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An Interview With...

Julia Shamini Chase

Pioneering Compliance Leader and CEO of Gold Leaf Consulting Limited

 

Recently, Finance Monthly was delighted to speak with Julia Shamini Chase, the Founder and CEO of Gold Leaf Consulting Limited. Julia Shamini is a highly respected figure in the BVI regulatory law and compliance arena. With an exceptional track record and unwavering dedication to excellence, Julia Shamini has positioned Gold Leaf as the gold standard in the compliance industry. She is a highly sought-after authority in the British Virgin Islands regulatory and compliance regime and beyond. Julia Shamini brings a wealth of expertise and experience to compliance consulting.

 

In this article, we delve deeper into Julia Shamini's insights into the BVI regulatory regime and explore her perspective on anticipated changes and upcoming trends, offering readers a comprehensive understanding of the regulatory landscape in the BVI.

 

 

 

How would you describe the current regulatory environment in the BVI, and how has it evolved over the years?

 

The BVI business company (BVI BC) and the broader BVI financial services industry are widely recognized as essential enablers of global commerce, establishing the BVI as a prominent international financial centre. With the evolution of its financial services landscape, the BVI has progressed from primarily facilitating company incorporations to offering value-added services encompassing corporate, commercial, fund management, and succession planning products. The BVI BC has gained popularity as an asset-holding vehicle and secured listings on international stock exchanges.

 

To support its sophisticated offerings, the BVI has developed a robust regulatory framework to prevent misuse of its products, services, and jurisdiction for illicit activities such as money laundering, terrorist financing, and proliferations financing. Compliance with the FATF recommendations and OECD guidelines is a priority for the BVI, demonstrated through its ongoing good standing ranking and membership in the Caribbean Financial Action Task Force.

 

Building upon its solid foundation, the BVI introduced comprehensive legislation for virtual asset service providers in February 2023, following the establishment of the BVI Fintech Sandbox regime in 2020. The Sandbox regime allows eligible fintech service providers to test their innovative products and services in a quasi-regulated environment.

 

Investors have consistently shown interest in leveraging the BVI’s exceptional financial landscape to facilitate their trade. In summary, investors recognize the BVI as an all-encompassing business environment emphasizing a harmonious blend of innovation, usability, and regulation.

 

Gold Leaf has been an active observer and stakeholder, witnessing and participating in the evolution of the BVI’s regulatory landscape. Our deep-rooted relationship with relevant stakeholders and regulators has enabled us to foster a strong understanding of expectations and priorities. Through my appointment as a member of the BVI FSC’s Fintech Steering Committee, we have actively contributed to shaping the virtual assets regulatory landscape in the BVI. Through these collaborations, we have provided valuable insights and perspectives, ensuring that the BVI’s regulatory framework remains robust, transparent, and responsive to the needs of businesses and investors.

 

 

In September last year, the BVI Financial Services Commission approved the Territory’s first investment business license, which authorizes the holder to operate a cryptocurrency exchange. Can you tell us more about it?

 

The approval of the BVI’s first cryptocurrency exchange license marked a momentous occasion for the jurisdiction and Gold Leaf as the regulatory counsel behind the successful licensing application. We take immense pride in having played a pivotal role in preparing and overseeing the application on behalf of our client, ensuring compliance with the stringent regulatory requirements. Our client was also the inaugural participant in the BVI Fintech Sandbox license. Through strategic planning, we successfully navigated the licensing process. We utilized the Sandbox regime to facilitate our client’s operational familiarity within the BVI’s regulatory landscape, fostering innovation and a secure virtual asset ecosystem.

 

During the Sandbox phase, as regulatory and compliance consultants, we assisted our client in developing and enhancing their policies, controls, and procedures to ensure compliance with BVI regulatory requirements. Once our client was confident operating within the BVI’s regulatory framework, we applied for their full Category 7 license under the BVI Securities and Investments Business Act 2010 (SIBA) specifically for cryptocurrency exchange platforms. We continue to act as regulatory counsel and as the approved compliance officer for our client, through Gold Leaf Corporate Compliance Services Ltd., the licensed corporate compliance service provider arm of Gold Leaf’s business.

 

The enactment of the BVI’s Virtual Assets Service Providers Act, 2022 has expanded the regulatory regime for BVI entities and legal arrangements involved in virtual assets. This legislation complements the existing regulatory framework, supports fintech development, and aligns with international standards for virtual asset regulation. This has not only bolstered investor confidence but has also attracted a new wave of entrepreneurial ventures to the BVI, positioning the jurisdiction as a favorable destination for cryptocurrency-related activities.

 

 

What makes BVI so attractive to institutional investors in the crypto industry?

