Compliance and reputation: absolute priorities for Bermuda
It’s déjà vu all over again. The actions of a few impacting the welfare of thousands.
Much was written last week about the British Virgin Islands and its leaders, concerning “possible corruption or other serious dishonesty in relation to past and present elected members of the legislature”, along with serious discussions arising for actions to dissolve its constitution and parliament.
Cynically, this latest news is not the first (or the last) in reports of purported (and convicted) wrongdoing by country leaders and politicians in positions of trust.
Thirteen years ago, on March 16, 2009, the new Governor of Turks and Caicos, His Excellency Gordon Wetherell, published the Commission of Inquiry’s Interim Report authored by the Right Honorable Sir Robin Auld after a UK Foreign Service 2007 inspection observed residents’ fear and circumspection regarding suspected high-level malfeasance. That same day, the then Foreign and Commonwealth Office Minister with responsibility for the Overseas Territories, Gillian Merron MP, stated to the UK House of Commons that the Commissioner had identified: “a high probability of systemic corruption or serious dishonesty”.
In her view, this, together with “clear signs of political amorality and immaturity and of general administrative incompetence, have demonstrated a need for urgent suspension in whole or in part of the Turks & Caicos Constitution and for other legislative and administrative reforms”, along with change in other related matters.
On the basis of Sir Robin's interim report and the "accumulation of evidence in relation to the TCI over the past year or so", the UK Government accepted the Commission's view that it was necessary to suspend parts of the TCI Constitution.
And the rest is history, documented in the Commissioner’s detailed report as well as providing sensational fodder for news media to an always salacious-details obsessed audience, then the news though superseded by the next scandal, resides in available search engine archives.
All was not negative about this calamity, as often ”something good comes from the bad”, as we shall see – read on.
In 2014, the now retired Governor, Gordon Wetherell, was a featured speaker at the second annual Bermuda Financial Crimes and Compliance Seminar where in a riveting speech, he illuminated his exhaustive details of the daunting challenge to rescue a collapsing economy, stabilise financial cash management, restore accountability, appropriate legislation, and good governance to the country – a more than five-year process.
Governor Wetherell then cited Bermuda as an absolute contrast, a standout, as an exemplar model of a modern, highly-regulated diligent quality-based finance jurisdiction!
He was quoted as saying: “Here in Bermuda, early far-sighted decisions to put in place a legal framework to attract the offshore insurance industry at a time when it was looking for a new base enabled Bermuda to become a significant insurance centre with major insurance and reinsurance companies headquartered in the island or with local operations in Bermuda.
“Decisions to impose strict Know Your Customer requirements on overseas clients and the development of the Bermuda Monetary Authority's role in conducting its own due diligence on company incorporation applications provided a sound platform from which to build up its credibility as a regulator and ensure that business which came to Bermuda was of high quality with consequent benefit for the economy of Bermuda and the reputation of its financial centre.
“As global standards in regulation continue to rise, so established businesses increasingly see it as crucial to their own ability to do international financial business effectively that the reputation and capacity of regulatory authorities keep pace and that there should be close collaboration between industry and regulator to this end. These considerations of reputation and capacity in turn act as a magnet to attract new business – and by the same token the competition and entry costs for other jurisdictions become tougher.”
For more than 400 years, Bermuda earned a dominant place “In the Eye of All Trade” – a quote from the wonderful book of the same name by Michael Jarvis.
Still today, Bermuda enjoys an impeccable enviable reputation as an international financial centre of transparency and integrity. This hard- earned reputation was built by those who came before us: visionaries, luminaries, ordinary citizens, legislators, politicians, government, and private business-based professionals who worked to build our current infrastructure to global capital markets standards.
We are so grateful to them.
However, we cannot rest on our reputation.
We cannot relax for one minute.
We cannot afford to be complacent.
In today’s sophisticated electronic world, every individual, entity, and jurisdiction is within the reach of, and fodder for internal and external criminal attack.
We are reminded daily by The Wall Street Journal Risk and Compliance Section – the morning risk report that details the staggering, never-ending list of compliance negligence, egregious criminal acts (and prosecutions).
Bermuda must have all appropriate laws, fortuitously enacted that meet and exceed global standards, ever strong enough to enable and support our regulatory, financial, and judicial systems in preventing threats that can destabilise our businesses, our economy and most importantly our jurisdictional reputation.
We, as a people, have a personal challenge to be rigorous in upgrading our professional skills, to gain knowledge, to hone our intuitive ability to recognise internal and external threats to our systems, or when even unwittingly caught in a possible compliance maelstrom of unintended consequences, have the commitment to counteract them in order to maintain our quality of island life.
The impact on any country’s reputation by slip-ups in the finance, legal, economic and compliance environment, improprieties, and inappropriate actions by leaders and/or country influencers, associations with less rigorously governed jurisdictions and less than stellar people, will cost its inhabitants dearly, and permanently.
Because the goalposts keep moving.
Governor Gordon Wetherell kindly provided the author permission to quote his fascinating speech. Contact firstname.lastname@example.org for a PDF copy
Turks and Caicos Islands – Foreign Affairs Committee, https://publications.parliament.uk/pa/cm200910/cmselect/cmfaff/469/46904.htm
Turks and Caicos Islands Commission of Inquiry 2008‐2009 Report of the Commissioner, Sir Robin Auld.
• Martha Harris Myron JSM is a native Bermudian with US connections. Amazon / Apple published author of Dawn of New Beginnings, Book One of The Bermuda Islander Financial Planning Primers, and a Google News Contributor.All proceeds from these articles are donated to the Bermuda Sloop Foundation