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21 Int'l Fin. L. Rev. 24 (2002)
International Pressure Makes Offshore Lawyers Change Tack

handle is hein.journals/intfinr21 and id is 86 raw text is: International pressure makes offshore lawyers change tack With pressure mounting on offshore jurisdictions to tighten up their tax haven status and secrecy rules, lawyers are looking to adapt their legislative environments to encourage work in sophisticated cross-border transactions. Thomas Williams reports he last few months have been a difficult time for the world's offshore financial centres. The so-called war on terrorism has focussed international attention on tax havens and the dirty money thought to be flowing through them. Pressure to force offshore jurisdictions to reform money laundering legislation and competitive taxation practices, already building before last September's terrorist attacks, has become irresistible. Offshore jurisdictions have been caught between a regulatory rock and a hard place. The internationally-proscribed reforms that undermine their favourable position as loosely-regulated tax havens may notbe the best strategy to keep the business they have cultivated, IFLR February 02 !24 www.iflr.com but losing that business to well-regulated onshore centres like Dublin is hardly desirable either. While 2001 was a good year for the seemingly unstoppable development of the Irish market, there are few immediate signs that things are really going wrong for lawyers in offshore jurisdictions. International bond issues grew in 2001 and the issue of bonds from offshore-domiciled vehicles showed no signs of collapse. But some offshore jurisdictions are tweaking their financial legislation to stay ahead of the game in sophisticated international capital markets structures and offshore lawyers are positioning themselves to offer advice on these new products. Captivating structures Ironically, the terrorism that focussed critical attention on the world's offshore centres also brought them business. The September attacks produced an estimated insurance bill of more than S40 billion and made clear the need for higher insurance premiums and a reliable source of revenue to pay out for such catastrophes. It was to the offshore market that international insurance companies turned for a solution to the new risks that the industry would have to take into account. In November, Bermudan law firm Appleby Spurling & Kempe worked with US firm Sidley Austin Brown & Wood on the creation and flotation of one of several catastrophe reinsurance companies set up in Bermuda. The S1.2 billion formation and Bermuda listing of Endurance Speciality Insurance was led by Appleby Spurling name partner Richard Spurhng and was reportedly sponsored by US insurance corporate Aon and Zurich Financial Services affiliate Capital Z Partners. The new vehicle will take capital from several other investors and provide commercial property and casualty insurance and reinsurance underwriting services. In the same month, the US insurer White Mountains Insurance Group announced that it planned to build a new, Bermuda-based reinsurer with S 1 billion in capital, while Hellman & Friedman said it would buy a S750 million majority stake in Arch Capital Group, a publicly-traded Bermuda-based reinsurer. In late September, Marsh & McClennan said its private equity subsidiary MMC Capital had launched Bermuda-based Axis Speciality at S 1 billion. Bermuda is home to around one-third of the world's captive insurance fiinds and, after London and New York, is the third-largest centre for such vehicles in the world. The market had already increased by 31.6% between 1999 and 2000 according to insurance industry specialist AM Best. John Collis, head of corporate at the Bermuda office ofConyers

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