 

When discussing the attractiveness of the BVI to institutional investors in the crypto industry, it would be remiss of me to not only highlight the jurisdiction’s favorable regulatory environment which I will discuss in more detail, but also its natural beauty. The BVI’s unique combination of regulatory excellence and breathtaking surroundings contributes to its appeal as a preferred destination for institutional investors in the crypto industry.

 

In addition to its stunning beauty, the BVI offers the following key elements that make it attractive to institutional investors in the crypto industry:

 

  1. Regulatory Clarity – which the BVI has established with a clear and well-defined regulatory framework specific to virtual assets, through the passing of the BVI Virtual Assets Service Providers Act, 2022 (VASP Act). The VASP Act addresses the licensing and supervision of persons and entities engaged in virtual assets activities. It establishes a framework for compliance, risk management and reporting obligations which enhance consumer protection and investor confidence in the virtual assets space.

 

  1. Investor Protection – the VASP Act implements robust investor protection measures, such as custody and safekeeping requirements, capital adequacy, testing, auditing, and, robust money laundering, terrorist and proliferation financing, and fraud detection measures, to ensure overall investor protection.

 

  1. Compliance and Reputation – The BVI has, and continues to maintain, a stellar reputation as a compliant and robustly regulated jurisdiction. The VASP Act and the BVI Anti-Money Laundering, Counter-Financing of Terrorism and Proliferation Financing (AML/CFT/PF) legislative framework imposes a risk-based approach on virtual assets providers, to demonstrate that their AML/CFT/PF policies and procedures remain adequate and effective to combat their inherent money laundering, terrorist financing and proliferations financing risk exposures. Such robust compliance measures are attractive to institutional investors who prefer investing in jurisdictions that actively combat financial crime, as it reduces the risk of their investments being involved in illicit activities inadvertently.

 

  1. Stable and Political Environment – The BVI Government has demonstrated its support to help develop a robust virtual assets sector, which reduces uncertainties and risks associated with sudden regulatory changes or sudden policy shifts. It has also established a strong and stable economy, which is reflected in its fiscal policies, sound financial structure and proactive measures to mitigate risk.

 

 

What other trends do you expect to see around regulation and compliance in the British Virgin Islands?

 

The BVI has consistently demonstrated its foresight and tenacity to evolve and adapt as a leading offshore finance centre. At Gold Leaf, my team and I actively engage in monitoring and analyzing emerging trends that shape the regulatory and compliance landscape in the BVI. As a forward-thinking and commercially minded consultancy firm, we anticipate several key areas of focus in the BVI’s future regulatory and compliance landscape:

 

  1. Embracing Regtech Solutions – The BVI has always been a forward-thinking jurisdiction, as evidenced by its embracing of Fintech. This has allowed the jurisdiction and, moreover, the BVI FSC as a regulator, to foster innovation while ensuring robust and transparent regulation. I foresee the BVI adopting more regulatory technology solutions to streamline compliance processes, automate reporting, and improve data analytics capabilities. Regtech adoption will enable more efficient compliance management while reducing costs and increasing accuracy. The BVI AML Legislation already permits the use of electronic or digital verification (ED) provided that such ED satisfies certain prescribed criteria within the legislation.

 

  1. Strengthening of Virtual Assets Regulations – With the introduction of VASP, and as the industry continues to develop and mature, we anticipate further enhancements and refinements to the regulatory framework governing virtual assets. The BVI will likely continue to focus on ensuring compliance with the FATF Recommendations, by focusing on preventing illicit activities, while fostering a secure and transparent virtual assets ecosystem.

 

  1. Continued Commitment to Anti-Money Laundering (AML), Combating Financing of Terrorism (CFT) and Proliferations Financing (PF) – The BVI will continue to maintain its strong stance on AML/CFT/PF and sanctions compliance. The AML/CFT/PF framework has matured into a risk-based framework which ensures that the internal controls being implemented by licensed entities are not only adequate but effective in achieving regulatory compliance. I believe we can expect to see ongoing efforts to enhance these AML/CFT/PF frameworks to strengthen due diligence procedures and ensure the highest standards of financial integrity.

 

As a jurisdiction, we are certainly set to continue our path of furthering regulatory and compliance advancements. These trends reflect the BVI’s commitment to staying at the forefront of regulatory best practices, embracing technology, and maintaining a robust and trusted financial ecosystem.

 

 

How does Gold Leaf ensure that your clients stay ahead of the curve when it comes to complying with new and changing regulations?

 

At Gold Leaf, we take pride in our commitment to keeping our clients ahead of the curve when it comes to complying with new and evolving regulations. Our approach combines proactive measures, industry expertise, and cutting-edge solutions to deliver exceptional compliance services.

