Re‐Regulating Offshore Finance?

This article explores global efforts to regulate offshore finance in the wake of international concern about the effects of so‐called harmful tax competition, as well as money laundering and terrorist financing (the latter a relatively new category since September 11, 2001). In the mid‐1990s, a number of multilateral organizations, from the Organization for Economic Cooperation and Development (OECD) to the Financial Action Task Force, as well as non‐governmental organizations like Oxfam, attempted to curtail offshore finance and tax haven abuses by ‘naming and shaming’ small jurisdictions into compliance with an emerging set of international financial norms. These efforts left themselves open to charges of hypocrisy, however, because many OECD countries themselves failed – and indeed, still fail – to adhere to the standards required of offshore havens. Tax havens responded by calling for a ‘level playing field’. Nevertheless, this effort at global regulation of offshore finance has had tangible effects. This essay explores those effects and argues that the attention to offshore finance missed an opportunity by going after the jurisdictions that provided services rather than addressing the market for such services. Understanding that missed opportunity requires analytical attention to payments, as opposed to exchanges, in international finance and in the social study of finance.