CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. KPMG Report On Britain's Dependent Territories Is Published

KPMG Report On Britain's Dependent Territories Is Published

Jason Gorringe, Tax-News.com, London

30 October 2000


The long-awaited report commissioned by the British Government on its Overseas Territories has finally been published, after a series of delays lasting several months which were widely interpreted to reflect differences of opinion between the territories and the UK Government over the content of the report.

The report, which followed the similar Edwards Report on Jersey, Guernsey and the Isle of Man, covers Anguilla, Bermuda, the British Virgin Islands, Cayman, Montserrat, and Turks and Caicos.

The report is in fact six separate reports, each containing the overall Terms of Reference and Guidance Notes setting out the standards and practices against which each of the jurisdictions was to be assessed. The process leading to the reports began with the publication of a White Paper 'Partnership for Progress' in March 1999 and KPMG were appointed in December 1999 after a lengthy beauty contest. Their review of the Overseas Territories has cost £466,000.

The reports cover practices and legislation in the banking, insurance and securities sectors, corporate forms, trusts, regulatory authorities, and arrangements for co-operating with overseas and law enforcement authorities over serious crime including of course money laundering.

It is not a little ironic that the reports should be published at the end of a week in which the UK was revealed as a major laundry point in the Abacha affair, with much of the looted £2.75bn passing through London on its way to Switzerland, Jersey and other offshore resting places.

The jurisdictions are given until 15th January 2001 to respond to the reports' recommendations, and must have implemented key changes by 30th September 2001.

Here is the full text of a press release issued by the British Government:

The UK and the Caribbean Overseas Territories (comprises Anguilla, British Virgin Islands, Cayman, Montserrat, Turks and Caicos) and Bermuda commissioned an independent review of financial regulation in those territories. This independent review, carried out by KPMG to assess the extent to which the Overseas Territories comply with international standards and good practice (as defined in the Guidance Notes which are published at the end of each report) in the way they regulate their international financial sectors, is published today.

The review analysed the position of each Overseas Territory individually in terms of the extent and range of financial business conducted and the strength and effectiveness of their regulatory regimes. The KPMG report is exception-based and largely concentrates on those areas of financial regulation where action is considered necessary to comply fully with international standards.

Welcoming the publication of the review, Melanie Johnson, the Economic Secretary to the Treasury said:

'The review provides a rigorous and comprehensive evaluation of how far the Overseas Territories already match international standards and good practice, and makes recommendations for action to improve and strengthen financial services regulation in the Overseas Territories.

'I look forward to seeing their plans for implementation linked to a specific timetable which each Overseas Territory has committed to publish by 15 January 2001.

'It is evident that some Overseas Territories have more to do than others before they can deliver fully what is necessary. It is equally clear that not everything can be done immediately. It has been mutually agreed that the Overseas Territories, where applicable, will give priority to three particular recommendations made in the KPMG report. The three priorities for action are legislation for the establishment of independent regulatory authorities; any necessary enhancements to their laws and systems to combat money laundering; and introducing legal powers that would allow regulatory authorities to obtain key information, and share this with overseas regulators in order to assist their investigations. We will be working with each Overseas Territory to put in place suitable measures; and we expect to see the necessary steps substantively in place by 30 September 2001. Prompt and firm action in this regard will demonstrate to the global financial community the strength of the Overseas Territories' commitment to international standards.'

Baroness Scotland, Parliamentary Under Secretary of State for Foreign and Commonwealth Affairs with responsibility for the Overseas Territories, added her appreciation for the efforts made by all concerned with the delivery and publication of the review:

'The Overseas Territories White Paper - 'Partnership and Prosperity' - noted that the Overseas Territories' success in attracting financial services has been built upon, amongst other things, their reputation for sound administration, effective legal systems, and political stability. In an increasingly competitive global economy, maintaining a reputation for seeking to attract only clean and well-regulated business is vital.