 

  1. Continuous Monitoring – Our diverse and expertly skilled team continuously monitors regulatory landscapes, both locally and globally, to stay informed about upcoming changes and emerging trends. We keep a finger on the pulse of regulatory developments, enabling us to anticipate and quickly respond to regulatory shifts, preparing our clients well in advance.

 

  1. Tailored Compliance Solutions – Through our patented SFC-Solutions Focused ComplianceTM (SFC) methodology and tools, we design tailored compliance programs that are sustainable for implementation to help protect our clients’ peace of mind. By tailoring our solutions, we ensure that our clients have a robust framework in place to address new regulations and adapt to changing compliance demands. Also, using our SFC-Solutions Focused ComplianceTM we have created proactive compliance assessment tools that go beyond the minimum requirements. Our assessment tools identify potential gaps and vulnerabilities in our client’s compliance frameworks. By proactively addressing these areas, we help our clients fortify their compliance posture and minimize the risk of non-compliance.

 

  1. Expert guidance and advisory – Our team is comprised of experienced compliance professionals who contribute extensive industry experience and regulatory expertise. Through our wide network, we also work closely with and have access to, leading global consultants who we engage, as necessary, in the delivery of our services. Our goal is to provide timely and informed guidance to our clients, whilst also offering practical strategies on how to navigate regulatory challenges effectively.

 

  1. Training and Education – A fundamental ethos at Gold Leaf is that knowledge is key to maintaining compliance excellence. We offer training tools and solutions, to keep our clients updated on the latest regulations, industry best practices and emerging compliance trends. By investing in continuous learning, our clients are equipped to adapt to new requirements and seize compliance-related opportunities.

 

 

How does your company approach balancing a client’s business goals with their regulatory obligations?

 

Our clients are leaders in their respective markets and industries. We appreciate that they must maintain a keen focus on their business productivity and profits. In balancing their business goals with their regulatory obligations, our approach is underscored by our mission to become our clients’ trusted partners, enabling them to achieve compliance excellence and peace of mind. Our team at Gold Leaf possesses not only extensive knowledge of regulatory frameworks but also a deep understanding of business operations and strategies. This distinctive combination of regulatory expertise and business acumen allows us to effectively guide our clients in navigating the complex landscape of compliance while achieving their business objectives.

 

We demonstrate this actively through:

 

  1. Client-Centric Approach – We prioritize our clients’ unique business goals and objectives. Our team takes the time to understand the specific client, operational nuances, and growth strategies. By aligning our services with their business priorities, we ensure that compliance becomes an enabler rather than a hindrance to their success.

 

  1. Customized Solutions – We recognize that compliance is not a one-size-fits-all approach. Our team of professionals works closely with each client to develop tailored solutions that meet their specific regulatory requirements while aligning with their business goals. We strike a balance by designing compliance frameworks that are practical, efficient, and customized to their industry and operational needs.

 

  1. Proactive Compliance Planning – We adopt a proactive approach to compliance planning. By staying ahead of regulatory developments and trends, we can anticipate potential impacts on our clients’ businesses. This allows us to provide early insights, assess the potential implications, and develop strategies to address regulatory changes efficiently. Through advance planning, we help our clients navigate evolving compliance landscapes with confidence.

 

  1. Streamlined Compliance Processes – Our SFC-Solutions Focused ComplianceTM (SFC) tools, technologies, and streamlined processes are designed to minimize the burden of compliance on our clients’ day-to-day operations. We leverage automation, digital platforms, and innovative solutions to simplify compliance tasks, reduce manual efforts, and improve efficiency. This enables our clients to focus on their core business goals while we handle their compliance needs effectively.

 

  1. Safeguarding Reputation – We understand that our clients’ reputation is a valuable asset. Our services are designed to safeguard their reputation by ensuring compliance excellence. By implementing robust compliance frameworks, conducting thorough assessments, and providing ongoing monitoring and support, we help our clients mitigate compliance risks and maintain their integrity in the marketplace.

 

 

Our approach to balancing a client’s business goals with their regulatory obligations is rooted in our client-centric philosophy, customized solutions, proactive planning, streamlined processes, and a commitment to safeguarding their reputation. In every engagement, we are our clients’ trusted partner, allowing them to focus on their core business while we provide comprehensive compliance support. Trusting us to deliver gold-standard solutions, our clients can achieve compliance excellence, peace of mind, and perpetual business growth.

 

 

 

About Gold Leaf Consulting Ltd

Gold Leaf has established an unparalleled reputation for delivering tailored, practical, and efficient compliance frameworks, making them a trusted partner for organizations navigating the complex regulatory landscape. Under Julia Shamini’s astute leadership, Gold Leaf has achieved an outstanding milestone—an impeccable 100% track record for the approval of licensing applications in the BVI. This remarkable achievement speaks volumes about Gold Leaf’s expertise, meticulous approach, and deep understanding of the regulatory landscape. Clients entrust Gold Leaf with their licensing aspirations, knowing that their applications are in the hands of a proven industry leader.

