One view of offshore regulation expressed to me by a former regulator is that it is like fitting smoke detectors in hell: offshore clients like tax breaks, the absence of transparency, the secrecy and the stability. After all, what else is there for an offshore firm to provide beyond secrecy and sunny weather?

As one client once put it, the point of offshore is to ensure activity is ‘off the balance sheet’ and out of sight. Added to which, by way of confusion, certainly in the popular mind, is the fact that offshore now includes decidedly onshore places, not only like Delaware but the City of London. Offshore ought really to be re-defined as ‘in another place’.

Leaving the above on one side, this article is written on the basis of personal experience in the Channel Islands. Post the Edwards report, the Islands cleaned up their act. Evasion came out, avoidance came in. The evaders went off to do business in Switzerland, Mauritius and Panama, at least pro tem until the world started to catch up with the idea that not paying tax was illegal everywhere.

The benefits of offshore structures remain: no published accounts, no publicly available list of shareholders and beneficial owners and that is the foundation for multi-billion-pound businesses. The quid pro quo imposed on the Crown dependencies in return for these benefits, was to stop taking clearly dirty money and stop selling tax evasion schemes. That means that anybody wanting to provide services in the Crown dependencies with which I am familiar has to have rigid KYC procedures so they know who the clients are; where the money came from; and any politically-exposed persons (PEPs) have to be flagged. Woe betide the provider who does not carry this out. If there was a similar well-enforced regime for lawyers in the City of London, pandemonium would breakout overnight.

Unfortunately, problems remain. The regulators offshore have two sets of standards; the first - the unwritten manifesto - is to exterminate the smaller provider. This is done by aggressive compliance visits, skullduggery, underhand tactics, pressure and weight of numbers.

This has some unfortunate side effects. Additionally, a number of the offshore providers now have private equity capital behind them. This means the pressure on profits goes up, so the ability of somebody who may well have a perfectly legitimate reason for wanting an offshore trust - for example, their ability to find an old-fashioned trustee in the proper sense of the word - is becoming curtailed.

There are legitimate functions for certain offshore structures, not least trusts: legitimate business people who are exposed to the vagaries of irrational or arbitrary regimes or where there is a danger posed by spendthrift family members. They are a long-standing Anglo-Saxon invention, but try finding an old-fashioned trustee for a small client and it is very hard.

There is also an unwholesome and, to my mind, unlawful community of interest and absence of delineation within the regulator executive making the decisions and the enforcement arm. The result? Allegations of partial or improper behaviour of the enforcers will go nowhere because the executive simply will not hear of it.

I have watched legitimate, honest, well-run small trustees, face obliteration simply because of the unwritten manifesto; and I have watched the human toll of it, being bullied by a well-financed regulator. Regulators offshore seem to behave without much regard for the rules of evidence.

On the other side of the equation you have the ‘too big to fail’. I can remember some years ago gift wrapping for both the Regulator and the Attorney General in a US$40m fraud. When I say ‘gift wrapped’, parts of this case had been through an American Court and there had been discovery, so we could prove exactly who did what as well as the transcript of the testimony, a well thought out judgment from a New York Court who said who did what. It was a very obvious fraud, the offshore service provider had a valuable asset and two clients, 50/50 so it decided to give the asset to the favourite client. Once they had done that and had not told the disadvantaged client he was induced to put in some more money to inject liquidity and structure that they had just given to his erstwhile business partner.

Did anything come of it? No, not a tinkle from either the Attorney General or the regulator. So offshore regulation, does it work? In a fashion.