Passporting Delays Cost Gibraltar Another US Bank

Tax-news.com

31 January 2000

One of the biggest offshore banks in Gibraltar's finance centre is about to shut up shop. The Republic National Bank of New York, which is the biggest deposit holding bank in Gibraltar with over £11 billion in assets, is the third US owned bank to close its operations in Gibraltar, after Discover Card Bank and Springfield Bank left last year.

One of the main reasons behind the recent decline of Gibraltar's banking sector is the failure to resolve the 'passporting' issue so that Gibraltar-based banks can operate throughout the EU. Despite the decision being taken in July last year to allow the passporting of financial services into the EU from Gibraltar, progress has been slow in putting into effect the necessary administrative arrangements to give Gibraltar banks easy access to EU member states. While some progress has been made on the passporting of banking services, little work has been done to enable similar access to the EU for investment services, which is a key market for Gibraltar's banks.

Most of the blame for the slow progress on passporting lies with the UK authorities who must secure passage of the necessary regulations through the UK parliament, but have instead been more focused on reforming financial supervisory arrangements in Gibraltar in order to keep it off the OECD's impending blacklist.

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