23 Jan 2012
How have banks in the Caribbean adjusted their internal compliance regulations in order to tighten security?
A key issue for Caribbean banks – and indeed any bank that lacks a support network of parent offices located in major financial centres – has been the maintenance and strengthening of correspondent banking relationships. Caribbean banks require relationships with other banks operating in major money centres through which they can conduct international cash clearing and transfer services; they are entirely reliant on correspondent facilities from banks that provide intermediary services.
Given the various international issues that have caused heightened scrutiny over correspondent relations – coupled with the global demands to prevent money laundering and terrorist financing – the Caribbean Association of Indigenous Banks (CAIB) has achieved stronger relationships through establishing a code of principles by which member banks will demonstrate compliance in line with international standards. The initiative has been encouraged by correspondent banks currently conducting business with Caribbean banks.
How do these principles help to build the reputation of Caribbean banks?
In keeping with the principles espoused by the Wolfsberg Group – a body of 11 major banks that provide international correspondent banking services – CAIB’s Advocacy Committee has developed the Caribbean Principles. This set of principles establish risk management standards for members and comply with related international standards to support the reputation and operational integrity of Caribbean banks.
How does Antigua ensure that it does not fall into the category of a tax haven?
Antigua’s jurisdiction boasts a robust mutual legal regime which facilitates a transparent process under which information may be exchanged. The destination would never allow itself – or the banks operating within it – to be used as a secret tax haven, and it recognises the requirements for tax compliance and anti-tax fraud policies.
Notably, Antigua’s jurisdiction system was one of the first Caribbean jurisdictions to establish a Tax Information Exchange Agreement with the US, and has held tax treaties with the UK and the Caribbean Commonwealth Community for many years. Moreover, it successfully completed more than a dozen tax information exchange agreements by the last quarter of 2009, which made it tax compliant with OECD requirements, and subsequently placed it on the OECD’s ‘white list’.
How does Antigua manage mutual legal assistance services, especially considering secrecy laws?
Antigua is firmly committed to mutual cooperation and the preservation of a safe financial sector environment. It has ratified mutual legal assistance in anti-money laundering and anti-financing of terrorism matters as provided for under its Mutual Assistance in Criminal Matters, which provides mutual assistance for all countries that are members of the British Commonwealth, the US and for other countries for which Antigua and Barbuda has signed mutual legal assistance treaties.
Significantly, the jurisdiction is a member of the Egmont Group through Antigua’s supervisory authority, the Office of National Drug and Money Laundering Control Policy (ONDCP). The policy has been put in place to aid communications between different financial intelligence units to prevent money laundering and the financing of terrorism.
How does the imposition of global banking regulations affect Antigua?
The impact of the financial crisis has touched banking worldwide and Antigua is well aware that only the safe and strongly regulated jurisdictions will survive. 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.
What makes Antigua attractive for investors and businesses seeking international ecommerce services?
The remarkable growth of the internet and mobile services is impacting economies around the world, and Antigua is no exception. Antigua provides ideal support for information technology services and internet-driven business opportunities that demand more sophisticated financial services. Modern financial services include internet banking, telephone banking, wire transfers in major currencies, corporate and trust administration, pension and fund management, as well as electronic commerce facilities that allow online sales of international services and products. These are powerful financial tools that enable businesses to compete in an international and open market environment, and also stimulate more convenient person-to-person payments.
Are there any related services that may benefit investors and businesses?
A significant enabling factor for ecommerce services is Antigua’s Global Processing Centre, which is a world-class card processing facility that hosts a platform to support all types of local and international transactions for card issuing, ATM, point of sale and web-based Ecommerce services. The processing data centre is fully PCI certified annually and helps to support enhanced due diligence for card holders by filtering all cardholder identities through the OFAC list and other relevant lists, and by hosting card customer due diligence information for its bank clients. The centre’s platform is currently integrating with a mobile platform to support mobile commerce and wallets, which will allow it to play a greater role in facilitating small payments in the region.
How do you predict Antigua and Global Bank of Commerce will develop over the next five to 10 years?
In today’s financial world, five to 10 years is a very long time. Antigua is traditionally a premier tourism destination and has successfully developed its service sector. It then expanded its services to provide international financial services, and its future is still dependent on these two pillars for growth.
With regards to the financial sector, it is likely that the growth will primarily occur in the provision of technology-driven financial services for banks in the region, rather than within the area of simple deposit services. Global Bank of Commerce has always been a leader in payment services, and we expect our portfolio to grow with the enabling support of Global Processing Centre. The face of payments is changing, especially small payments, bill payments, micro-finance and remittances. We expect that Antigua and its banks will play a strong role in the development of these emerging financial services.
For more information please call 268-480-2240, fax 268-462-1831 or visit www.globalbankofcommerce.com