Anguilla’s Paradise Tarnished: OECD Report Reveals Financial Corruption Scandals and Lack of Transparency

This Caribbean island, known for its picturesque beaches, tax advantages, and celebrity hotspot, finds itself under unwelcome international scrutiny. According to the Organisation for Economic Cooperation and Development (OECD), Anguilla ranks at the bottom of its global transparency index, labeling it as a “non-compliant” jurisdiction for financial information sharing.

Anguilla: A Paradise for the Rich and Infamous

Anguilla has long been attractive to celebrities and high net worth individuals, including Michael Jordan, Sandra Bullock, Paris Hilton, and Justin Timberlake. Yet, now, Anguilla’s reputation for financial secrecy and anonymity is under the microscope.

Sliding Down the Global Transparency Index

Anguilla’s earlier ‘partially-compliant’ ranking in the OECD’s 2014 report has significantly deteriorated. From the latest report, only nine of the 53 requests made by foreign countries for information on Anguillian companies were met with satisfactory responses. Ambiguous laws and poor record-keeping led Anguilla to be rated as non-compliant in four out of the 10 tax transparency measures.

The Panama Papers Scandal: A Turning Point

Mossack Fonseca, the international law firm at the heart of the 2016 Panama Papers scandal, played a significant role in Anguilla’s problems. The loss of Mossack Fonseca’s records from the island during their office’s disorderly winding down has obstructed Anguilla’s ability to exchange information with other countries. Almost 90% of the requests made between 2015 and 2017 pertained to companies created by Mossack Fonseca.

A Forgotten Territory with Limited Resources

With a coral island population of over 17,000, Anguilla, a territory with modest resources, has found it challenging to completely comply with the OECD’s demands. Some critics argue that the OECD’s criticisms represent a continuation of its anti-free market and imperialistic crusade against Anguilla.

A Havens for the Anonymous and Criminal

Anguilla has been blacklisted by the European Union and several countries due to its lack of transparency. Anguillian companies have reportedly been used to conceal the proceeds of crime and facilitate fraudulent activities. Some instances of suspicious activities include an alleged Slovenian drug dealer registering a company on the island and a Fort Lauderdale financier setting up an Anguillian company to avoid creditors.

Courtship of Mossack Fonseca: The Beginning of Anguilla’s Struggles

In 2005, Ramon Fonseca, one of Mossack Fonseca’s founders, visited Anguilla and stayed at a beachfront resort. Anguillian officials wooed Mossack Fonseca, offering special deals and negotiating low fees to entice wealthy clients.

Lack of Information and Bearer Shares: The Dark Side

Mossack Fonseca marketed Anguilla as a cheaper alternative to the British Virgin Islands and promised to create thousands of companies annually. They emphasized the importance of secrecy and offered bearer shares as an attractive option due to their anonymity. However, Anguilla banned bearer shares in 2018.