Belize Law of Offshore

Belize Table of Statutes

This is a non-exhaustive list of the main Belizean statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order - click on the statute for a fuller description of the statute or the legal regime it forms part of.

Belizean Nationality Act 1981
Commercial Free Zone (CFZ) Act 1994
Computer Wagering Licensing Act 1995
Exchange Control Regulations 1980
Export Processing Zone (EPZ) Act 1990
Fiscal Incentive Act No 6 Of 1990
IBC Act, 1990
Income Tax Amendment Act 1998
International Insurance Act, 1999
Limited Liability Partnerships Act, 1999
Limited Life Companies Act, 1999
Money Laundering (Prevention) Act, 1996
Mutual Funds Act, 1999
Offshore Banking (Amendments) Act, 2002
Protected Cell Companies Act, 1999
Registration Of Merchants Ships Act 1989
Retired Persons Incentive Act 1999
Trade Unions and Employers Organizations Act of 2000
Financial Intelligence Unit Act 2002
Trust Act 1992

Belize Banking Law

Offshore banking in Belize began when the outdated 1977 Banking Act, which did not adequately provide for a sound regulatory and supervisory authority, was repealed and replaced by the enactment of the Banks and Financial Institutions Act, 1995, and the introduction of the Offshore Banking Act, 1996, and the Money Laundering (Prevention) Act, 1996, which incorporated the best features of offshore banking legislation in Panama, Cayman and the British Virgin Islands.

The Offshore Banking Act was amended in 2002 to change the name of the Offshore Banking Act and offshore banks to International Banking Act (IBA) and international banks, respectively. The amendments also strengthen the supervisory and investigative powers of the CBB to meet international standards, to provide better transparency and exchange of information with respect to international banking and to empower the CBB to grant licenses for international banking.

A Belize International Bank can carry on the following activities within Belize:

establish, maintain, and operate a business office in Belize;
transact offshore banking business through its business office in Belize without restrictions;
transact offshore banking business with a local entity in Belize licenced under the Banks and Financial Institutions Act, 1995.

The major local banks offer a full range of international banking services including foreign currency savings and checking accounts earning tax-free interest and operated for the purpose of exchange control on a non-resident basis. Such accounts are offered to IBCs, individuals and trustees. Credit card services are also available.

Belize International Banks are not subject to exchange control regulations.

The Central Bank of Belize, the financial sector's regulatory and supervisory body, says that although many applications for international banking licences have been received since the introduction of the new legislation, only five had successfully met its requirements by mid-2003.

Two categories of Belize International Banks are currently available, "A" Class - Unrestricted and "B" Class - Restricted. A "B" Class bank is restricted to carrying on such business as is specified in its license.

The holder of an "A" Class internationak banking licence needs to establish, maintain, and operate a business office (physical presence) in Belize. This type of Belize International Bank is permitted to transact international banking business through its business office in Belize without restrictions on that business.

Authorised and paid up capital of not less than US $500,000 must be maintained if the licence is for a local company, or US $25,000,000 in the case of a foreign bank.

"B" Class - Restricted

The holder of a "B" Class international banking licence also needs to establish, maintain, and operate a business office (physical presence) in Belize, but they are limited to transacting only such international banking business as is specified in its licence. A "B" Class Belize International Bank is prohibited from soliciting or accepting monetary deposits or any other valuable property from the general public, as well as from issuing cheque books or providing any current deposits or chequing account facilities to depositors.

Authorised and paid up capital of not less than US$1,000,000 must be maintained if the licence is for a local company, or US $15,000,000 in the case of a foreign bank.

Belize's International Banking legislation stipulates that an entity is eligible to apply for an international banking licence if:

it is incorporated or registered under the Companies Act or the International Business Companies Act as a company limited by shares, or if it is a foreign bank;
its shares are in registered form and not in bearer form;
its memorandum and articles of association are acceptable to the Central Bank; and
its authorized and paid up capital are in compliance with statutory requirements (see above).

