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#485397 - 02/07/14 04:35 AM The end of Offshore Banking Sector
Marty Offline
“We can kick and scream, ultimately we have to comply.”
- PM Hon. Dean Barrow

That was Prime Minister Dean Barrow’s assessment of the Bills which were passed at the National Assembly on Wednesday February 5th in order for Belize to be compliant with international standards and regulations as it relates to the offshore banking industry.

The amendments to become compliant came in the form of Bills which went through their three readings at the National Assembly and are as follows:
(1) A bill to amend the companies act chapter 250 of the substantive laws of Belize revised edition 2000-2003 to make provisions for the mandatory registration of beneficial owners of registered companies.
(2) A bill to amend the domestic banks and financial institutions act number 11 of 2012 to make provisions for the prohibitions against licensing shell banks, remove reference to currency transaction reporting, enhance information gathering powers of the Central Bank.

(3) A bill for an act to amend the Financial Intelligence Unit act chapter 138 (02) to provide for measures to ensure compliance with international standards on operational independence.

(4) A bill for an act to amend the money laundering and terrorism prevention amendment act number 18 of 2008 to provide for measures to ensure compliance with international standards and obligations in relation to money laundering and terrorist financing.

(5)A bill for an act to provide for measures to ensure compliance with international standards and obligations including the Vienna Convention in relation to Mutual Legal Assistance and international cooperation to provide for mutual service of process provision of evidence offences at sea.

In a rare show of mutual agreement even the opposition were in support of the Bill, not necessarily because they so like the government, rather because they understood the ramifications if Belize did not pass these legislations and amendments. According the Prime Minister, if the country had not taken these measure we ran the risk of being black listed in the international community. It was so important that outside pressure came to bear so much so that as the Prime Minister explained, “If we change a word in a template provided to us we may do so at our peril.”

The government had been putting off the passage of these pieces of legislations but PM Barrow noted that time is running out and that the sun is setting on the offshore banking industry. This is so since an international body, the Financial Action Task Force (FATF), will be meeting on Monday and if the legislative changes were not passed we ran the risk of losing all manner of financial transactions with the economic superpowers.

This is a body established in 1989, which according to their website, has as its objectives “to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.”

For small nations like Belize which have vibrant offshore industries, it really means the end of those since the regulations that are implemented really defeat the purpose of the offshore banking all together since they are intrusive even in areas that were once clad with layers of protection.

The Guardian

#485454 - 02/07/14 12:46 PM Re: The end of Offshore Banking Sector [Re: Marty]
Marty Offline

Belize parliamentarians gave rare bipartisan support to a raft of legislation in the National Assembly this week, as the country tries to avert major financial sanctions already being felt by our sister Caribbean country, Guyana. This follows a call last November by the Caribbean Financial Action Task Force (CFATF) to its members to “consider implementing counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating” from Belize and Guyana, where several Belizeans study law at the University of Guyana.

Gail Teixeira, an elected member of Guyana’s 65-member parliament, and the Chief Whip for the Government in the Parliament and Presidential Advisor on Governance, told Amandala today that Guyana has already been feeling pain for not having yet passed the legislation. Towards the end of 2013, she said, Guyanese in the diaspora who had tried to send money back home via the banks or Western Union, to take care of their living expenses on their return home, found that their bank accounts in the US were being closed because of their Guyanese connection.

Belizean parliamentarians said in the National Assembly Wednesday that the new suite of bills, the second such raft of legislation to satisfy CFATF’s demands on Belize, would mean the end of Belize’s offshore sector.

Belize Opposition Leader Francis Fonseca said that the laws would inevitably lead to the complete undermining of the offshore industry in Belize—which is perhaps what is intended, he said.

“The reality is that the big boys don’t want us at the table,” he said, adding that the required changes must be made to protect Belize’s wider financial sector.

Fonseca said that this is the reality of life in 2014: “We can complain, but we have to comply.”

In speaking of the legislation Wednesday, Prime Minister Dean Barrow, Minister of Finance and Economic Development, said the Financial Action Task Force (FATF) is meeting on Monday, February 10, in Paris; and on the agenda is the subject of the possible blacklisting of Belize and Guyana.

“The passage of the legislation ought to put paid to that, but you can see that we are cutting it rather close. The reason for [this] special meeting today is to meet that deadline,” Barrow said.

Those bills are the Companies (Amendment) Bill, 2014; the Domestic Banks and Financial Institutions (Amendment) Bill, 2014; the Financial Intelligence Unit (Amendment) Bill, 2014; the Money Laundering and Terrorism (Prevention) (Amendment) Bill, 2014; and the Mutual Legal Assistance and International Co-Operation Bill, 2014. They were approved by the House on Wednesday and by the Senate today, Thursday. They should be signed by Governor-General Sir Colville Young by early Friday – after which Belizean officials intend to send a notification to FATF’s Secretariat in France, signaling the completion of the legislative process.

Barrow said that those in Belize’s offshore sector know that the reason the Government has delayed so long in passing the legislation is that they were trying to buy time, but now it is clear that that time is running out.

Offshore practitioners recognize that the sun is setting on that sector and this will deal a serious economic blow on our country, Barrow said.

Noting Opposition resistance against the legislative changes in Guyana, Barrow went on to thank Belize’s Opposition for supporting the bills: “I certainly appreciate, in any case, the sense of realism that the Opposition is displaying and their support of the measures, even though both sides have said it will do perhaps fatal harm to the offshore industry…”

A gridlock between Guyana’s Opposition (made of two parties which hold the majority of 33 out of 65 seats) has meant that they were unable to get their legislative measures passed last November, when the Anti-Money Laundering and Countering the Financing of Terrorism (Amendment) Bill was defeated; but the bill has since been taken back to parliament there, given the huge national implications with which they will have to contend.

