Satisfying money laundering regulations has become a routine task for organisations involved with tax driven offshore financial structures. Most will be fully aware that in addition to complying comprehensively with any relevant requirements from the tax laws of their own territory they need to:

• Keep adequate records of the identity of their clients, or obtain confirmations from reputable introducers that they have done so under their own local money laundering regulations.
• Secure satisfactory explanations showing that a new client's existing funds have come from acceptable sources, and obtain confirmation of this from reliable bankers or other regulated professionals.
• Be alert to any evidence of a client being involved with funds derived from drug dealing, illegal arms trading, terrorist extortion or other "money generating" serious crime such as robbery, blackmail, etc.

Although fulfilling these obligations is now a regular business activity for individuals working in the offshore industry, familiarity with taking standard compliance steps can create risks itself.

New developments in financial crime and illegal activities can be easily overlooked if they fall outside of the usual categories that come to mind with money laundering laws:

• An offshore company established to conduct profitable cross-border trade in genuine machinery parts or medicines may turn out to be for concealing illegal shipments in breach of international trading sanctions rather than just for saving tax.
• An offshore company producing exceptional results from stockmarket transactions may be using insider information so that its profits are tainted rather than just tax protected.
• The finance director of a major trading company who is meant to be acting for all its shareholders when fees or commissions are received into an offshore company which he controls could actually be defrauding those shareholders rather than simply mitigating tax.