Offshore Centres Urged To Adopt PKI Technology Or Face Losing Business

by Robert Lee, Tax-news.com, London

20 June 2001

At a conference in London last week entitled 'Taking E-Business Offshore,' David Sherlock from Manx-based legal firm Cains warned that many offshore financial centres are a long way behind in terms of e-business and must begin using digital signatures if they want to keep hold of their business.

He claimed: 'Unless the offshore world has the ability to go online, offshore centres will lose money to metropolitan jurisdictions. PKI infrastructures are needed offshore because any jurisdiction that can not issue electronic passports will be severely debilitated.' He urged: 'If you have any influence over your governments, please try to persuade them.'

Mr Sherlock also warned that if multilateral agencies such as the OECD and the FATF do not recognise the sound security of electronic documents and e-passports (particularly when compared to paper), many firms will be reluctant to make the conversion.

Currently companies are obliged to follow the paper-based Know Your Customer (KYC) rules which guard against money laundering activities. But these involve a lengthy process due to requirements involving original passport and other personal documentation as evidence which can be subject to falsification, whereas PKI technology which is used for verifying digital data is swift, much less burdensome and much more secure.

He argued: 'If you can show the FATF that paper identification is not the important factor, we can overcome the problems that may be holding offshore centres back. It is the FATF that needs to accept electronic data as more secure than paper. FATF acceptance of e-KYC is critical.'

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