Upon application, eligible companies must furnish the following documentation, along with a non-refundable fee of US $500 (at the time of writing):

name and address of directors and principal shareholders;
the ultimate beneficial ownership of the company or proposed company where shareholders of record are, or are to be, corporations, trusts or other legal entities or organizations, or where the shareholders of record are acting as nominees for or under the direction of any other person;
the shareholding structure, management, and financial standing of the company;
detailed business and financial plans;
particulars of referees, guarantors and other third parties;
details of any subsidiary or affiliated company;
details of any overseas office which the company has or proposes to open;
names and addresses of the external auditors including the experience of the auditors in auditing banks;
if a foreign bank, a written statement confirming that there is no objection to the application from banking supervisory authorities in its country of incorporation and in the country where its principal office is located;
signed application by the directors of the eligible company; and
any other information that the Central Bank may require.

The Central Bank of Belize submits its recommendation to the Minister of Finance within sixty days of receiving a completed application. After which, a decision is rendered within four weeks by the Minister.

Belize Fiscal Incentives Act

The Fiscal Incentives Act 1990 (FIA) superseded and incorporated previous investment incentive legislation.

A company that meets the necessary criteria set by the Ministry of Economic Development is granted an "Approved Enterprise Order" (locally referred to as a "Development Concession") and is considered an "Approved Enterprise" under the FIA.

Normally tax holidays are given for a period of five years commencing from the date of production, but upon application the tax holiday period may be renewed for a further term not exceeding ten years. As an additional incentive, however, companies that will engage in Agriculture, Agro-industry, Food-processing, Mariculture or Manufacturing and whose operations are highly labour intensive and whose productions are strictly for export, can be granted tax holidays for up to twenty five years.

During the tax holiday period, an approved enterprise is partially exempt from the payment of income tax on all profits and gains accruing to the approved enterprise and arising from the production of the approved product or service under the Income and Business Tax Act, at the specified annual percentage rates.

In addition, any dividends or other profits arising out of such an enterprise during the tax holiday period and paid to shareholders during such period shall not be taken into account when the chargeable income of the shareholders is being ascertained. This benefit, however, shall not apply:

where the total amount of the dividends or profits paid to the shareholder exceeds an amount which is equivalent to the total amount invested by the shareholder in the said enterprise during its tax holiday period; and
where the shareholder is likely to become liable by the laws of his country of residence to pay additional tax owing to the fact that the dividend he received hereunder was not subject to income tax in Belize.

A duty exemption period is normally not more than fifteen years duration commencing from the date of the approved enterprise order, but in the case of an export enterprise this period may be extended for an additional ten years. And, for those companies engaged in Agriculture, Agro-industry, Food- processing, Mariculture or Manufacturing whose operations are highly labour intensive and whose productions are strictly for export, the duty exemption period can be up to twenty five years.

Upon production to the Comptroller of a certificate issued by the Permanent Secretary in the Ministry of Economic Development (such a certificate specifies under what terms and conditions certain articles or materials may be imported, e.g,. being that they are necessary for the establishment or expansion and conduct of the approved enterprise) an approved enterprise may import the following items into Belize, free of customs duty and stamp duty during the duty exemption period:

all building materials, plant, machinery, equipment, tools including specialist hand tools (but not including other hand tools), utility and transport vehicles, fixtures and fittings, office equipment and appliances, spare parts on plant and plant related machinery and agricultural machinery;
any raw materials or other items imported for use in the approved enterprise.

However, in the case of an export enterprise exporting to non-CARICOM countries, no duty exemption will be granted for any raw materials or articles which are available in Belize or in any Member State provided that they are of comparable quality and price.

All the rights, privileges, benefits, immunities, duties and obligations conferred or imposed by or under the FIA on an approved enterprise can be transferred to another company where:

the approved enterprise merges with or is taken over by another company, or forms part of another company's reconstruction, and/or
in the opinion of the Minister of Economic Development it is equitable or in the public interest to do so.

