At a press conference in Kingstown, St Vincent on Thursday, Finance Minister Arnhim Eustace said that the Offshore Finance Authority had written to six banks revoking their licences under the International Banks Act 1996.
Eustace said that some of the 15 banks registered in the jurisdiction had failed to submit quarterly financial statements, present audited accounts, or comply with other supervisory requirements. He said that unsuccessful efforts had been made to persuade the banks to comply, and that additional information recently received from international sources had caused him to take action. The banks concerned were not named.
The revocations came a matter of days after the US Treasury Department issued advisories on July 8th against all 15 of the jurisdictions listed by the Financial Action Task Force (OECD) as having insufficient defences against money laundering; St Vincent and the Grenadines is one of the 15. The jurisdiction was also included in the list of 35 countries said by the OECD to have 'harmful' tax policies. But it didn't make the most exclusive list, of six countries said by the Financial Stability Forum to be a danger to world financial stability.
The Finance Minister used the press conference to outline other steps the jurisdiction was taking to improve its regulatory regime in response to international pressure. Consultants had been hired to identify needful changes, and new legislation would be introduced into parliament as early as next week.
It was likely that there would be changes to the Confidentiality Act. While the act currently allows for disclosure of information to authorities in cases where someone has been charged in a court of law, it does not permit "fishing expeditions where somebody just asks for information on a client in the offshore sector" Eustace explained.
The Finance Minister said that threats of sanctions could have adverse effects on the jurisdiction: 'What is really important is ensuring that we restore some level of confidence in the offshore sector so that investors, wherever they are, recognize that we are prepared to take action in accordance with the law'.
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