Isle of Man directors: don’t blame us – we don’t know what our companies are doing

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I love this from the BBC File on Four web site:

A BBC investigation has uncovered questions over whether Iranian ships have been registered in the Isle of Man to evade international sanctions.

That, of course, is typical secrecy jurisdiction abuse*. But so too is the situation where a secrecy jurisdiction director has absolutely no idea about what the company they supposedly manage is doing. This is beautifully noted on the same web site

Captain Nigel Malpass, a marine consultant based in the island's capital Douglas, is one of two directors named for these companies, the other is Ahmad Sarkandi, an Iranian who is also a leading executive in the state shipping line.

There is no suggestion that Captain Malpass had any knowledge of the activities of the ships owned by the companies of which he was the director.

Well of course he wouldn’t. The nominee directors of secrecy jurisdiction companies never know what the companies they supposedly direct are doing. That’s fundamental to the blind eye that these places turn to the activities of the companies registered in their domains.

The same blind eye is equally graphically attested to be Tony Brown, Chief Minster of the Isle of Man. The BBC report:

Brown maintained that an investigation had revealed no wrongdoing and he denied that the island had aided any breach of the sanctions.

"We have to be realistic we can't do any more, we shouldn't be expected to do any more."

He added: "Why should we shut down legitimate businesses.... we shouldn't be expected to take action the rest of the world won't."

Which was not quite the view taken by the British and Israelis:

In a statement to the BBC, the Foreign and Commonwealth Office said in regards to sanctions: "The issue is a matter for the Isle of Man government."

Who as we note deny responsibility, whilst:

[Brown’s] attitude has been sharply criticised by Israeli official, Ran Gidor, a political adviser at its embassy in London.

"Even assuming the resident in the Isle of Man had no clear knowledge of the contents of the ship the very fact he chose to get involved with shipping traffic going in and out of Iran would expose him or risk.

"We think the word should spread IRISL and its straw companies and subsidiaries are untouchables. You may think you know what you are getting involved in but you don't really"

The reality is obvious: of course the Isle of Man should regulate this trade. But it doesn’t, by choice. That choice is inherent in its corrosive business people that ensures the regulation it complies with is that which applies in the Isle of Man alone.

This company is presumably non resident in the Isle of Man. In that case all it has to do to be compliant according to the Isle of Man is to pay its annual fees and to submit an annual return form but no accounts or tax returns to anyone. This they claim is compliant with international regulations.

The shabby hollowness of their argument is apparent.

Their willingness to turn a blind eye is apparent.

The cost to the world is apparent.

And still the abuse goes on.

So the question has to be asked – when will the UK shut these sordid places down?

* Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.