In addition, an approved enterprise can also benefit from Belize's access to a number of preferential markets. These include the USA under the Caribbean Basin Initiative, Canada under CARIBCAN, the Caribbean under CARICOM and Europe under LOME IV.

Establishing an Approved Enterprise

The Government considers several factors before granting development concessions to companies. These include: the company's local value addition, its profitability on investment, the potential for foreign exchange earnings or foreign exchange savings, the creation of employment, the transfer of new technology, the location of industry, the destination of the final products - export/domestic market, and the level of investment.

The following is required in order to obtain the status of an approved enterprise:

Establishment of a Chapter 206 Corporation;
Formal letter of application addressed to the Permanent Secretary in the Ministry of Economic Development;
Three copies of the project proposal, providing as much information about the project as possible;
The prescribed non-refundable fee, which varies depending on the size of investment as follows (at the time of writing):
- US $250,000 - $500,000, fee US $5,000;
- US $500,000 - $750,000, fee US $6,000;
- Over US $750,000, fee US $7,000.00

A "Belizean Company" with an investment of less than US $250,000 may apply without the payment of any fee. A "Belizean Company" is one which Belizean nationals own 51% or more of the share capital. A number of other supporting documents are also needed.

Belize Free Zone Acts

The Commercial Free Zone Act 1994 established a Commercial Free Zone at Corozal to attract foreign investment. The Zone provides facilities for various activities including manufacturing, processing, packaging, warehousing and distribution of goods and services.

Merchandize warehoused in the CFZ may be wholesaled or retailed for:

sales to diplomats of other countries who under customary and conventional international law are exempt from payment of duties;
sales to ships that dock at ports in Belize and are destined for other foreign ports;
sales for direct export whether by sea, air or land, provided that such merchandise arrive at the port of exit under customs control;
entry into national customs territory, provided the goods are sold wholesale, and the import license if so required, is secured and the customs duties paid;
entry into national customs territory, provided that the goods are sold retail in operations which have licenses to sell duty-free to residents and non-residents who are leaving the country and have submitted proof of departure. Such duty-free retailed goods shall be delivered to the buyers at a port of exit or embarkation.

Merchandise may be sold inside a CPZ from one business to another, provided that a proper record is kept of such transactions.

There are no restrictions on foreign exchange including the sale of foreign currency or the transfer of foreign exchange into, out of or within a CFZ by CFZ businesses. There are no Government charges and taxes on the use of foreign currency within a CFZ.

CFZ businesses are allowed to open an account in any currency with a duly registered bank of their choice which is located in the CFZ.

Duty exemptions and tax holidays are available to the investors in the Zone as follows:

All merchandise, articles, or goods entering a CFZ for commercial purposes are to be exempt from import duties, stamp duties and revenue replacement duties;
All fuel and goods including buildings materials, furniture, equipment, supplies and parts required for the proper functioning of a CFZ business is likewise are to be exempt from all duties and taxes;
No quotas upon any article, item, or goods apply to imports or exports of a CFZ business;
Imports or exports of a CFZ business do not require an import or export license.
Imports and exports of a CFZ to or from whatever destination (other than the territory of Belize) shall be exempt from all custom duties, consumption taxes, excise taxes, and export duties.

See Offshore Legal and Tax Regime for details of low rates of income tax paid by CFZ businesses.

The Export Processing Zone Act 1990

Belize's legislation defines an EPZ as being "a geographic area in Belize designated outside national customs territory and duly restricted by controlled access, wherein the benefits created shall apply to a complex of industries." The legislation also makes allowances for single businesses and their facilities, referring to these as "Special Export Processing Zones".

An EPZ business is only allowed to sell, lease or transfer any article, item, goods or services in an EPZ or outside Belize to other EPZ businesses, to foreign businesses, or to foreign individuals. However, waivers to this regulation may be provided upon application to the EPZ Committee (EPZC) and the Ministry of Trade and Industry. The EPZC comprises representatives from various Government Ministries, The Chamber of Commerce, the small business sector, EPZ developers, EPZ businesses, and the industrial sector.

