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St Vincent Withdraws Banking Licence

by Mike Godfrey, Tax-News.com, New York

20 August 2001

Ralph E Gonsalves, Prime Minister and Finance Minister of St Vincent and the Grenadines, has withdrawn the licence of Maxi Bank Inc.

Maxi Bank Inc held a Class I banking licence under the International Bank Act 1996. Class I banks are institutions who may do business with non-residents provided their paid-in capital is higher than US$ 500,000. Class I banks are required to maintain a security deposit of US$ 100,000 in the manner prescribed by the Government.

Dr Ralph Gonsalves led his Unity Labour Party (ULP) to a landslide election victory in March 2001, capturing 12 of the 15 contested parliamentary seats. The incumbent New Democrat Party (NDP) won only three seats. Dr. Gonsalves, a lawyer, became the new prime minister.

One of the new government's priority tasks is to secure St Vincent's removal from the FATF (Financial Action Task Force) blacklist. Just yesterday Tax-News.com reported on a speech by Dr Gonsalves in which he described new legislation aimed at stamping out money laundering activity.

Dr Gonsalves made his announcement in the following terms:

'As Minister of Finance of Saint Vincent and the Grenadines, I have authorised the revocation of the Class I International Bank licence of Maxi Bank Inc., which was originally issued in 1999.

'This revocation is as a result of Maxi Bank's failure to comply with the conditions of its licence.

'I have always made it clear that it is the desire of this administration to build a clean, legitimate, productive and extensive offshore sector. Saint Vincent and the Grenadines is a nation of laws; these laws apply equally to national and those non-nationals who are either resident or come under our jurisdiction.

'We welcome persons to utilise the various offshore products that we offer, whether, for example in the area of international banks, international trusts, mutual funds, international business companies or international insurance companies. However, the laws, rules and regulations must be obeyed.

'Before the Unity Labour Party (ULP) was elected to office nearly five months ago, I gave the assurance that we were committed to the growth and success of the offshore sector. I indicated that the Offshore Finance Authority would be revamped, to make it more credible, efficient and effective. This we continue to do everyday.

'This is the third international bank that has had its licence revoked under this administration. Those persons conducting lawful, legitimate business have nothing to fear from the review process that is now being conducted. In the long run, we will all benefit from having an internationally recognised jurisdiction of the highest quality.'

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