Unlike Belize, though, Guyana does not have to worry about an offshore sector. They have, nonetheless, come under major pressure to implement more stringent provisions, enshrined in the Bill, ahead of next week’s France meeting.

“In the context of Guyana, what it will do is that foreign transactions will be put under absolute scrutiny and the delay on some cases can lead to foreign bank accounts being closed,” Guyana’s Chief Whip told Amandala.

Teixeira added that the Government will make another attempt on Monday to get the legislation passed. The Senate Special Select Committee on the bill, which she chairs, is due to meet tomorrow, Friday, and she expressed the hope that this time around, the Opposition members would come completely onboard.

Teixeira also told us that the main bill contains 80% of the amendment, and it includes ancillary amendments in the same bill to 6 other pieces of legislation.

The private sector community and a large group of civil society members of Guyana are calling on the Opposition to let the bill go through on Monday, warning of the dire consequences for Guyana, which exports primary products such as sugar, rice, gold, diamonds, and bauxite. Of note is that Guyana is also the home of the CARICOM Secretariat.

Guyana’s Chief Whip told us that in her country, the level of remittances have been dwindling, as there has been increased scrutiny of persons sending money to the country. She said that due to the additional scrutiny now in place, people sending money will be asked by banks to pay additional fees – that is how ordinary people will be affected.

However, as for business and government foreign transactions, such as the purchase of goods and services, the private sector in Guyana is now screaming that they are now being asked by banks to fill out an inordinate amount of paperwork for overseas purchase of equipment—which has caused setbacks in the productive sector.

If the FTAF does a prima facie review next week and decides to sanction Guyana, the country could face problems with its foreign currency reserves, as well as exports and imports, and foreign reserves could suffer a decline if they are unable to send money to Guyana, Teixeira told us.

One of the items on the agenda for next week’s FATF meeting is “Identifying jurisdictions with strategic deficiencies… and reviewing progress made by jurisdictions” – which include Belize and Guyana.


#485488 - 02/08/14 03:24 AM Re: The end of Offshore Banking Sector [Re: Marty]
elbert Offline
The pirates of the caribbean are being forced to give up their treasure maps.
The Dive Shops Daily Blog

#486495 - 02/21/14 01:58 PM Re: The end of Offshore Banking Sector [Re: Marty]
Marty Offline

Belize avoids G-7 sanctions – but review of money laundering measures pending

National Anti-Money Laundering Committee to advise Minister of Finance

CFATF says passage of 9 pieces of legislation is “first step” – that more needs to be done to address money laundering and the financing of terrorism

When the Financial Action Task Force (FATF), established by the G-7, met in France earlier this month, they decided that Belize should not face financial sanctions, because it had taken action to implement new laws, mostly designed to address compliance with international guidelines to counter money laundering and the financing of terrorism.

While the cautionary note against Belize, issued last November by the regional body – the Caribbean Financial Action Task Force (CFATF), remains in force, Gian C. Gandhi, Director General – Deputy Chairman of the International Financial Services Commission in Belize, told Amandala today that Belize will be subject to a review by the CFATF plenary in May. A country representative would be attending on Belize’s behalf.

Sanctions against our sister Caribbean country, Guyana, which faced a political gridlock which stopped them from passing their version of the anti-money laundering legislation ahead of the France meeting, have also been deferred, Gandhi indicated.

In its latest online post, CFATF notes that Belize has enacted 9 pieces of legislation in response to CFATF’s statement on Belize last year.

“Through the printing of an historic Special Gazette, the Government of Belize demonstrated its commitment to modernize its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) architecture in keeping with international standards to enact nine pieces of key legislation, six laws and three regulations,” CFATF’s post said.

It added that, “Since the time of the issuance of the public statement and particularly in January 2014, Belize brought together technical capacity and political will, to approve different pieces of legislation and regulations, which represent a significant step in improving compliance with AML/CFT Standards.”

The legislative instruments were published in the Gazette on Friday, February 7, immediately after they were signed by Governor-General Sir Colville Young.

The CFATF went on to congratulate Belize on what it called a “first step,” and said it “encourages the jurisdiction to continue strengthening its AML/CFT Regime.”

Belize said in its statement that it “…understands that these accomplishments do not mark the completion of its efforts to enhance implementation of the FATF Standards. Belize will remain actively committed to the continued improvement and implementation of a robust national AML/CFT regime.”

While concerns have been expressed in some quarters about the more onerous reporting obligations that are being implemented, in line with these legislative changes, Gandhi said that there will be no need for the filing of public financial statements by politically exposed persons; however, clients regarded as political exposed persons (see article elsewhere in this edition of Amandala) would be subject to “enhanced due diligence…” from banks and other financial institutions, because they would be required to do more monitoring of such customers.

Belize said in its statement to CFATF that specific measures being implemented include but are not limited to: strengthening customer due diligence, record-keeping, compliance and reporting obligations for financial institutions; enhancing compliance with CFT obligations, particularly freezing and confiscating terrorist assets, expedited implementation of targeted financial sanctions by the UN Security Council, clarifying listing and delisting procedures; establishing the National Anti-Money Laundering Committee as a statutory body to advise the Minister of Finance and coordinate national AML/CFT efforts; and strengthening and clarifying the sanctions regime, including implementation of a comprehensive administrative penalty regime.



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