Grenada Amends Offshore Banking And Companies Laws

by Amanda Banks, Tax-News.com, London

25 June 2001

The Grenada government has made amendments to its offshore banking laws in an effort to to strengthen the governance of the local offshore industry before the OECD releases an update of its 'harmful' tax haven blacklist within the next few weeks.

Earlier this month, Finance Minister Anthony Boatswain announced amendments to the Offshore Banking Act, the Companies Management Act, the Grenada International Financial Services Authority (GIFSA) Act, and the International Companies Act. He said that the aim of the reforms was to persuade the rest of the world that Grenada is making serious attempts to clean up its offshore sector.

In his speech, Mr Boatswain explained that the amendment to the Companies Management Act has changed the provision relating to the Certificate of Compliance in that it will no long apply just to the operations of the licensee but instead to the operations of every company under the licensee's management.

Mr Boatswain also expounded on the GIFSA Act. Currently GIFSA promotes Grenada as a leading international financial services centre but he pointed out that this has the potential to lead to a conflict of interest since the authority also operates as a regulatory body. Under the new Act, the Grenada Industrial Development Corporation (GIDC) will be charged with the responsibility of promoting the offshore sector, leaving GIFSA to concentrate on its regulatory activities.

With regard to the International Companies (Amendment) Act 2001, any person with an interest in offshore banking, international trust business, international insurance business or international betting must inform GIFSA of all shares issued. This will allow the government to maintain records of all bearer shares issued after the Act is enforced. In addition, only registered agents, whose activities GIFSA will be monitoring, will be able to incorporate offshore companies.

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