The simple fact that a provider operates outside the jurisdiction of the UK does not mean that they avoid the MSC legislation.
The issue for agencies with offshore, ignoring other requirements under anti money laundering and being seen as colluding in tax avoidance, is that it is unlikely that HMRC in the event of assessing a provider as failing under MSC legislation, would be in a position to recover any of the debt from the provider.
This simple fact means that the risk to an agency of a debt transfer notice is heightened and the liability is likely to be greater. This could be made even worse if the contractor is a non UK worker and has returned home, making the chances of recovery under the rules, even more unlikely. In these cases agencies could face significant liabilities.