Appleby recently shot into the press as being the central figure in the Paradise Papers leak.
They are a law firm who specialises in helping people navigate the complex laws and regulations in order to set up an offshore enterprises. They help corporations, financial institutions or wealthy individuals to set up and register companies and trusts in overseas jurisdictions that have low or zero tax rates.
A database compiled by The Lawyer magazine named Appleby’s clients including HSBC, Barclays Group, Lloyds Banking Group, Royal Bank of Scotland Group, Goldman Sachs, KPMG, PwC and Santander UK.
The first Appleby practice was established in the 1890s by Major Reginald Appleby in Bermuda. During its 120 years of operation it has become one of the largest and well known legal groups in the industry.
Appleby has 10 offices around the world, in Bermuda, Cayman Islands, British Virgin Islands, Mauritius, the Seychelles, Isle of Man, Jersey and Guernsey. They also have a presence in Shanghai and Hong Kong.
Appleby has won the “Band 1” ranking which it was given by legal directories, making it one of the top-rated offshore law firms in the world. It was named offshore firm of the year by Legal 500 UK back in 2015.
Years of concerns
One interesting part of the leak was information about a presentation to its staff in Bermuda in 2012 which acknowledged that the company had taken on some risky business. These concerns were around “non-compliancy” with regulatory obligations like anti-money laundering policies.
Concerns were also raised in 2015 in letters from Bermuda’s Monetary Authority, the island’s financial regulator. The letter focused on Appleby’s money laundering policies, anti-terrorist financing checks and compliance with trust regulations.
In 2014, the British Virgin Islands Financial Services Commission warned Appleby that it was in breach of client checking rules.
A “high risk client register” was found in documents from Appleby’s British Virgin Islands office. This named people with important political or public roles in countries around the world including Russia, China and Greece. This led to “enhanced due diligence” during the vetting process for clients.
The public have long called for more transparency and a crackdown on tax avoidance. In 2013, Appleby joined an industry group who lobbied against David Cameron’s push for the identity of offshore company owners to be featured in public registers.
Now the company is in the spotlight, it’s likely that its practices will be under more scrutiny as the government is under pressure to tackle tax avoidance. However, so far the leaks have not revealed illegal activity so this could be tricky.
What do you think of firms like Appleby? Is there a place for them or should they be under more regulations? Let us know what you think in the comments below.