Once the initial furore over the “Panama papers” has died down, a sober analysis will undoubtedly reveal that, whilst there will have been many examples of undisclosed or illegal arrangements, there will equally have been many clients of Mossack Fonseca whose affairs were perfectly compliant and who had valid reasons for setting up offshore companies or structures. What lessons should we draw for the future?
One reason individuals may have set up offshore structures is for confidentiality, particularly where their jurisdiction of origin is unstable or anarchic. The first lesson of Panama is that confidentiality will be an increasingly rare commodity in the future. Leaving aside unauthorised leaks, there is an inexorable pressure from the UK Government, the EU, the OECD and so on for greater transparency.