 

Gold Leaf’s commitment to its clients extends far beyond licensing approval. Organizations seeking to navigate the intricate web of compliance requirements highly value Gold Leaf’s sought-after services. With their comprehensive understanding of evolving regulations and a practical, client-focused approach, Gold Leaf offers tailored compliance solutions that enable businesses to thrive while upholding the highest standards of regulatory adherence.

 

 

Contact:

Gold Leaf Consulting Limited

Units 6 and 7, Road Reef Plaza

Prospect Reef, Tortola

British Virgin Islands

 

T: 1-284-494-9559

E: info@goldleafbvi.com

 

 

Eni and Lukoil have signed a farm-out agreement for the transfer of participating interests in three exploration licenses in Mexico’s shallow waters. According to the agreement, Eni will give Lukoil a 20% stake in the Production Sharing Contracts (PSC) in both Area 10 and Area 14, and will acquire a 40% stake in Lukoil’s PSC for Area 12. The objective of the deal, in light of the close proximity of the blocks, is to diversify the exploration risks, accessing wider opportunities and increasing mutual operational synergies. The new joint ventures will be as follows: Area 10 (Eni 80% operator, Lukoil 20%); Area 12 (Lukoil 60% operator, Eni 40%); Area 14 (Eni 40% operator, Citla 40% and Lukoil 20%). The agreement is subject to the approval by the Mexican authorities.

The three blocks are all located in the prolific Sureste Basin and they were awarded to Eni and Lukoil in 2017 as the outcome of an international competitive bid round called “Ronda 2.1”, issued by the National Hydrocarbon Commission (CNH). The exploration drilling campaign is planned to start as early as mid-2019.

Eni has been present in Mexico since 2006 and established its wholly-owned subsidiary Eni Mexico S. de R.L. de C.V. in 2015. After the approval of the swap agreement by the Mexican authorities, Eni will hold rights in seven exploration and production blocks all offshore: Area 1 (Eni 100%, operator), Area 7 (Eni 45%, op.), Area 10 (Eni 80%, op.), Area 12 (Eni 40%), Area 14 (Eni 40%, op.), Area 24 (Eni 65%, op.) and Area 28 (Eni 75%, op.). In July 2018 CNH approved Eni’s Development Plan for the discoveries of Amoca, Miztón and Tecoalli, located in Area 1, which hold an estimated 2.1 billion barrels of oil equivalent in place (90% oil) in world-class reservoirs.

 

Douglas G. Fathers is the Founder and Managing Director of SCG Fund Services (an Equityhub Group company) and is responsible for the overall day-to-day operations and management of the business. As an accomplished entrepreneur and business leader with a diverse background with over 32 years managing global companies in various industries, his unique perspective has been the stimulus towards his current success. SCG Fund Services launched in 2005 and for past 13 years have specialised in offshore fund formation. Today, SCG is considered one of the foremost consulting firms in the offshore fund industry with a presence in The Bahamas, BVI, and the Cayman Islands. As part of this month’s Professional Excellence feature, we spoke to Douglas about fund management in The Bahamas.

 

What type of funds does SCG Fund Services assist with? Are there fund structures unique to The Bahamas?

SCG Fund Services specialise in providing global clients with professional guidance through all aspects of launching and operating a fund. Our services extend to all stages of the fund formation process — from entity formation and the preparation of full-colour offering documents to advising clients on the selection of service providers to marketing the fund.

SCG maintains a personalized approach to guiding and educating new and emerging fund mangers in structuring both domestic and offshore funds. Our consultants and attorneys have significant fund experience in both the US and offshore.

In today’s challenging environment, The Bahamas offers several attractive structures used by professional managers, family offices, and project finance professionals. Within The Bahamas modern-day Investment Fund Act, there are four classes of funds including the Standard fund, Professional fund (open-end & closed-end), SMART fund, Recognised Foreign Fund. The SMART fund is unique to The Bahamas and provides managers several options to fit their needs.

 

Are certain funds more applicable to particular individuals and their circumstances?

Yes, certain fund structures are more applicable to the needs and circumstances of individual or group establishing the fund. For instance, an investment manager launching a fund with a specific strategy is likely to use a professional fund; whereas a private investment group or family office may prefer a Bahamas SMART fund. Strategies with illiquid investments, such as private equity or real estate investment, would favour a closed-end fund structure.

 

How important is the support function following a licensing?

Most jurisdictions, including The Bahamas, require licensed funds to engage an auditor and an independent fund administrator. These service providers provide investors with transparency and general oversight of the funds management and activities. The fund administrator provides most of the back-office tasks for the manager giving him/her more time to focus on the investments of the fund.

