The end of Offshore Banking Sector - 02/07/14 10:35 AM
- 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.