In addition to the global financial downturn, the work of the international supranational bodies such as the OECD, G20, Caribbean Financial Action Task Force (CFATF) and the Foot Report commissioned by the UK Government in London impacted the industry. To date, Anguilla has signed 11 of the required 12 Tax Information Exchange Agreements (TIEAs) with the UK, the Netherlands, the Republic of Ireland, Denmark, Iceland, Finland, Sweden, Norway, Greenland, New Zealand and the Faroes Islands. The extended deadline is now March 2010 and Anguilla is confident that it will make this target.
In 2009 also, Anguilla was assessed by the CFATF regarding its Anti-Money Laundering and Terrorist Financing (AML/CFT) regime and the findings will be published in due course. The Foot Report has elicited much discussion in the jurisdiction and a formal response from the two industry bodies, the Anguilla Financial Services Commission (AFSA) and the Anguilla branch of the Society of Trust and Estate Practitioners (STEP) was made publicly at the annual industry meeting between the Government of Anguilla, Financial Services Commission (FSC) and practitioners held in November. The two bodies also wrote formally to the Anguillian and British governments setting out their concerns in early December. There will be increasing interface between the industry and government as the way forward to develop the sector becomes increasingly difficult as external forces impact it and conditions change.
Both the private sector and government continue to create the right environment for the conduct of international business through their marketing efforts, the development of institutional structures and the enactment of regulations and product offerings while ensuring that international standards are met and Anguilla is not blacklisted by any of the “watch-dog” bodies. Following on from the successful introduction of guidelines dealing with insurance companies in 2008, which covered areas such as the responsibilities of insurance managers, allowable assets and minimum margins of solvency, new licensing procedures which provided further regulatory clarity which were issued by the FSC, and the enactment of the Anguilla Foundation Act, further legislative enactments were made in 2009.
Of particular note was the new Proceeds of Crime Act (POCA) which was enacted following extensive consultation with the Anguilla Bar Association, AFSA and civil society organisations. This legislation strengthened the fight against financial crime while seeking to strike the correct balance with civil liberty and privacy rights protections. In addition, under the POCA, a new AML/CFT Code was issued which strengthened the fight against these two illicit activities. A new AML/CFT issues guide for procedures manuals was also issued by the FSC to assist service providers in adapting their internal procedures manuals to reflect the new regime.
The government also enacted a Money Services Business Act (MSBA) to regulate the operations of the money transmission businesses such as Western Union and Money Gram as well as others which operate in Anguilla thus ensuring that these businesses are not used to engage in money laundering activities. The Payment Systems Act 2009 which provides for the settlement of cash and wire transactions through the platform of the Eastern Caribbean Central Bank (ECCB) was also enacted and compliments the MSBA. Plans are in the works to enact new legislation which will cover International Insurance, Domestic Insurance and Cooperative Societies which will strengthen the regulation of these areas in 2010 and beyond. The FSC has also been tasked through the recent legislative changes and enactments with responsibility for the regulation of designated “non-financial businesses and persons” and designated “not-for-profit” organisations.
From a governance perspective, the jurisdiction saw the appointment by the UK of a new governor who has overall responsibility for the financial services sector under the constitution of Anguilla and who is more actively involved in the entire regulatory regime. In addition, there will soon be changes in the leadership of the FSC since both the current Director and Chairman will demit office at the end of 2009 and early in 2010 respectively. The FSC, in line with recommendations made by external assessors and the international reviews, plans to strengthen its regulatory capacity by employing at least three new regulators in the short term and with a longer term goal of recruiting further examiners.
Overall, Anguilla continues to show small but steady growth in the industry. As of November 15, 2009 there were 426 entities licensed by the FSC including mutual funds, fund administrators/managers, trust companies, registered agents and so forth. Of note is the fact that five years after the enactment of the Insurance Act 2004 which launched the jurisdiction as a captive domicile, Anguilla now has 200 captives. This is indeed a significant achievement of which the jurisdiction is justly proud. In addition, after only just a few months, eight foundations have been set up in the jurisdiction which has the potential to make Anguilla unique in being a jurisdiction that has the widest possible menu of product offerings of any jurisdiction.
The FSC continues to generate surplus revenue for institutional capacity building and development and the companies registry continues to show increasing revenues which will total over $2.5 million for the first time in 2009. Company incorporations continue to increase slightly and around 2,500 companies are projected to be incorporated for the year.
Although this number is small in comparison to other jurisdictions, this is an achievement for a jurisdiction which prides itself on quality business which is sustainable. The number of registered agents or company managers, as they are known in Anguilla, continues to increase and now total 70 while overseas agents which access the registry directly through the ACORN (Anguilla Companies Online Registration Network) system total around 115.
From a business development perspective, the Government of Anguilla has committed to upgrade the ACORN system which allows for 365 day a year, 24 hour a day company formation through an internet based interface which is connected directly to the companies registry. ACORN 2.0, as it is called, will be launched in 2010 and will result in greater efficiencies and capabilities and will bring the system up to date with 21st century technology and the latest features of an IT based programme. This will keep Anguilla’s company registration system as the most-advanced and fastest in the world thus giving the jurisdiction a slight competitive advantage. In addition, after over ten years of discussions, Anguilla Finance, an industry marketing body will hopefully be finalised in 2010, for launch then or shortly thereafter. The proposal is for a body funded jointly by the industry and the Government of Anguilla to handle the marketing of the jurisdiction. Currently, this function is handled by the Registrar of Companies but in line with the development of the industry, this will be transferred to a dedicated marketing body, Anguilla Finance, which will focus solely on business development as is the case in other jurisdictions.
In 2010, in addition to the legislative programme mentioned earlier by the FSC and Government of Anguilla and the planned establishment of Anguilla Finance, plans are afoot to host a major road show to Shanghai, China as well as more actively promote the jurisdiction in Latin America and Europe. Together, this combination of legislative innovation and product development, along with a new and hopefully expansive marketing thrust, the goal of growing the jurisdiction will continue and be achieved to a greater extent. All the stakeholders are committed to this and new opportunities of attracting quality business, despite the economic conditions, exist. The future for the jurisdiction is therefore bright and indeed, Anguilla is still, “better for business.”