Panama: the big issues
The 6th Offshore Investment Conference took place in Panama on March 8th and 9th 2017 at the Hilton, Panama City. Topics ranged from sector reform to the family office, via Hong Kong, Dubai and Puerto Rico.
A central theme at the 6th Offshore Investment Conference in Panama, perhaps unsurprisingly, was change. How does the world of international finance respond to the damaging revelations of the “Panama Papers” scandal last year? And how much does it really need to change? For part of the challenge is to adequately respond to a public, media-driven, misconception—and to show the world that “offshore” is not, and should not, be the dirty word it has come to be of late. Nonetheless, there was wide acknowledgement that some parts of the industry needed to change.
The conference’s Chair, Derek Sambrook, introduced the programme for the sixth year running and opened with an assessment of truth and reality in Panama’s financial sector. Sambrook, of Trust Services, SA, Panama, explained how Panama’s—and the world’s—financial institutions are dealing with the fall-out, one year on. As Sambrook wryly observed, “Humans are the only animals known to blush. They are the only ones who need to.” Sambrook’s colleague, Krystian Robinson, continued the theme with a look at the scale and consequences of the leak.
The conference provided a discussion point for a wide range of topics—many of which looked beyond Panama to Asia, the US, the challenges facing international banking, a look at asset protection strategies in Puerto Rico, what Chinese investors need to know before moving to America, the defining features of Dubai, and an in-depth look at the family office and its status in today’s world. In between, panel discussions asked, of Panama, Where do we go from here? And, in closing the two-day conference, grappled with the nitty-gritty of client information and how its protection is to be ensured.
For all the issues facing Panama as it seeks to put the leaks and scandals behind it, the consensus at the conference was that the country is “better positioned” than many others in the region, by virtue of its location, explained Joseph Salterio, President of locally-based JS Management and Consulting. “The challenge now is for Panama to focus on what it does best: asset management and company formations. Panama needs to develop its mid-shore economy to be able to compete on a par with the likes of Singapore and Hong Kong. Panama needs to recognise where its strengths lie; it is not good at private banking.”
Saad Ishtiaq, General Manager at the British Chamber of Commerce Panama, praised the conference’s networking opportunities, “No two people here are doing the same thing—proof that offshore finance touches upon all areas of the economy, from shipping and exports to insurance and tax policy.”
On the latter, Luis Eduardo Bustamante has been advising the Panamanian government since 2009, in his capacity as a partner at EY. Bustamante explained the need for transparency and regulation across the world’s financial centres. And there is a new-found relentlessness in financial regulators’ quest for information. Yet he also pointed out that this is a two-way street, and the ongoing exchange of data is important for regulators and financial practitioners alike. Although, as Bustamante pointed out, there is a fine—and currently a rather blurred—line between compliance and breaching client confidentiality. This topic was picked up again by a lively panel discussion at the close of the conference on the second day.
Many of the jurisdictions that form the offshore landscape view the likes of Hong Kong and Singapore as possible models for their future incarnation. But there is another, nascent, mid-shore economy on offer in the form of Dubai. Urs Stirnimann explained the characteristics that make Dubai stand out as a centre for mid-shore finance, and their appeal to the wider world. Upper most among these is a legal framework built on English Common Law, and an English-speaking business environment. This foreigner-friendly set up is made still more attractive by the fact that Dubai is an all but tax-free destination in which to be resident. Stirnimann outlined the particular requirements for obtaining UAE residency, and the key benefits.
Joseph Field, an Attorney-at-Law at Withers Global, New York, described Offshore Investment’s Panama 2017 as “a great opportunity to bring together business leaders from around the world at a pivotal time for the industry. [Events like this] allow us to keep up-to-date with the latest ideas and issues.” Field gave two presentations, one on Asian clients, and their opportunities in America, and one addressing the role of the family office and its pros and cons and status internationally.
The two-day conference was rounded off with a panel discussion on how to protect client information in an age calling for freedom of information and across-the-board transparency. Derek Sambrook led the discussion between Rainelda Mata-Kelly (Law Offices of Rainelda Mata-Kelly), Carl O’Shea of Hatstone Lawyers, Joseph Field of Withers Global and Ramón Anzola of Anzola Robles and Associates. Existing laws governing client confidentiality frequently seem to be at odds with new demands for international exchange of information.