According to a report in the Caribbean Week online newspaper, Dominica is to follow Antigua and Barbuda's "model" laws in its bid to make improvements to its offshore financial sector. Dominica, too, did not escape the wrath of the OECD in 2000, and is now setting out to enhance the regulation of its finance industry.
In a local radio report, Dominican officials noted that Antigua has model tax laws which the rest of the region should follow. They pointed out that Antigua and Barbuda had managed to stay off the Financial Action Task Force's list of money laundering blackspots, unlike some other Caribbean countries.
Antigua and Barbuda's Prime Minister, Lester Bird, is reported as saying: 'I am delighted that Antigua and Barbuda's laws are being used as models for other regional countries. This is an indication that something is being done right as far as our offshore regulations and the governance of the country is concerned.'
Caribbean Week said that several regional governments have been in contact with finance officials in Antigua and Barbuda seeking guidance and or assistance in the formation of their tax laws.
The changes to Dominica's Offshore Banking Act seek to strengthen the regulation of offshore banks, by requiring the banks to maintain a physical presence in Dominica, providing for the notification to and approval by, the relevant minister of changes in shareholders, directors and senior staff.
The amendments provide for the disclosure of details of current and former names, addresses etc. of directors and shareholders, and for developing a compliance and know-your-client culture, with a view to sustaining the growth of the offshore financial sector.
However, opposition United Workers' Party (UWP) says the amendments are being rushed through parliament with insufficient time for discussion, and that the changes could have serious negative consequences for the offshore banking sector. Julien Prevost, an opposition MP and attorney who is also involved in offshore finance, said that the amendment was being dictated by OECD countries, and had many flaws: "They are really using us to do their dirty work, trying to use us to prevent their citizens from sending money out of their country. They want us to pass legislation that they would not dare to pass in their own countries for fear of being accused of being undemocratic or unconstitutional. They want us to do the same thing here."
Acting Attorney-General Bernard Wiltshire admitted that Dominica was under pressure to comply with international requirements but he disagreed that the bill is being rushed through parliament.
"No, it is not being rushed through parliament at all. Very careful thought has gone into the drafting of the bill. It was drafted on the model of the Antiguan law and we looked at the St Lucian law as well. I think it was adapted to suit our jurisdiction here," he said.
Wiltshire said that while the country was being pressured by the FATF to establish certain standards, rather than discouraging offshore financial services, the bill was necessary to establish a cleaner house to attract more offshore business.
"If we don't want to respond to that pressure, then we wouldn't have an offshore sector, and that's all there is to it," he said.
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