In the EPZ, facilities are provided for activities in manufacturing, processing, packaging, warehousing and the distribution of goods and services. In fact, amendments made to the legislation in 1994, provide investors with the added option of constructing their own facilities and developing infrastructure within an EPZ, including independent utility installations. This option enables an EPZ to enhance its economic development, since it does not necessarily have to use the electricity or telephone facilities provided by the two local monopolies, The Belize Electricity Limited and The Belize Telecommunications Limited respectively.

Three locations have been designated as EPZs. The San Andres EPZ is spread across 28.5 acres of land in the northern section of the country, only 8 miles away from the Mexican border, and ideally located next door to NAFTA. The other two Zones are both located approximately 9 miles from Belize City, the country's commercial capital. The EPZ adjacent to the Philip Goldson International Airport covers a tract of 4 acres, while the Price Barracks EPZ covers 14 acres.

A developer is responsible for the administration of an EPZ, and needs to own or have leased all the land within the Zone, as well as provide infrastructure and public services within the area.

One of the main incentives for establishing an EPZ business in Belize is that of receiving a guaranteed tax holiday of 20 years. Under the tax holiday period, an EPZ business is exempt from income tax, withholding tax, capital gains tax or any new corporate tax. This incentive also comes with the following benefits:

the option to extend the tax holiday period;
losses incurred during the tax holiday period may be carried forward and deducted against any future profits;
and any dividend paid by an EPZ business is exempted from tax in perpetuity.

In addition an EPZ business is also exempt from:

currency export taxes or foreign exchange taxes on all purchases or sales of foreign currency;
customs duties, tariffs, consumption taxes, excise taxes, trade turnover taxes, or other taxes for all imports of an EPZ business into an EPZ;
customs duties, value-added taxes, sales taxes, excise taxes, trade turnover taxes, tonnage taxes, consumption taxes or other taxes for all exports of an EPZ business out of an EPZ;
capital gains tax on the sale of stock or other partial or complete ownership interest in an EPZ business, and property or land tax and property transfer tax. The Land Tax Act does not apply to EPZ property.

Bureaucracy is minimised for EPZ businesses:

no import or export licenses are required for any imports or exports into or out of an EPZ;
no licenses are required for domestic suppliers who sell to EPZ businesses;
no price controls for items sold by domestic suppliers to EPZ businesses;
no regulatory restrictions on any exports (except of course for fire-arms, military equipment or material, and illegal drugs under the laws of Belize).

The Supplies (Control) Act and the Rent Restriction Act do not apply to an EPZ business either. In addition, an EPZ business will enjoy:

negotiable factory space and energy rates;
on-site customs facilities;
no costs for work permits;
competitive wages;
satellite telecommunications and fibre-optic capability.

Preference is given to those businesses which will be located in an area designated by the EPZC as in most need of development, as well as to those businesses which will generate more jobs. Some of the most promising areas of interests are assembly plants, seafood processing, fruit processing, wood products, sporting goods, edible oils and fats, pharmaceuticals, canning and packaging materials, garments and yacht manufacturing.

The following procedures need to be undertaken to establish an EPZ business in Belize:

A completed application form along with the documents listed below must be submitted with a non- refundable application fee of US $500.00 (at the time of writing). This information will be reviewed by the EPZC within thirty working days of receipt.

Physical master plan showing overall layout;
proposed construction schedule;
capital cost estimate;
staff and management organisation;
five year financial projections, including leasing or sale arrangements plan;
copies of the company's Memorandum and Articles of Association, and Certificate of Incorporation;
two bank references on the firm and its main partners;
one commercial reference each on the firm and its main partners;
and any other information which the EPZC may require.

