Faculty Research Seminar: 'Recursivity of law or repatriation of law? Offshore financial centers as testing labs for onshore finance and accelerators for legal change'

Speaker: Dr May Hen

Keywords: sociological theory of legal change, sociolegal studies, globalization and law, norm making processes of law, recursivity of law, repatriation of law, tax haven, offshore finance, legal transplant

Tax havens have traditionally been difficult to study due to privacy barriers, information firewalls, and legal frameworks designed to obscure beneficial ownership of income and assets. This paper introduces the repatriation of law theory, a framework for understanding how onshore laws are exported to offshore jurisdictions, reconstructed, and tested. Offshore financial centers function as regulatory sandboxes, enabling legal and financial innovations that would be constrained by onshore regulations. Once proven commercially viable, these innovations are repatriated to onshore jurisdictions for broader regulatory or commercial use. Building on recursivity theory (Halliday and Carruthers, 2007), which examines the social cycles of lawmaking, repatriation of law theory identifies a distinct pattern of legal norms: their exportation, transformation, and re-importation. This theory positions offshore financial centers as laboratories for legal change, where intentionally opaque jurisdictions test the viability of new laws. It shifts the perception of offshore from being solely spaces of avoidance to key nodes in global regulatory development. By exploring this mechanism, the paper provides a novel lens to examine the socio-legal and socio-economic influence of offshore jurisdictions. The repatriation of law theory contributes to understanding the global dynamics of lawmaking and the critical role of offshore in shaping onshore governance.