December 19, 2007
The Offshore Financial Services sector in Nevis continued to do well and Premier of Nevis and Minister with responsibility for Finance Hon. Joseph Parry, said the industry had raked in $11million into the coffers of the Nevis Island Administration (NIA) for 2007, as of November 28. It represented a nine percent increase for the corresponding period in 2006.
Mr. Parry brought the matter to light during his 2008 Budget Address presentation, under the theme “Moving to a higher level of progress ““ People Empowerment”, at a sitting of the Nevis Island Assembly Chambers in Charlestown on Monday, December 17, 2007.
He explained that the industry was an important component in the Administration’s thrust for economic and social development and the sector contributed over 11 percent of the government’s revenue.“We also registered 3,191 new entities for the year up to 28th November representing a 10 percent increase over the corresponding period last year. This sector now contributes over 11 percent of government’s revenue which demonstrates, beyond any doubt, its importance and the need for progressive policies to continue the propulsion forward,” he said.
While the Finance Minister spoke to the scheduled Mutual Evaluation Assessment to be undertaken by the Caribbean Financial Action Task Force (CFTAF) in 2008 and the Federation’s election to serve as Deputy Chair of the CAFTF, he said both developments would propel Nevis, which had been recognised as an international financial services jurisdiction, into the spotlight.
“Both of these developments require that we make the necessary enhancements and improvements to our administrative, legislative, judicial, law enforcement and regulatory structures to bring them to levels where we can proudly face the inevitable international scrutiny and also be in a position to take full advantage of the positive spin offs that can be derived from the increased international exposure,” he said.
The Nevis Island Assembly had recently passed the International Mutual Funds Amendment Ordinance and paved the way for the registration and administration of international and mutual funds from Nevis as of January 01, 2008.
Mr. Parry said the Administration was confident that the Nevis jurisdiction could develop the market to establish itself as a preferred domicile for private and professional mutual funds.
“We are also working assiduously to attract a reputable international offshore bank to Nevis to expand the banking services offered to the corporate clients and provide a fillip to the sector.
“We are proposing to amend the Offshore Banking Legislation to make it more attractive to reputable banks. However, it is not our goal to become a premier banking jurisdiction. Our interest is to provide more valuable added services to our service providers and their corporate clients,” he said.
The Finance Minister further stated that though the Nevis jurisdiction now offered a diverse range of products which included mutual funds, insurance and foundations, the Administration’s strategy would focus on a more effective promotion of those products in the international community and also to improve the regulatory infrastructure to make the jurisdiction more attractive to reputable and a high profile financial institutions.
“There will be a shift in marketing strategy to focus greater attention on targeting the major service providers of offshore services rather than present emphasis of providing the various legislations at conferences and trade shows. We will find out the needs of the movers and shakers in the industry and take the appropriate action to attract them to out island,” he said.
Mr. Parry listed a number of steps which he said would be taken in 2008 to raise the profile of the Nevis jurisdiction.
He said the Administration in conjunction with the Legal Department would prepare the blue print for the establishment of a Single Regulatory Unit as of January 01, 2009, which would serve to regulate financial services businesses operating in Nevis.
The Unit would be established as a statutory body to encourage greater independence and to expand its regulatory coverage to include Credit Unions, local insurance companies and Money transfer agencies.
The NIA would also work with stakeholders in the industry and the Legal Department to oversee the passage and implementation of a Service Providers Ordinance and related Regulations and Code of Practice.
The Administration also plans to establish an effective risk based supervision programme by conduction a risk assessment of all licensees and establishing risk based supervision schedule for onsite inspection and offsite monitoring and to develop statements of guidance for licensing processes and establish timelines for completion of these processes.
Also, there will be active participation in the Federation’s Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) Task Force to review the federation’s legal administrative and regulatory structures, identify and correct deficiencies and weaknesses and implement related initiatives prior to the commencement of the Mutual Evaluation Assessment Exercise.
The establishment of a Society of Trusts and Estate Practitioners (STEP) Branch would also be promoted within the federation to encourage industry parishioners to pursue related professional accreditation.
Meetings with attorneys, real estate agents, lawyers, notaries, accountants and Trust Company Service providers who are classified as Designated Non-Financial Business and Professions (DNFBPs) will be held, to outline their specific obligations under the Anti-money laundering and Anti-terrorism laws in accordance with the FATFs 40 recommendations and 9 special recommendations.
The Administration will so conduct annual training seminars in compliance and hold a certification course; solicit the assistance of the Caribbean Regional Technical Assistance Centre in the review of proposals, formulation of legislation and the development of human and other resources necessary for the establishment of a Single Regulatory Unit in Nevis.
There will also be the establishment of an Investment Promotion Agency, with a key objective to promote the financial services industry.