The Certificate of Compliance, issued by the Ministry of Trade and Industry, allows a company to conduct business within an EPZ. This certificate also states what lines of businesses the EPZ enterprise may conduct within the Zone. Application forms must be submitted along with the documents listed below. No application fee is required, but at the time of writing, an annual fee of USD0.13 per sq. ft. of industrial roof is payable. And, for those firms requiring over 7,500 sq. ft. of industrial roof, the excess of 7,500 sq. ft. is assessed at 80% of the basic fee mentioned above. The Ministry of Trade and Industry will review the information provided within thirty working days of receipt.

By signing an Operations Contract with the Ministry of Trade and Industry, the owner(s) of an EPZ enterprise pledges "compliance with all applicable legal and regulatory requirements under the laws of Belize, and all rules and regulations of the established EPZ."

Belize Shipping Law

Registration of Merchant Ships Act, 1989 established the International Merchant Marine Registry of Belize (IMMARBE). IMMARBE's worldwide network of surveyors provides shipowners with ease of access in obtaining the technical certification necessary for compliance with the legislation.

The Act stipulates that every vessel registered in IMMARBE must have a shipping agent in Belize. In addition, based on the type of ship, vessels seeking registration are expected to have the following certificates on board at all times:

International Loadline Ship Safety Radiotelephony;
Ship Safety Equipment Ship Safety Radiotelegraphy;
Ship Safety Construction International Oil Pollution Prevention;
International Tonnage Passenger Ship Safety;
Annual General Inspection Shipboard Oil Pollution Emergency Plan.

IMMARBE normally grants provisional registration to vessels for a period of six months (extensible to one year). Applicants may then apply immediately for permanent registration (valid for five years).

All formal applications need to be signed by both the shipping agent of the vessel and the shipowner or his duly authorised representative.

For provisional registration, the following documents are required in addition to the application form and fee:

a duly notarised power of attorney in favour of the shipping agent of the vessel;
a copy of a tonnage certificate issued by a classification society or technical company or a copy of the last patent from the last registry;

request for confirmation of availability of vessel’s name;

application for Registration of Ships form duly completed and signed by the applicant. One application for each vessel is required. This application includes the necessary information for the issuance of a Provisional Ship Station License;
proof of Ownership in the form of a Bill of Sale, Auction Document or Builder’s Certificate;
valid Cargo Ship Safety Radio Certificate in compliance with GMDSS Code (where applicable);
international Tonnage Certificate (where applicable);
proof of compliance with ISM Code-Copy of Document of Compliance and Safety Management Certificate (where applicable);
application for Minimum Safe Manning Certificate;
letter of confirmation from an authorized radio accounting entity undertaking the payment of vessel’s radio accounts;
letter of undertaking from ship owner that the applications for the Endorsements of Licenses for officers will be submitted.

In order to facilitate same day registrations, the above documents may be sent by fax.

For permanent registration, the following documentation (where applicable) need to be submitted:

a duly notarised bill of sale, or a duly notarised builder's certificate, if the vessel is newly built;
an original deletion certificate or a certified copy of the extract of registry from the previous flag administration;
a duly notarised power of attorney in favour of the shipping agent of the vessel;
in the case of a vessel which is over twenty years old, an inspection report prepared by an authorised Government Safety Inspection (GIS) Surveyor stating that the vessel has passed an inspection to determine seaworthiness;
an original or a certified true copy of a tonnage certificate issued by a survey company authorised by IMMARBE.
copies of all valid statutory certificates issued by a Recognized Organization on behalf of the Government of Belize, including the ITC, DOC, SMC, ILLC, CSSRC, etc.,
application form for Maritime Ship Station License duly completed;
copies of Document of Compliance and Safety Management Certificate issued by a recognized organization on behalf of the Government of Belize (where applicable).

All documents submitted must be in English or, if they are in a foreign language, they must be accompanied by an official translation.

IMMARBE also accepts vessels to be registered for a short period under special circumstances such as one delivery voyage for scrap. Procedures for special registration allow for documents to be issued with a validity of three months and automatic expiration when this period elapses.

Dual Registration

A vessel's status with IMMARBE will not be affected if a second registration in another country is obtained in order to comply with the terms of a charter contract. The applicant is responsible for obtaining the necessary approval in the country in which the second registration is being sought.