 

What factors would determine which jurisdiction to setup and license the fund?

There are several factors to consider including the reputation of the jurisdiction itself & its securities commission, the investors perception, foreign government’s perception, cost of setup, on-going fees, ease of setting up a bank account, licensing requirements, and regulatory requirements after licencing to name a few.

 

What structure should a manager use when setting up an offshore fund?

There are a number of structures to consider and in most cases, it would be determined depending on the location of the manager, location of the investors, and the type of investments the fund will make. Typically, you have four structures that include the Standalone, Master-Feeder, Side-by-Side, and Segregated Portfolio Company.

Standalone structure is one where only one fund vehicle (entity) is used. A Master-Feeder structure is typically used when there is a US presence and where a single manager is seeking investment from both US and non-US or tax-exempt US investors. The structure will comprise a master fund (an offshore vehicle), which conducts the trading, and at least two feeder funds that invest all of their assets into the master fund. A Side-by-Side, similar to a master-feeder structure, is used where a single manager is seeking investment from both US investors and non-US or US tax exempt investors. There will be two funds, an offshore and domestic US fund, both identically managed. Lastly the Segregated Portfolio Company or “SPC”, also referred to as an Umbrella fund, is a company where separate portfolios have statutory segregation of assets and liabilities. These are popular for operating various classes or portfolios with separate strategies.

 

Address:
Ste 205A-Saffrey Square
Bank Lane & Bay Street
P.O. Box N-9934
Nassau, NP Bahamas
Phone: +1 212 920 6690
Email: sales@scglimited.com
Website: https://scgfundservices.com/

Following the Panama Papers leak of files from last year, earlier this month, the Paradise Papers leak once again threw light on the world elite’s hidden wealth. 3.4 million confidential documents relating to offshore investments were leaked to Suddeutsche Zeitung, the same German newspaper that took hold of the Panama Papers in April, 2016, which then shared them with the International Consortium of Investigative Journalists (ICIJ) and a network of more than 380 journalists. The files reveal that large corporations, heads of state, politicians, celebrities and High-Net-Worth individuals are investing huge amounts of money in offshore tax havens. Surprise, surprise. And whilst about 100 media outlets worldwide are pouring over the findings, that include the Queen’s private estate allegedly being invested in a Cayman Islands fund, as well as offshore dealings by Donald Trump’s cabinet members, advisers and donors, a lot of people have asked the question: “What exactly is the problem considering that tax avoidance is legal?”

Panama Papers vs. Paradise Papers

Of course, as with everything, opinions are divided with many ordinary people finding tax avoidance to be offensive and unfair, while others feel that it is a perfectly fine way to save some of their hard-earned money. However, does the muted response to the Paradise Papers scandal show that we don’t care as much anymore?

Following the leak’s predecessor, the Panama Papers, thousands of people gathered to protest, which immediately resulted in politicians stepping aside and losing their jobs. Iceland’s ex-Prime Minister, Sigmundur Davíð Gunnlaugsson, resigned amid widespread protests and outrage over allegations that his family had sheltered money offshore. In contrast, it seems like this time around, the public anger has been on a much smaller scale. Last year, US President Barack Obama called for international tax reform in the wake of the Panama Papers, whilst admitting that “The problem is that a lot of this stuff is legal, not illegal.” However, whilst some wealthy public figures suffered personally and governments and organizations have put out a handful of fixes in recent years, the system remains perfectly intact.

So, are we all silently waiting for that potential reform, or have we simply come to terms with the fact that tax avoidance is fine and the rich and powerful will continue dodging tax?

The morality of offshore tax havens

It is a fundamental principle of democracy that everyone obeys the law. The law applies to everyone. The law states that we have to pay taxes. Whilst in most cases, putting your money outside of your financial regulations is legal, many argue that dodging taxes is morally wrong. In addition, according to a  letter to world leaders from May 2016, more than 300 economists argue that: “The existence of tax havens does not add to overall global wealth or wellbeing; they serve no useful economic purpose.”

By sheltering trillions of dollars offshore ($10 trillion according to Boston Consulting Group), the world’s top end make their money untaxable, depriving governments of hundreds of billions of dollars of tax revenues each year. Niels Johannesen, an Economics professor at the University of Copenhagen discusses the consequences of this behaviour: “Either a lot of people pay more taxes [to compensate], or there’ll be less public goods - schools, hospitals, and so on.” He also adds: “Given that this offshore wealth is to a large extent owned by the very wealthiest… it is people who should be paying the highest taxes who are evading the most.”

