Pandora Papers: don’t get lost in the detail
The ICIJ have yet again demonstrated their immense journalistic and investigatory talent. The Pandora Papers run to 11.9m documents from 14 different offshore services firms. There’s lots of comment already on their existence as well as perspectives and emotional reactions regarding the “rich getting richer” and “government action required”.
At Avyse, we don’t disagree with any of the above. But when events like this occur, we have to remember what our job is:
Be a proactive, supportive steward to our clients
Raise awareness in a measured and informed manner
Keep our eyes on the purpose – of the regulations, of our employers and of our jobs, and the extent to which we can prevent real harm
Help define, direct and deliver pragmatic and practical steps that keep our clients safe and secure
Ensure you can take the actions that you needs whilst delivering already challenging BAU and change agendas
There will be a lot of very interesting insights coming out of the leak this week. There will also be a lot of noise and distraction. We expect that regulators, as they have done with previous leaks, will write to firms in due course, asking how they have responded to the leaks, what they have found and what action they have taken.
We recommend being on the front foot with your response, but also being sensible and pragmatic. There’s a lot of data in this leak and it will be easy to get distracted. Your response will need to consider:
Exposure: Understanding any direct or indirect exposure you have and quantifying it in terms of legal, regulatory or reputational risks
Planning: Your plan will depend upon your exposure. Keep it focused.
Containment: Ensuring any direct risk is actively managed
Remediation: Fixing identified issues e.g. exiting relationships or updating due diligence gaps identified
Communication: Internal and external communications with staff, regulators and potentially even the public. Communication strategy will be dependent upon the outcome of other steps
Continuous improvement: Improving broader systems and controls based on the learnings from the process above, for instance this might include enhancements to due diligence procedures or tuning of transaction monitoring rules
We can help you meet your regulatory expectations in a targeted and efficient manner. Working in line with the steps above, Avyse Partners will keep you on the right side of regulatory expectations.
And, for what its worth, our more personal perspective:
Much of the activity in the leaks, whilst morally reprehensible, is perfectly legal or seems to be beyond law authorities reach. Whilst FIs often bear the brunt of bad press in situations like this, it is world leaders who need to step up and take responsibility. Reform of transparency rules; tighter controls over tax evasion; and investment in the authorities who receive and act upon suspicious activity reports are a few examples of meaningful actions. With the number of world leaders included or connected to the ICIJ data leaks, its easy to see why progress is not being made.
