17 November, 2007

Managing Risk

The National Audit Office. This is a UK institution, not Anguillian. The National Audit Office scrutinises public spending on behalf of Parliament. The Comptroller and Auditor General, Sir John Bourn, is an Officer of the House of Commons. He is the head of the National Audit Office, which employs some 850 staff. He, and the National Audit Office, is totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

The NAO has just published its Report titled, Managing Risk in the Overseas Territories. It can be downloaded or read here: [link]. There is much on Anguilla that should worry us. Most of the concerns relate to the International Financial Services Industry. In its early days, this industry was demeaningly described as “offshore banking”. It is much more than that. It is one of the principal industries enjoyed by the City of London and Manhattan. These are two of the major international financial centres in the world. But, we in the West Indies are players too. Cayman Islands is the fifth largest banking centre in the world. Bermuda is one of the largest reinsurance centres in the world. BVI is the world’s major incorporator of companies. Anguilla has hopes and aspirations of joining this elite group of British Overseas Territories who provide the City of London and Manhattan with its offshore corporate vehicles. There is just one problem. In the past, criminals have used the offshore centres to launder illegally obtained funds. The British government is wary of our efforts to grow the industry. They insist that we put precautions in place to limit the damage that we, and possibly they, can suffer.

When I was a practicing lawyer, I spent a lot of time and money developing a legal practice in this field. I went to the international and regional conferences to hone my skills and to make the necessary contacts. I devoted time to writing and speaking about the importance of the industry for Anguilla. The hope was that we would be able to diversify our economy. We need alternatives to the tourism industry. It is not safe for us to put all our eggs in that one basket. International financial services offered an opportunity for Anguillians who obtained the necessary qualifications and skills to make a good living for themselves and their country.

So, I read the Report with a view to seeing how Anguilla was faring. It is not all good. For example, I found,

3. Capacity limitations in the offshore financial sector have limited Territories’ ability to investigate suspicious activity reports, and, in the case of the Turks and Caicos Islands, Anguilla and Montserrat, resources are below the critical mass necessary to keep up with increasingly sophisticated international standards and products in offshore financial services. The Department, [the FCO] with the support of relevant UK agencies, (Treasury, Financial Services Authority, Serious Organised Crime Agency) should develop a strategy to ensure stronger investigative and prosecution capacity, bolster regulatory standards and support increased legislative drafting capacity.

What is our government going to do to make the necessary improvements? Are we even interested in seeing improvements? Well, now I am retired, I am well out of it and can contribute very little any longer. It is a worry for the new generation of Anguillian professionals. I wish them luck!


  1. Anguilla has a independent financial services commission of whice the Governor is the head. I suggest looking at their website and see what they are doing about it.

    Most of this activity has been removed from a Ministerial responsibility.

  2. Desperate for attention, some will only scream that this is further evidence that "the British don't give a damn about us, and will continue not to give a damn about us. They never have, and they never will."

  3. I think that the UK does need to provide help in this matter - as the NAO report points out, quite rightly. The previous two posts tend to think that there is a deficiency with Anguilla and are somehow blaming the British - I tend to take the view that the UK (which has financed the AFSC) is finding fault with something it has responsibility for & is trying to do something about it. I wish there was more of this openness in Anguilla.

  4. Yes, the NAO report is most commendable, and we need a similar independent reporting organisation in Anguilla. The Anguilla equivalent of the NAO is our Auditor General. Several of the Overseas Territories have dynamic Auditors General who take leadership positions on their islands, speak out on issues of controversy and even call names. Bermuda's Auditor General is so effective that he was taken away and held in jail overnight during an investigation of leaked documents that greatly embarrassed the Premier and some of his Ministers.

    Anguilla's Auditor General is a waste of money. He is so quiet that hardly any of us even know his name. He speaks not, and his work seems to be another State Secret.

  5. And of course because this British
    Government Office says so, it is so.

    What measures are they applying in arriving at this conclusion? Is it the same yardstick they apply to the World's largest Offshore Haven, London, England??

    Why do they continue to perpetuate the lie about "Contingent liabilities"?

    They, like most sensible people, know that the U.K has NO legal or Constitutional Liability for ANY Colony's debt, or otherwise, except where they expressly and in writing Gurantee same.

    Sounds like the age-old excuse to dictate to the "governed"; shades of pre-1950's British Colonial Practice, cloaked in "responsibility" etc. This, from the same group which Black listed Independant Countries into doing their bidding. Blackmail.

  6. England itself is one big contingent liability. With it socialist laws and weak on crime, it is imploding from the inside and the terrorists are taking over.

    I suggest the entire Europe take a new look at reforming itself or the radicals will continue to abuse their liberal laws. LOndon and Berlin are the headquarters for money laudering and financing radical groups, mafia and drug lords.


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