What com­pet­i­tive­ness?

E DII TO RII A L

Financial Mirror (Cyprus) - - FRONT PAGE -

The lat­est episode in the com­edy of er­rors called the ‘Ser­vices Sec­tor’ saw the “rev­e­la­tion” of thou­sands of Cyprus-in­ter­est com­pa­nies and ac­counts held or con­trolled by Panama-based en­ti­ties, one of which is Mos­sack-Fon­seca, a lead­ing in­ter­na­tional law firm in the cen­tral Amer­i­can coun­try that reg­is­ters and man­ages hold­ing com­pa­nies.

The whole fuss seems to have been blown out of pro­por­tion. We all know that Panama, as well as some other Caribbean ju­ris­dic­tions and out­ly­ing U.K. is­lands are noth­ing more than havens for tax dodgers, crim­i­nals, money laun­der­ers, even wealthy busi­ness­peo­ple who want to evade a hefty di­vorce set­tle­ment and have thus parked their as­sets be­hind walls of trust com­pa­nies.

Cypriot lawyers, too, have done a lot of busi­ness with Mos­sak-Fon­seca over the past four decades, ever since we es­tab­lished our own “off­shore” sec­tor, later le­git­imised and re-named Ser­vices Sec­tor, with tens of thou­sands of trus­tee, nom­i­nee and hold­ing com­pa­nies reg­is­tered and man­aged by sim­i­lar law and ac­coun­tancy firms in Panama and other havens.

Cypriot politi­cians have now donned their ‘holier than thou’ cape and are de­mand­ing that “light be shed” on this scandal, for­get­ting that they went quiet when the Milo­se­vic Millions were chan­nelled in and out of the is­land and, more re­cently, the lack of proper over­sight saw millions of de­pos­i­tors duped and the col­lapse of a ma­jor bank, Laiki. Is it a co­in­ci­dence that shut­ting down the is­land’s sec­ond big­gest lender also suited the in­ter­est of some peo­ple in Cyprus?

Soon af­ter the Panama Pa­pers were leaked, Cypriot of­fi­cials were quick to de­clare that any­thing sus­pi­cious would be in­ves­ti­gated thor­oughly, not re­al­is­ing that what­ever we say, Cyprus will not be able to shed the rep­u­ta­tion of be­ing a cen­tre for crooks who can thrive and get away with it, un­der the cover of politi­cians.

Sim­ply say­ing that “we are go­ing by the book” is not enough, nowa­days. Peo­ple need to see that jus­tice has been served and that crooks who have laun­dered millions through the is­land’s banks, or have hi­jacked smaller sums from forex in­vestors, will pay for their crimes, by serv­ing a sen­tence and pay­ing back what they have stolen.

Apart from the well known bunch of cre­ative ac­coun­tants and lofty lawyers, the sec­tor has be­come over­pop­u­lated with bor­ing pen push­ers who do noth­ing but data en­try on be­half of their clients.

Dur­ing the past three years of the eco­nomic cri­sis, only a few wealthy com­pa­nies have man­aged to sur­vive and thrive, while thou­sands of SMEs have suf­fered and many have closed down, due to the lack of proper ad­vice from their ac­coun­tants, lawyers, ‘con­sul­tants’ or in­dus­try groups.

Just as the ship­ping com­mu­nity sent out a loud and clear mes­sage at a con­fer­ence this week that the sec­tor needs to re­form, but also to evolve, so, too, should the rest of the ser­vices sec­tor, as we are los­ing busi­ness to ri­val ju­ris­dic­tions sim­ply be­cause we can­not de­liver on the ‘value added’ side of the equa­tion.

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