The notion of the “offshore” suggests a realm out of reach of the law of the land, existing just off the coast of the regions supervised by regulators and taxmen, but has wildly expanded with the perpetuation of the legal fictions of the offshore. Rather than exist only as a region beyond the shoreline or coast, and lie of the known map, the “offshore” is what is obscured to legal overview–and lies outside of national legal bounds. Arising as a convention to designate “offshore spaces” that lay outside of the recognized sovereign tax codes. But “offshore” regions need not properly be removed far from the mainland, or even from it at all–and are found on most any region or continent, save Antarctica.
For the expansion of the offshore is a not so odd consequence of globalism, and the increasing fluidity of finance to travel smoothly across territorial bounds–an ability to sequester funds just out of site, nestled in offshore accounts that are not subject to state scrutiny or traceable by paper trails. If the notion of the offshore is a relic of the post-colonial era–and began as a legal clarification of the category of offshore jurisdictions or overseas dependencies, removed from the European colonial powers as they enjoyed a liminal connection to formerly colonizing states–the offshore in today’s markets are a type of insider knowledge, not open to many, but accessible to the initiated, and brokered by agencies–as Mossack Fonseca–who use the loopholes of international law and the artifacts of the ius mari to enable clients to store or sequester vast sums of money from national oversight–and ensure that financial transactions are not mapped. The offshore exists as a need for frictionless cash flows in a global economy where cash flows are more difficult to embody–and far less face-to-face, and borderless friction the order of the day; as increased integration of markets has opened a parallel loophole of the syphoning off and sequestering of money of corporations–and not only of the super-rich long tolerated for placing funds into accounts described euphoniously as overseas.
As sites for investment and financial regulation, the offshore lies outside legal view, but not off of the map. The entity of the offshore suggest the grey area of the law of the sea, outside sovereign authority or legal bounds, but as something like an apotheosis of the freedom of seas and an ill of globalization. The remove of the “offshore”suggests a growth of what might be called “ocean-like spaces,” open for untamable transactions–or offering tax relief by different measures–that are particularly corrosive to the governments on land, sovereign states from whom revenues regularly vanish: the offshore is afflicted by the very absence of familiar legal categories and of formal tax obligations to which most financial exchanges are normally subject, and, as the newly uncovered Mossack Fonseca records reveal, has its own, hidden geography of preferable locations through which money might be shuffled through shell corporations that are nominally located at offshore sites.
If the growth of oceanic space as a site absent from state authority, juridically neutral, and beyond sovereign reach, outside the apparatus of government, the growth of the “offshore” in recent years as a construct or luxury for the super-rich offered a site for the unmonitored financial transactions, not only a place of trade or ocean routes, but a site for storing monies that could accumulate unseen–even if, as in the case of Switzerland, the “offshore” might exist on land. But the offshore gained new prominence and currency in the frictionless economy of globalization, tolerated as allowing monies to be stored and sequestered tax free, in a region that no one country can possess, but exits for all as a lying outside national control. If many sites of the “offshore” were independent crown dependencies of the colonial age, the continued effervescence of offshore sites increasingly exist for the globalized economy: they are sites where money can be less clearly mapped or embodied, but lies outside of the maps of international capital flows.
The “offshore” most familiarly beckons as an idyllic as a place of respite and luxury, free from the imposition of taxes or the need to surrender money to a government. Removed from the sort of sovereign laws that demand the reporting income, the offshore has become a refuge for the super-rich, and for international corporations who want to disguise profits overseas. But its expansion is increasingly a major security threat for global finances, if not a symptom of the illnesses of economic imbalance that increasingly afflict the globalized world. If Zygmut Bauman aptly described the erosion of individual security and collective or individual commitments as a state of liquid modernity, and the offshore partakes of a similar liquidity: money departs from land governments to seek refuge in accounts not open to public view: the offshore is a microcosm of the erosion of state authority, as funds flow offshore as the place of least resistance, secreted outside the public eye. By locating funds “offshore,” removed from terrestrial land and tax audits, the subtraction of funds from the common good seems sanctioned, and has lead to a huge reduction on spending on infrastructure and social services in developing countries, where they are most needed.
The remove the “offshore” promises from sovereign laws, as if lying international waters just out of reach of economic boundary zones, evokes open spaces of leisure, dominated by yachts or pleasure cruises, as if exits from the pressures of the day-to-day work–yet its expansion is tied to the expansion of globalized markets and friction-free revenues able to traverse borders, and to enable ever-growing income inequalities in a globalized world. As countries such as the British Virgin Islands openly rebuff calls from England’s Prime Minister to reveal the ownership of offshore firms located in overseas territories and crown dependencies, begging time to “assess its impact on the BVI economy” while neglecting its impact on global finance and income inequality. How, one might ask, might the new offshore make the most sense to map?
The increasingly unavoidable place that the “offshore” has come to occupy in global networks has made problems of achieving transparency given the levels of legal anonymity offered in the “offshore.” Such somewhat hidden destinations, as the nation of Nive in the South Pacific, an outcrop atoll with a population below 2,000, was the site where Mossack Fonseca & Co. signed a twenty year “lease” in the mid-1990’s to incorporate offshore entities where they could be officially registered either in Cyrillic or Chinese, for example, bankrolling 80% of the government’s annual budget in exchange–until sufficient numbers of banks blocked money transfers to Nive, leading the government to rescind the offer of exclusivity, forcing it to relocate to Samoa, as it had relocated offices of incorporation from Panama to Anguilla and the British Virgin Islands, in a version of island-hopping that epitomizes the frictionless boundaries of the Offshore. The granting of such anonymous accounts goes hand-in-hand by the new identities the corporations are allowed to gain as they travel into smaller “offshore” dependencies, less reliant on tax reserves, which suggest new landscapes for investment and promise financial anonymity–with far less concern for the public good, which itself drops off the map.
British Virgin Islands