Thus, not only do offshore tax havens not serve any economic purpose, but they’re also immoral and deprive economies of funds that could be used on improving public services. Some politicians are recognising the issue, such as the Leader of UK’s Labour Party Jeremy Corbyn, who promised that if his party wins the next General election, it would clamp down on tax havens and end loopholes. The Paradise Papers have once again highlighted the need for this to happen. Yet, the notion that the majority of those involved are ‘getting away’ with tax avoidance, paired with the seeming apathetic response from the public appear to be rather worrying.

Grandstanding politicians are misinformed, hypocritical and “demonstrate monumental naivety” on the Paradise Papers debate, affirms the boss of one of the world’s largest independent financial services organisations.

The comments from Nigel Green, the Founder and CEO of deVere Group, come as the British leader of the opposition party, Corbyn, and the veteran US Senator and former presidential hopeful, Sanders, amongst others, speak out publicly in the wake of the leak of more than 13.4 million documents, dubbed the Paradise Papers.

Nigel Green explains: “The heightened level of sensationalism is out of control, masking the reality of the situation, and is being fuelled by misinformed, politicians out to score cynical political points.

“Corbyn implies the Queen, rock stars, and multinational firms, amongst others, must apologise for benefitting from legal, tax-efficient schemes.  Meanwhile, Sanders maintains that money in offshore accounts illustrates the movement towards an ‘international oligarchy’.

“This hyperbole is unhelpful, misleading and demonstrates their monumental naivety.

“It’s time to set the record straight.”

He continues: “The murky world that these and other politicians and others are inaccurately describing is not one that I recognise.

“In the vast majority of international financial centres are now transparent and appropriately regulated. They provide a sought-after service for individuals – and not just the uber rich ones– and organisations across the globe.

“Indeed, they are an important, legitimate and beneficial cog in the global economy.”

Mr Green goes on to say: “Internationally-mobile individuals and firms typically find that offshore accounts are a sensible option because of their convenience. They offer centralised, safe, flexible and worldwide access to their funds no matter where they live and no matter to which country the person or firm might relocate in the future.  Also, they provide a greater selection of multi-currency savings and investment options.

“Other, often ignored, benefits also include that they can assist firms from to avoid double taxation on the same income, and that they offer legitimate financial refuge for those in countries where there is economic, social and political turmoil.”

Mr Green adds: “For high-profile politicians to complain - and to take the moral high ground – on this, when it is they who have the powers to change tax laws and regimes, smacks of political opportunism and hypocrisy.

“The notion that the majority of individuals and firms in these allegations are ‘getting away’ with mitigating their taxes liabilities legally is absurd. It is akin to someone ‘getting away’ with driving at 50mph in a 50mph zone.”

“Tax is a legal impost and it is individuals and corporations duty to comply within the laws and organise their financial affairs in order to pay what they are required legally.”

The deVere CEO concludes: “Whilst the ‘Paradise Papers’ do indeed highlight that more needs to be done to increase efficiency and cooperation in some regards and jurisdictions, the current furore is distracting attention and resources away from the serious global issue of tax evasion.”

(Source: deVere Group)

In this issue, we sat down with Sandra Antonovic, Chief Operating Officer at Reflex Marine Ltd, a company that designs, manufactures and markets offshore personnel transfer carriers. Ms Antonovic is responsible for global commercial development and strategic business positioning.

 

You have twenty years of experience working for multinational companies across a range of industries, but you are fairly new to the offshore industry. What made you decide to take a job in this sector?

A combination of factors, from family context to personal interest; but I think challenge was the deciding one. I was hired when the company was in a serious crisis, and the question “Can I turn this thing around and make it work” created a very positive trigger in my mind.

If you are focused on understanding the problem and the context around it – how was the problem created and why; if you are focused on solving the problem and if you find difficulties on the road stimulating rather than discouraging, I don’t think it matters what industry you are in. It is like being a film producer – you take the topic of the film and you run with it, you make the best production you can.

Starting to work in an industry you are not that familiar helps with a few other things – you keep going back to basics and you keep questioning everything, because you are not “settled in” and your mind doesn’t (yet) have that, sometimes dangerous, trait “Oh, I’ve done this a thousand times, I could do it in my sleep; I’ll just wing it.”

Being new makes you do your homework, it makes you look at things from different angles, it makes you come prepared. It also helps you think out of the box, have a fresh pair of eyes, see new opportunities and solutions and be unburdened with “historic context” both within your organization and elsewhere.

People may like it or they may hate it, but one thing is certain – they won’t be indifferent to it; and slowly but surely, the change will start happening.

 

You said you were hired when the company was going through a serious crisis. Interesting timing, some might say.

I have been on the Board of Reflex Marine since early 2014; but apart from a few annual meetings, I wasn’t really involved in the business, nor did I fully understand the huge impact internal context would have on the future of the company.

