St Vincent Replaces Banking Confidentiality Act

Tax-News.com, London

31 May 2002

The financial services sector in St. Vincent and the Grenadines witnessed a monumental shift in direction yesterday with the repeal of the Confidential Relationships Preservation (International Finance) Act, 1996. This Act, which was once lauded as the strictest confidentiality act in the world has now been repealed in its entirety and replaced by the Exchange of Information Act 2002. The Exchange of Information Act facilitates the sharing of information from regulator to regulator, both locally and internationally.

This legislative development is a reflection of a general policy shift in the offshore financial services sector taken in St. Vincent and the Grenadines away from secrecy and towards accountability and reputability. It is also a move that is designed to directly address the concerns of the FATF regarding the ability of St. Vincent and the Grenadines to cooperate fully in the international exchange of information.

Another significant development in Parliament yesterday was the passing of the International Banks (Amendment) Act 2002 that is designed to strengthen the regulation and supervision of international banks in St. Vincent. Most importantly it incorporates the sharing of responsibility with the Eastern Caribbean Central Bank, based in St. Kitts and Nevis, for the licensing and the ongoing supervision of international banks.

There are other major developments that have taken place in St. Vincent and the Grenadines lately in the fight against international money laundering and terrorist financing. Parliament on May 28, 2002 passed an Act to implement the principles of the 1999 UN Convention on the Suppression of Terrorism. This Act deals in particular with the financing of terrorism.

On May 6, 2002 the Financial Intelligence Unit became fully operational. It is staffed by a Director who is an attorney at law and a former state prosecutor, three police officers, three customers officers, an accountant, an attorney at law and a consultant/technical advisor. The Director reports that she has already received suspicious transaction reports.

The Government of St. Vincent and the Grenadines not only is creating one of the most advanced anti money laundering legislative frameworks but has also embarked on vigorous implementation of this legislation. For example, the National Anti Money Laundering Committee on May 23, 24 hosted the largest anti money laundering training seminar ever in St. Vincent and the Grenadines. There were speakers from the Caribbean Anti Money Laundering Programme in Trinidad as well as from other institutions in the region. Over 100 persons attended representing over 50 financial institutions or relevant businesses in St. Vincent and the Grenadines.

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