By Brian Stuart-Young, Chairman and CEO, Global Bank of Commerce, Ltd. www.globalbankofcommerce.com
Antigua & Barbuda established its International Financial Centre in 1982, one year after its independence from the United Kingdom, and is now a favorite destination in the Eastern Caribbean for both tourism and international financial services. However, it is not unscathed by issues relating to the world financial crisis, even though it had no direct exposure to the toxic sub-prime mortgage debt that triggered the crisis. The domestic economy is largely dependent on tourism and has been affected by the financial constraints experienced by most travelers by sea and air. Clients of the international financial centre have also experienced credit restrictions in their home markets and were forced to disrupt their wealth management portfolio to address their personal financial circumstances. Notwithstanding the challenges of the prevailing environment, Antigua and Barbuda has the commitment of both its government and private sector to ensure an infrastructure which can respond to the special business needs and financial services of Caribbean and international client relationships.
A REGULATORY ENVIRONMENT FOR INVESTMENT
The jurisdiction has a robust mutual legal regime which facilitates a transparent process under which information may be exchanged. It is in full compliance with the OECD and has successfully completed twenty tax information exchange agreements by mid 2010 and was placed on the OECD’s ‘white list’ of compliant jurisdictions. Mutual legal assistance in anti-money laundering and financing of terrorism matters is also provided for under the Mutual Assistance in Criminal
Matters Act (MACMA). The MACMA provides for mutual assistance for all countries that are members of the British Commonwealth, the United States of America and for other countries for which Antigua and Barbuda has signed mutual legal assistance treaties (MLATs). There is no legal or practical impediment for rendering assistance where both countries criminalize the underlying offence. The jurisdiction also benefits from being a member of the Egmont Group through Antigua’s supervisory authority, Office of National Drug and Money Laundering Control Policy (ONDCP), which assists communications between Financial Intelligence Units to prevent money laundering and the financing of terrorism. The governing legislation for the management of its international financial centre is regularly updated to ensure compliance with international standards.
The regulatory environment of banks providing international financial services is strongly supervised for the safe and ethical depository of foreign currencies and the delivery of wealth management solutions. The jurisdiction undergoes regular peer evaluation by the Caribbean Financial Action Task Force as well as reviews by the World Bank and the IMF, all of which give enhanced scrutiny to the operations of the financial centre. The supervision of banks is divided with domestic commercial banks under the Eastern Caribbean Central Bank, and international service banks are licensed and regulated by the Financial Services Regulatory Commission (FSRC) and must maintain internal policies to govern compliance with international standards. With these actions, the jurisdiction has been aggressively emulating the actions taken worldwide to strengthen the regulatory oversight of all financial systems. The FSRC has already adopted stronger levels of supervision for its annual examination of all international service banks. Annual financial audits are mandatory and are conducted by resident offices of well recognized auditing firms including PriceWaterhouseCoopers, PKF and KPMG. The banking sector has also taken actions to ensure the compliance of their institutions to international standards and in association with the Caribbean Association of Indigenous Banks (CAIB) have launched the Caribbean AML/CTF Principles for Correspondent Banking. These Principles, with associated AML/CTF Guidelines, are a core set of standards to which Member Banks will subscribe by having their Boards of Directors agree to adopt and ensure their institution operates in accordance with these standards. CAIB also promotes the Caribbean AML/CTF Principles to the several regulatory and supervisory authorities for AML/CTF matters in the Caribbean region, so that Member Banks’ compliance with these standards will also be observed during regular bank examinations. Subscribing banks to these Principles, including those from Antigua, are identified on the CAIB website www.caribbean-principles.com.
The combination of well-regulated financial services, world class communications, an English-speaking and skilled workforce and strong professional resources offers a positive environment for electronic and international business services. Antigua provides ideal support for information technology services and Internet-driven business opportunities that demand more sophisticated financial services. The Antigua & Barbuda Investment Authority established by the Government assists the investment process and identifies related incentives for certain investment categories. Modern financial services include Internet banking, telephone banking, wire transfers in major currencies, corporate and trust administration, pension and fund management, payroll services, electronic commerce facilities that allow online sales of international services and products and the development of multi-functional prepaid debit cards. These are powerful financial tools that enable business people to compete in an international and open market environment. The remarkable growth of the Internet is impacting economies around the world, and Antigua is no exception. As an independent nation, it is well positioned to attract international business for electronic commerce. The government has passed the relevant legislation to govern e-commerce, the Electronic Transactions Act, and also to control abuse of electronic systems and protect the safety of online activity. The government is also committed to operate as an e-government and has positioned Antigua to become a leading Caribbean IT centre. One of Antigua’s banks sponsors the Global Processing Centre, Ltd., which is a world class card processing facility that hosts a platform to support all types of local and international transactions for ATM, Point of Sale and web based Ecommerce services. This helps to broaden the scope of services that can be arranged and offered from the jurisdiction including micro-finance services, international remittances, and a variety of payroll and employee benefit programs, all of which can be successfully managed on payment cards. The processing data centre helps to support enhanced due diligence for card holders by filtering all cardholder identities through the OFAC list of terrorists and drug offenders, and by hosting customer information details on card holders from all card programmes. The Centre’s platform is expanding to support mobile commerce which will allow it to play a greater role in facilitating small payments worldwide.
Antigua has become attractive to international investors from Latin America, Europe and the Far East seeking private banking services and wishing to balance their portfolios with certain commodity and foreign exchange trading services, and who may be interested in property investment in the jurisdiction. Increasingly, investors have been purchasing properties in Antigua & Barbuda as vacation and second homes. These investments also qualify them for Permanent Residency, and they can obtain advice from any of the major accounting firms with offices in Antigua such as PriceWaterhouseCoopers, PKF, KPMG or their own advisory resources for tax planning arrangements. Several major real estate developments are being undertaken in Antigua & Barbuda, and interest from international investors has been significant. The resident banks have been supportive to investors pursuing local real estate and tourism projects. Antigua’s financial centre has legislation to govern the operation of various types of formal structures often required to support wealth management strategies, including the establishment of trusts and foundations and the incorporation of international businesses and limited liability companies. There is a fully experienced and professional sector comprised of attorneys-at-law and licensed company providers that can assist in the clearing of names, registration of corporate entities and referring clients for bank account
relationships in the jurisdiction.
Business persons who demand efficient international banking will appreciate the services offered in Antigua. Internet banking provides 24/7 access to view account activity, establish bill-payments and standing orders, and initiate wire transfers and other necessary communications to the bank. To further assist and maintain financial control over accounts are related card products linked to customer accounts that permit access to funds around the world at banks, merchants and ATMs. Strong and secure communications defy geographic constraints by putting the bank branch in your backyard and full banking services at your fingertips. The expansion of technology-driven facilities to support mobile payments will position the jurisdiction to be able to attract micro-finance and payment services.
ANTIGUA’S INTERNATIONAL FINANCIAL CENTRE
Antigua’s International Financial Centre is successfully addressing the challenges posed by the world financial crisis and has appropriately reorganized itself to meet the requirements of modern business and the surge of global demands for financial solutions for international business, wealth management and e-commerce services. It is redefining the role of international banking relationships and complimenting global business opportunities that need financial solutions. The combination of well-regulated financial service providers and the ability to offer modern and technology-driven financial services in a stable environment makes Antigua & Barbuda a premier location for doing global business.