While there was a significant downturn in the oil and gas industry triggered by the incredible oil price drop, the crisis that hit Reflex Marine was mainly due to internal factors. Having had a fair number of successful years, having been on the market for over 20 years, having been based in the South West of UK, an area not much to do with offshore industry, and having had a team of very young, very local, internationally inexperienced people eventually caused reactive approach to the business and the industry.

Being reactive in any industry and any line of business never really works out; and for a company like Reflex Marine, that prides itself on being innovative when it comes to crew transfer problem solving, product design and engineering, even marketing, being reactive was basically against the very core essence of the company.

 

How do you “fix” reactiveness? Can it be fixed?

Everything can be fixed if you really want to fix it. The first step in solving a problem is recognizing there is a problem. That was the most difficult and challenging part. Being new on the team, and saying, literally on your first day “You have a serious problem”. Even the most open-minded people might see you as a “disruption”.

 

How do you deal with that?

Understanding human behaviour and reactions helps you not take things personally, and stay focused on the job. Understanding that you need a team to succeed motivates you to find a way to work with people who may not like what you do, or may not understand your vision or strategy or even a short-term plan. It’s a fine balance; but ultimately your responsibility is to the company, not individuals. You can easily get trapped in dealing with stubbornness and tantrums, or insecurities of team members. If you are to succeed you mustn’t deviate too much, and staying focused takes practice and experience.

 

How did you deal with insecurities people inevitably have?

The only thing you can do, as a manager, is create a platform where knowledge transfer can occur in an (almost) natural way. The rest is up to every person – they either want to learn, or they don’t. They either want to be the best version of themselves, or they don’t. It is up to each individual to make that determination. I believe people can make you think, and see things from a different angle; but when it comes down to motivation, no one can motivate you except yourself. The same way no one can make you happy but yourself.

The responsibility of a manager is to care for and about people, to create the best possible work environment and to create a platform for learning and growing. A bit like a parent who clothes you and feeds you and schools you, and may set some examples for you, but at the end of the day, you become a person you want to be (or you think you should be). Once people start realizing that they actually have the power to change their lives and / or careers, and the way they feel about work, magic things can happen.

 

You have a corporate finance background, yet at Reflex Marine your focus is on global commercial development and strategic business positioning. Was it difficult to adjust to this role?

No, not really. Having a corporate finance background helped me in many ways; particularly in understanding market shifts, geopolitical context and the impact of currency fluctuations. It was also invaluable in pricing strategy, growth forecasts, interpreting trends and understanding the long-term potential, rather than getting trapped in daily (financial) noise.

 

You mentioned geopolitical context. How do you see the importance of understanding macroeconomic factors in market development and crisis management?

We live in a volatile world, and most industries are quite volatile. The offshore industry particularly so. You have to do your homework, you have to understand what things, other than simple supply and demand, may impact or are impacting the global market. You also need to understand regional and sub-regional particularities.

When you are trying to recover a distressed company, the most important thing is not to rush; but you also need to act quickly. Time is, more often than not, of essence. It sounds like a paradox, but it really isn’t.

You need to be able to stay calm, and not panic. Yes, the cashflow is pretty bad, the sales are recovering slower than you would want them too, people are resisting change and so on and so forth. You have to look at those things as noise, a chatter, and you need to block it out so that you can give yourself time and space to look at the big picture. The more experience you have, the easier it is to switch between looking at the big picture, and dealing with day-to-day issues.

Understanding even the basics of geopolitics, recent history and current affairs helps your ability to detach yourself from daily work life and have an overall view of threats and opportunities, weaknesses and strengths. Understanding even the basics of macroeconomics helps you connect the dots between trends and forecasts, and keeps reminding you that everything moves in cycles. It also reminds you that you always need a plan B, and C and D.

 

With your corporate finance background, it would be fair to say you know more than just basic macroeconomics.

That would be a fair statement. Macroeconomics is like a wide lens camera. If you are working on a recovery of an international company operating in every continent, it helps you with a global perspective. Furthermore, it is invaluable in understanding that everything is connected, and that the global market is very fluid between regions. You can’t just look at one country or one area, without looking at the global outline.

We had a very interesting situation in Reflex Marine – we were trying to recover the company; but at the same time we were trying to further develop existing markets, and also open up new sub-markets with new opportunities. It was a constant juggle of going back to basics; and looking at things from a very sophisticated perspective. I think we all learned a lot in the process. I also think that process should never end. We should keep examining things and comparing views and perspectives; we should keep getting deeper and deeper understanding of the market shifts and what triggers and drives them. Only then will we be able to say we are ready for the next crisis.

 

So you think there will be another crisis?