'I welcome the Overseas Territories' full participation in the review exercise. It has been a complex process, but one which we believe will deliver real benefits to the Overseas Territories' financial sectors. The review has underlined the Overseas Territories' commitment to adhering to international standards of financial regulation, and their willingness to co-operate internationally to help ensure a sound international financial system.'

In response to the publication of the KPMG report, Hon Victor Banks, Minister of Finance in Anguilla, said:

'The Government of Anguilla welcomes the KPMG Report and recognises the hard work that has gone into its completion. The Report highlights the extent to which Anguilla already meets international standards and practices and serves as an excellent springboard for the continuing solid development of Anguilla's financial services sector. The comments in the Report on the sound regulatory aspects of Anguilla's electronic Companies Registry, ACORN, are particularly welcome. The Report should also assist the Government of Anguilla in dealing with a number of international initiatives currently underway.'

The Government of Bermuda issued the following statement:

The Government of Bermuda welcomes the report on Bermuda's regulatory system. Speaking on behalf of the Government, the Minister of Finance the Hon. C. Eugene Cox said that Bermuda is pleased that in the vast majority of areas, the report confirms that Bermuda's regulation of financial services conforms to international standards and good practice.

He noted:

'We are particularly pleased that in areas such as company formation the report recognizes that Bermuda substantially exceeds minimum requirements. We also recognize, as the report does, that some enhancements are always possible. Bermuda remains firmly wedded to meeting and maintaining international standards. As such we generally support and welcome the recommendations for improvement of certain of the present provisions that have been made by KPMG.'

The Chief Minister of the British Virgin Islands, Hon Ralph O'Neal said:

'The Government of the British Virgin Islands welcomes this comprehensive report, which we view most positively. KPMG must be commended on producing such a thorough and useful review. We also commend the approach taken by the British Government in producing the report, which offers an ideal example of how Britain and her Overseas Territories can work together constructively to resolve issues affecting us all.

'The report has a double value to the BVI in highlighting the strengths of our existing regulatory regime while helping us prioritise the weaknesses that still exist. Implementing the recommendations is integral to the BVI's commitment to being in the top echelon of offshore financial service centres. I am tabling it today before the BVI legislature and will circulate it widely within the BVI for public comment. We look forward to continuing to work closely with the British Government as we take the report forward.'

The Government of the Cayman Islands said:

'We welcome the independent report of KPMG, which confirms the commitment of the Cayman Islands to operating a well-regulated financial centre which meets international standards. The report identifies a number of areas that we will be addressing to ensure that Cayman's regulatory framework is further strengthened. The Cayman Islands will continue to play its part in ensuring that its international financial sector is able to meet new international standards as they evolve.'

The Government of Montserrat said:

'Montserrat understands its responsibilities as a provider of Financial Services in the international market. We therefore welcome the KPMG report since its recommendations provide a basis for action geared to achieving internationally agreed standards of financial regulation.'

The Chief Minister of the Turks and Caicos Islands, Derek Taylor said:

'We welcome publication of the report. The next step is for us all to consult within our respective jurisdictions. We look forward to giving careful and constructive scrutiny to the report'

These comments follow a recent meeting in London attended by Ministers, senior officials and regulators from the Overseas Territories and the UK. This meeting agreed the following conclusions:

  • Each Overseas Territory would publish by 15 January 2001 a response to the recommendations addressed to it, together with a timetable for implementation.
  • Following appropriate consultation and parliamentary approval within each Overseas Territory, the core recommendations relating to independent regulatory authorities, anti-money laundering regimes and exchange of information would be substantially implemented by 30 September 2001.
  • The UK is willing to provide appropriate assistance to Overseas Territories in their bilateral and/or multilateral negotiations with other entities in matters relating to regulation and exchange of information.

Finally, the UK and Overseas Territories expressed their thanks to KPMG for producing a professional report on a short timescale.

.

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »