St Vincent Announces Measures To Conform With FATF Rules

Tax-News.com, New York

17 August 2001

A high level delegation from the government of St. Vincent and the Grenadines, including the Prime Minister and Minister of Finance and Legal Affairs the Hon. Dr Ralph Gonsalves and Attorney General, Mrs Judith Jones Morgan, met with stakeholders of the offshore financial industry to discuss a reform of the sector on Thursday 9th August 2001. The meeting was coordinated by the official body that regulates the offshore industry, the Offshore Finance Authority (OFA). Members of the OFA team included members of the OFA Board of Directors, as well as Acting Offshore Finance Inspector Colin Williams and newly appointed Assistant Offshore Finance Inspector, Louise Mitchell.

The purpose of the meeting was to bring the stakeholders up to speed on the process of reform that the government of St. Vincent and the Grenadines has launched and to issue an invitation to them to be a part of this process.

The Prime Minister addressed the meeting on this process of change. He presented the government's position as one that is committed to getting off and staying off the Financial Action Task Force (FATF) black list of Non-Cooperative Countries and Territories and to doing so in a transparent manner. He indicated that the primary focus of the reform would be that identified by the FATF as the priority, namely the issue of money laundering.

In order to address the issue of money laundering Dr Gonsalves indicated that two bills were currently before Parliament, namely the Financial Intelligence Unit and the Proceeds of Crime and Prevention of Money Laundering Bills. The Prime Minister indicated that the reform process in St. Vincent would take place in an open and transparent manner. He invited all registered agents and other stakeholders and regulators present to submit recommendations to the Select Committee to be established on the two bills addressing the money laundering issue.

Dr Gonsalves affirmed the government's commitment to a reform process that involves all stakeholders, including regulators. He referred to a 'collective effort'. He indicated that his government was a 'nationalist one that is sensitive to external pressures.' The Prime Minister recognised that it is a 'delicate balance' between protecting clients that seek confidentiality and also allowing transparency required by international investigators. He indicated that the purpose of the consultative process that the government is undertaking is to assist them in striking the right balance.

The Prime Minister assured the meeting that the government is acting swiftly to get the reform process going, but indicated that he wanted the reforms to be circumspect and thorough so that the reform process would not have to be repeated soon thereafter to remedy deficiencies.

The second area of reform that the Prime Minister indicated is due diligence, in particular as it relates to the due diligence conducted by financial intermediaries on their clients. He suggested that a Code of Conduct would be introduced to regulate the due diligence procedures of financial intermediaries, in particular registered agents.

Present at the meeting were many local registered agents, members of the financial community, international bankers, as well as international regulators such as Rodney Gallagher, advisor to the British High Commission in Barbados.

Acting Offshore Finance Inspector, Colin Williams, also spoke of the reform that has taken place in the internal structure of the OFA. Changes that have taken place include an increased professionalism of the OFA Board of Directors as well as the OFA staff. The new Board includes economist and fiscal advisor to the government, Chairman C.I. Martin, Errol Allen, Deputy Governor of the Eastern Caribbean Central Bank, and Retired Judge Justice Monica Joseph, along with the statutory appointees, namely the Director General of Finance and Planning Maurice Edwards, and the Acting Offshore Finance Inspector Colin Williams. Lawyer Colin Williams has newly joined the OFA from in private practice. Other new members of the OFA team include Oxford graduate and lawyer Louise Mitchell, Assistant Offshore Finance Inspector and Grenville John, Commissioner of Insurance, also a London trained barrister and solicitor.

The OFA team indicated that while the reform process was underway, the OFA is insisting on stricter compliance to the present laws as they stand prior to any amendments. The OFA has undertaken a compliance review, in particular of trusts and banks.

At the meeting the government clearly indicated that it intends to be a viable and reputable player in the international financial market. It intends to achieve this in its open and comprehensive reform process.

In reiterating the government's intention to develop the offshore section, Prime Minister Gonsalves stressed that with a more credible, efficient and effective Offshore Finance Authority, a clean, legitimate, productive and extensive international finance sector can be built.

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