There is always another crisis, it is just a question of when. Maturing as a manager also means looking at every crisis as an opportunity to learn and change; rather than looking at it as an imposition or a difficulty. The crisis that hit Reflex Marine two years ago was probably the best thing that could have happened to us. It was difficult to see it then, but it is very clear now. It forced us to become a lean, proactive company, a team that keeps learning and a group of people that is striving to be better with each new day. Yes, we still have issues and problems, and nothing is ever perfect; but we keep moving forward and we keep growing. That’s a pretty good result in my book.

 

You mentioned that Reflex Marine became a lean company. Could you please elaborate on that.

The market conditions changed. While that change started long before the oil price drop, it became evident and emphasized during the last oil price crisis. The cost of oil production offshore has always been high so it comes as no surprise that oil operators and the industry’s supply chain generally made a lot of effort to reduce the time of exploration and production. What used to take two years, now takes eight months, and so on. For suppliers that meant only one thing – adapt, and do it fast. You have to reduce your lead time, your transit time, you have to lower the prices and you have to be available 24/7. Flexibility and responsiveness are the key ingredients.

Reflex Marine reduced the number of employees by 30%, but increased productivity and responsiveness by 50-60%. We have a much better understanding of the global markets and we are able to see and comprehend the fine layers of the industry. We moved from a company that operates from 9-5 in one time zone, to a company that operates almost 24/7 in all time zones. It doesn’t mean people don’t sleep; it just means we do things in a very different way than we used to. The focus is on the outside, on the market, on the client, and on our role in helping them solve their problems. The change in focus changed everything for us.

 

Where was the company’s focus before?

It was very internal, and when you do that for a long time, it can backfire in a very bad way. Too much of an internal focus can turn you into a company that debates and dwells, rather than focuses on solving problems.

 

How did the team respond to all these changes and shifts of how the company operates?

Different people reacted in a different way and that is normal. Not everyone can accept and adapt to change and disruption, even if they see that it will bring good things in the long run. About 15% left on their own, all quite senior people.

 

Did you ever find it discouraging, having managers leave?

No, I can’t say that I did. Others in the team may have, but I was very determined that nothing will destabilize our recovery, not even people leaving because they disagree with the new direction of the company.

 

That sounds very detached. Were you then and are you now?

You have to be detached, in a way, if you want to do what is the best for the company, not for (some) individuals. Your responsibility is to the company and the community around it – all its employees, its clients and suppliers. You can’t jeopardize that because of one person. It is not always an easy position to be in, but with years and experience it gets easier.

 

We touched a few times on a new market approach the company developed. Tell us a bit more about that.

The narrative became very important – the context – why did something happen, how did it happen, what caused it and so on. The company used to look at numbers only, revenue, expenses, manufacturing costs, overheads. Having a more corporate finance angle and approach the entire team started to appreciate the need and importance to have narratives accompanying every report, and to have an understanding of the context.

We focused on analysis, on market research, on understanding our weaknesses and on working hard to mitigate the risks they could have created. We became very bold in our thinking; and it helped with the general attitude and team’s confidence.

Our increased, more structured and more layered knowledge on the market conditions and on our own capabilities helped us become more realistic in recognizing and accepting the gap between the market potential and where we are at the moment. Seeing you’ve had 30% growth in revenue versus previous thing may lull you into feeling you made it; until you look at the market share figures that tell you that you are below 10% share of the market and that you still have a long way to go (and to grow). It puts things in perspective and keeps us focused. Compared to where we were two years ago, the dynamic in the company changed a lot, and became more positive, more focused on hard work, and more realistic.

 

You touched on SWOT briefly. What is the role of international agreements, regulations and bodies in understanding SWOT analytics and strategy planning?

International agreements, regulations and regulatory bodies can have quite a significant role in strategy planning and looking at SWOT analysis. One of the most recent examples is when Brazilian regulatory body for offshore operations changed the regulation on what types of carriers can be used to move people back and forth while working offshore. That change stipulates that people have to be seated, and we are one of two companies that manufactures personnel transfer carriers for seated passengers. Needless to say this change had and will have a huge impact on our strategy, from supply chain, manufacturing, post-sale approach, market communications and general focus.

 

Reflex Marine is a global company, doing business globally. How do currency fluctuations affect you?

Reflex Marine is a company that operates globally, but is registered in the UK, so the impact coming from currency fluctuations was very evident after the Brexit vote. We export a lot, thus the impact we’ve had has been a positive one, since Pound Sterling plummeted, and US dollar was fairly stable; but we are closely monitoring the currency market and adjusting our market approach when and if necessary.

 

How does this adjustment happen?

I would call it fine tuning, and it’s mainly adjusted through discounts. If the currency shift works for us, we offer higher discounts; if it doesn’t we are more careful with the discounts. That way the benefit from the currency fluctuations gets trickled down to the end client and it helps everyone.

 

Website: https://www.reflexmarine.com/

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