like Panama and the Bahamas, such as to reduce or eliminate legally individual and company taxes. However, these structures also present opportunities for money launderers and terrorist financiers to hide potentially illicit funds. With the latest release, the International Consortium of Investigative Journalists’ (ICIJ) Offshore Leaks Database now contains information on nearly 500,000 offshore entities.
Going forward, firms need to be further prepared for regulatory reviews across all of their offshore exposures. Regulatory requests for know-your-customer (KYC) information are going to increase. Firms should be taking preparatory steps now to ensure that they are able to respond promptly, fully and accurately to such requests.