UK Treasury Praises Overseas Territories For Progress On Financial Regulation

by Amanda Banks, Tax-News.com, London

27 May 2002

The UK Government has praised the progress made by the Caribbean Overseas Territories - the British Virgin Islands, the Cayman Islands, Anguilla, Montserrat and the Turks and Caicos Islands - and Bermuda in implementing the recommendations of a KPMG report on finance sector regulation.

The report was commissioned by the UK and the Overseas Territories in 1999, and was delivered in October 2000. The three main priority areas highlighted in the report were: the adoption of comprehensive anti-money laundering legislation, the establishment of independent regulatory authorities, and enhancement of transparency and information exchange procedures with overseas regulators.

All six of the jurisdictions made a commitment to move in these key areas by September 2001, and then to begin implementing some of the lesser recommendations made by the international consulting firm. According to Ruth Kelly, Economic Secretary to the Treasury, and Baroness Amos, Foreign Office Minister for the Overseas Territories, their progress has been 'impressive'.

In a joint statement released on Thursday of last week, the Treasury and Foreign Office ministers announced that:

'Better financial regulation is important in ensuring that Britain's Overseas Territories maintain their status as important financial centres. We congratulate them on the progress they are continuing to make in implementing the recommendations in the KPMG report to improve standards of financial regulation.'

The Ministers revealed that all of the jurisdictions concerned have enacted comprehensive anti-money laundering legislation, and that independent regulatory authorities are up and running in all territories but Anguilla and the Cayman Islands, which are planning to legislate on the matter in the first half of this year.

The progress report further states that all of the UK's Overseas Territories, with the exception of Anguilla, have legislated to improve information exchange with foreign regulators, but that: 'Anguilla will be including such powers in the legislation to establish the independent regulatory authority'. The FCO and Treasury also praised the new Trust Act recently adpoted in Bermuda.

However, both Ms Kelly and Baroness Amos warned that in addition to legislative measures, the necessary human and financial resources will need to be allocated to the new regulatory bodies in order to ensure that they are able to operate effectively.

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