With worldwide increasing measures on CTF (combatting the financing of terrorism) and AML (anti-money laundering) compliance, the offshore banking sector in most jurisdictions was subject to changing regulations.
Following the 9/11 attacks, there have been many calls to increase regulation on international finance, in particular concerning offshore banks, OFCs, crypto currency and clearing houses such as Clearstream, based in Luxembourg, which are possible crossroads[citation needed] for major illegal money flows.
A letter by the District Attorney of New York, Robert M. Morgenthau, published by The New York Times, states that the Cayman Islands has US$1.9 trillion on deposit in 281 banks, including 40 of the world's top 50 banks,[6] although official statistics published by the Cayman Islands Monetary Authority suggest the amounts held on deposit are actually around US$1.5 trillion.
The recent sharing of confidential UBS bank details about 285 clients suspected of willful tax evasion by the United States Internal Revenue Service was ruled a violation of both Swiss law and the country's constitution by a Swiss federal administrative court.
[citation needed] Given the enlargement of the canal to accommodate larger shipping, it is unlikely that Panama would succumb in the foreseeable future to international pressure toward transparency.
[10] These often regurgitated figures have not stood up to scrutiny however,[11] and nor has the black hole theory that capital is hoarded away from the financial and tax systems in OFCs.
Trillions in deposits and securities are held in offshore banks, mostly by international business companies (IBCs) and trusts.
A large portion, £6.3tn, of offshore assets, is owned by only a tiny sliver, 0.001% (around 92,000 super wealthy individuals) of the world's population.
The IMF has said that between $600 billion and $1.5 trillion of illicit money is laundered annually, equal to 2% to 5% of global economic output.
"These offshore centers awash in money are the hub of a colossal, underground network of crime, fraud, and corruption" commented Lucy Komisar quoting these statistics.
[1] In cases such as the 1MDB scandal the HSBC scandal and a host of Ponzi schemes including Bernard L Madoff Investment Securities, it has been demonstrated that a mixture of onshore and offshore individuals conspiring together to either turn a blind eye or actively collaborate in order for large scale fraud and money laundering to succeed.
Large fraud cases invariably involved the major global retail banks and real estate in the major onshore or mid shore financial centres in order for the criminals to launder the proceeds of crime into safer jurisdictions and the global financial system as a whole.
The New York Times, The Wall Street Journal, and The Los Angeles Times revealed that the United States government, specifically the US Treasury Department and the CIA, had a program to access the SWIFT transaction database after the September 11 attacks (see the Terrorist Finance Tracking Program) further diminishing the value of offshore banking for keeping Illicit activity secret.
In the 21st century, regulation of offshore banking has increased exponentially but not evenly, although critics usually focus on the wrong areas.
Since the late 1990s, especially following September 11, 2001, there have been a number of initiatives to increase the transparency of offshore banking, although critics such as the Association for the Taxation of Financial Transactions for the Aid of Citizens (ATTAC) non-governmental organization (NGO) maintain that they have been insufficient.