The offshore financial services sector in Nevis, which is due to undergo a
regulatory overhaul this year, continued to perform well in 2007, with the industry
adding $11 million to the coffers of the Nevis Island Administration in the
first eleven months of the year, Premier of Nevis, Joseph Parry, has announced.
The figure represents a 9% increase compared with the corresponding period
in 2006, according to the government.
Parry brought the matter to light during his 2008 Budget Address presentation
at a sitting of the Nevis Island Assembly Chambers in Charlestown last month.
He noted that the industry was an important component in the administration's
thrust for economic and social development and the sector contributed over 11%
of the government's revenue.
"We also registered 3,191 new entities for the year up to 28th November
representing a 10 percent increase over the corresponding period last year,"
Parry announced.
"This sector now contributes over 11 percent of government's revenue which
demonstrates, beyond any doubt, its importance and the need for progressive
policies to continue the propulsion forward," he added.
Parry announced the figures as Nevis prepares to undergo an evaluation of its
financial regulatory regime by the Caribbean Financial Action Task Force (CFATF)
in 2008, while the twin-island federation of St Kitts and Nevis is due to serve
as the CFATF's deputy chair.
"Both of these developments require that we make the necessary enhancements
and improvements to our administrative, legislative, judicial, law enforcement
and regulatory structures to bring them to levels where we can proudly face
the inevitable international scrutiny and also be in a position to take full
advantage of the positive spin offs that can be derived from the increased international
exposure," he told the Assembly.
The Nevis legislature has recently passed the International Mutual Funds Amendment
Ordinance and paved the way for the registration and administration of international
and mutual funds from Nevis as of January 1, 2008.
Parry said the Administration was confident that the Nevis jurisdiction could
develop the market to establish itself as a preferred domicile for private and
professional mutual funds.
"We are also working assiduously to attract a reputable international offshore
bank to Nevis to expand the banking services offered to the corporate clients
and provide a fillip to the sector," he said.
"We are proposing to amend the Offshore Banking Legislation to make it
more attractive to reputable banks. However, it is not our goal to become a
premier banking jurisdiction. Our interest is to provide more valuable added
services to our service providers and their corporate clients," he added.
The prime minster stated that although Nevis now offered a diverse range of
financial products, which includes mutual funds, insurance and foundations,
the administration's strategy would focus on a more effective promotion of those
products in the international community and also to improve the regulatory infrastructure
to make the jurisdiction more attractive to reputable and a high profile financial
institutions.
"There will be a shift in marketing strategy to focus greater attention
on targeting the major service providers of offshore services rather than present
emphasis of providing the various legislations at conferences and trade shows.
We will find out the needs of the movers and shakers in the industry and take
the appropriate action to attract them to out island," he said.
Parry listed a number of steps which he said would be taken in 2008 to raise
the profile of the Nevis jurisdiction.
He said that the administration, in conjunction with the Legal Department, would
prepare the blue print for the establishment of a Single Regulatory Unit as
of January 1, 2009, which would serve to regulate financial services businesses
operating in Nevis. The Unit would be established as a statutory body to encourage
greater independence and to expand its regulatory coverage to include Credit
Unions, local insurance companies and Money transfer agencies.
The NIA would also work with stakeholders in the industry and the Legal Department
to oversee the passage and implementation of a Service Providers Ordinance and
related Regulations and Code of Practice, Parry explained.
The administration also plans to establish an effective risk based supervision
programme by conduction a risk assessment of all licensees and establishing
risk based supervision schedule for onsite inspection and offsite monitoring
and to develop statements of guidance for licensing processes and establish
timelines for completion of these processes.
In addition, there will be active participation in the Federation's Anti Money
Laundering/Combating the Financing of Terrorism (AML/CFT) Task Force to review
the federation's legal administrative and regulatory structures, identify and
correct deficiencies and weaknesses and implement related initiatives prior
to the commencement of the Mutual Evaluation Assessment Exercise.
The administration has also announced that a new branch of the Society of Trusts
and Estate Practitioners (STEP) would be promoted within the federation to encourage
industry practitioners to pursue related professional accreditation.
Parry said that meetings with attorneys, real estate agents, lawyers, notaries,
accountants and Trust Company Service providers who are classified as Designated
Non-Financial Business and Professions (DNFBPs) will be held, to outline their
specific obligations under the Anti-money laundering and Anti-terrorism laws
in accordance with the FATFs 40 recommendations and 9 special recommendations.
The federation has also be the establishment of an Investment Promotion Agency,
with a key objective to promote the financial services industry.
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