Grenadian Authorities Close Six More Banks

by Amanda Banks, Tax-news.com, London

28 June 2001

As part of a continuing effort to clean up its offshore sector, it was announced recently that the Grenada government has revoked the licences of six more offshore banks operating in the country. The banks were named as Anglo American Limited, Rahab Trust and Management, Wellington Bank and Trust, Caribbean Merchant Bank, Crown Meridian Bank, and Bern Savings.

The Grenada International Financial Services Authority (GIFSA) recently stated that several banks were being monitored, and although the Finance Minister Anthony Boatswain has not yet commented on the reasons behind the closures, they are widely seen as part of the jurisdiction's continuing drive to crack down on money laundering, tax evasion, and other illegal practices.

The Grenada government has been continually stepping up its due diligence on the offshore sector since a scandal last year involving the First International Bank, and following its collapse, the authorities shut down seventeen locally registered banks which were thought to have been affiliated with First International Bank. Grenada has also made substantial reforms to its banking laws in order to strengthen the governance of the offshore industry.

Measures undertaken have included amendments to the Companies Management and the International Companies Acts, and the establishment of the Grenada Industrial Development Corporation. The GIDC was formed in order to remove the conflict of interest regarding GIFSA, which at present promotes Grenada as a leading offshore financial centre, but also acts as the regulatory authority. Under the new act, the GIDC will have sole responsibility for promoting the offshore sector.

There was a bit of a kerfuffle in the run up to the release of the FATF blacklist, when the country's chief offshore regulator, Terrence Forester reacted to an unnamed source which suggested that Grenada would be included on the updated list. However, fortunately for Grenada, clean up efforts seem to have worked, and the jurisdiction escaped unscathed.

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