USA and its Changing Role in the Regulation of the Offshore Economy

The fiercest battle over the regulation of the ‘offshore’ economy to date took place between and 1998-2002, ending in a spectacularly embarrassing defeat for the OECD regulators when USA, initially a key driver of the initiative under Clinton, lifted its support under the Bush administration. Academic literature touts this success of what were mostly geopolitically insignificant island states as proof of the ‘primacy of sovereignty’ in international relations and the ‘power of the weak’, specifically their ability to ‘rhetorically entrap’ more powerful state and institutional actors by appealing and holding them to their own declared norms and ideas, such as the pervasive discourse of ‘competitiveness’. Close examination of subsequent cases of USA’s policies and conduct towards the ‘offshore’ economy between 1998-2014 puts the causal power of these concepts in serious doubt however. The post-9/11 clampdowns on practices conducive to the financing of terrorism, USA’s destructive campaign against Antigua’s online gambling industry, and the more recent passing of FATCA are just some of the examples strongly suggesting that the true causes lie with the differential alignments of interests between certain segments of the ‘offshore’ economy, individual US administrations, and their financial backers in Washington DC and elsewhere. ‘Competitiveness’, ‘sovereignty’, and other influential ideological constructs certainly play a role, but merely as tools to be used or temporarily discarded as and when it fits the prevailing interests.