Anguilla: Legislative Developments Bearing Fruit

By Pam Webster, Managing Partner, Webster Law, Anguilla (01/02/2013)

The past year has been a fruitful one for the Anguilla financial services industry and has seen great strides taken in the development of co-operation between the industry and the regulatory side, (the Financial Services Commission (FSC) and the Financial Intelligence Unit (FIU).

These developments have been accelerated by the activities of the new combined industry body, Anguilla Finance Limited, and by the appointment, effective mid-July 2012, of Keith Bell as Director of the FSC.

Mr Bell is a Certified Management Accountant (Ontario) who prior to joining the Commission worked for 20 years as a deposit taking institutions supervisor with the Office of the Superintendent of Financial Institutions (Canada) and its predecessors. He has also served on 25 IMF/World Bank missions to assess countries’ systems of banking supervision, including six dealing with international financial centres (Bahrain, Mauritius, Jersey, Antigua & Barbuda, Luxembourg, Guernsey), and as a consultant to financial services regulators in the British Virgin Islands and Jamaica, and on longer term assignments with the Central Bank in the Bahamas and with the Bank of Jamaica.

Within a few weeks of Mr Bell’s arrival in Anguilla, an important joint industry Seminar was held at which the principal topics examined were the Anti-Money Laundering (AML)/Combatting the Financing of Terrorism (CFT) legal framework, the FIU functions, the industry’s compliance standards and the obligations of regulated entities to maintain AML/CFT defences.

Shortly after that Seminar, the FSC published new Licensing Guidelines in respect of offshore banking and in respect of introduced business, together with Policy Guidance on the revocation and cancellation of mutual fund licenses (including certificates of registration or recognition).

In October, a Financial Action Task force (FATF) notice was published, which dealt with high-risk and non-cooperative jurisdictions, and called on its members and other jurisdictions to apply counter-measures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (AML/CFT) risks emanating from the jurisdictions, namely Iran and the Democratic People's Republic of Korea. It also listed jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing their deficiencies, or have not committed to an action plan developed with the FATF to address their deficiencies, and called on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described in the notice.

In the meantime, the FSC has stepped up and streamlined its process for auditing the compliance of financial service providers in the jurisdiction, a process that should significantly increase the efficiency with which the industry delivers services to its clients.

The Commission held its annual meeting with the industry at the end of October, the theme of which was ‘Building a Sustainable International Financial Centre (IFC)’. The topics included the qualities required to be the jurisdiction of choice and laid strong emphasis on training, the skills pool and integrity and service and showcased the contribution that Anguilla Finance can make towards integrating these vital factors to achieve an even more successful outcome than hitherto. From the FSC side, emphasis was laid on the essential need for compliance in a successful IFC. The market area of captive insurance was also scrutinised, that being the sector in which Anguilla has achieved spectacular success in recent years, being rated as one of the leading middle-market jurisdictions in the sector, with highly regarded legislation and service level responsiveness.

Anguilla’s aim is to be the jurisdiction of choice for all of its key product lines and to have pride in its reputation, which is second to none. The island has a first class record of regulatory standards and service levels and strives to provide a responsive and thoughtful attitude to clients’ needs. The private sector, along with Government and the FSC continuously review best practice and respond in a timely manner to update legislation as necessary.

By virtue of its constitutional status as an Overseas Territory of the United Kingdom, Anguilla is leading several regulatory initiatives in the Caribbean aimed at profiling the region as one of the most secure areas in which to invest.