A formal application to IMMARBE is required, and it is to be submitted along with the following documentation:

full details of the contract, including the name and address of the charterer, and the date of expiration of said contract;
a notarised letter of consent from the mortgagee is also needed, if the vessel has a mortgage recorded on it.

Vessels may initially be granted dual registration for two years, during which they must continue to make all relevant annual payments and other dues to IMMARBE. A vessel's title, mortgage or other documents also need to be registered exclusively at IMMARBE's Head Office during this time period.

Registration of Foreign vessels

IMMARBE permits the registration of foreign vessels which are under the terms of a charter contract, as long as such dual registration is allowed by the vessel's mother country. The following documentation need to be submitted along with the completed application form and the prescribed fees:

notarised copy of the charter contract;
certificate of freedom from registered encumbrances or a registered lienholder's letter of consent.

After all the formalities have been met, IMMARBE will then issue a special navigation and radio licence to the vessel for an initial period of two years. Title, deed, mortgage or other documents relating to such vessel need to be registered only at the vessel's mother registry during this time period.

Registration of Particulars

Both preliminary and permanent registrations are available for titles, mortgages, assignments and other documents relating to vessels governed by the Belize Registration of Merchant Ships Act, 1989. A preliminary registration (valid for six months) has "the same legal effect as a permanent registration, provided that permanent registration is effected within the six months period of validity".

The documents that need to be submitted must be in duplicate and duly authenticated by a notary public or a Deputy Registrar of IMMARBE in the place where such documents were issued. If a document is not written in the English language, it must be translated to English by a competent and qualified translator in order for it to be registered.

See Offshore Legal and Tax Regime for details of fees and taxes payable in respect of ship registration.

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Belize Internet Gambling Law

Belize is one of the few countries that has enacted legislation allowing for the establishment of online wagering. Its Computer Wagering Licensing Act, 1995, which came into force on May 28, 1996, provides for the proper conduct and regulation of gambling via the Internet.

Besides legalising wagering on the Internet, the Act also provides for the licensing of computer services operators who provide Internet users with the facility to wager against each other on sporting events or other games of chance.

'Computer Internet' is defined in the Act as being any publicly accessible data transmission network, or any privately-owned data transmission network which is authorised to transmit such data. And, computer wagering service is defined as being a computer service which allows computer users to wager on sporting events or other games of chance against each other through the Computer Internet.

The Belize Computer Wagering Licensing Board vets all applications for licences to provide computer wagering services and, with the prior approval of the Minister of Home Affairs (Minister), can grant exclusive licences. They are also responsible for the control and regulation of all persons who provide computer wagering services.

The Board is comprised of the Accountant General, the Auditor General, the Permanent Secretary of the Ministry of Home Affairs, and three other persons appointed by the Minister, one of whom is appointed on the recommendation of the Leader of the Opposition.

Application for a licence to provide computer wagering services should be accompanied by the prescribed licence fee of US$15,000 (at the time of writing) for a non-exclusive licence. If an application is refused, the licence fee is refundable subject to an administrative charge.

If a licensee breaches any provision of the Act, or any regulations made thereunder, or any of the conditions attached to the licence, the Board may at any time revoke the licence without compensation and without prejudice to any other penalties imposed by or under the Act. Revocations may be appealed to the Minister whose decision is final. Regardless of the time of issue, an annual licence expires on March 31st next following.

The following documentation need to be submitted upon application for a licence to provide computer wagering services:

Application letter - including corporate name, website address and a brief description of the activities of the business;
Description of project - including methodology, operational procedures, etc.;
Business background of the Company as related to Wagering on the Internet;
Memorandum and Articles of Association;
Certificate of Incorporation or registration in Belize;
Names and personal employment record of the beneficial owner(s), officers and principal employees;
Character references of the beneficial owner(s), officers, and principal employees;
Police/criminal history record of the beneficial owner(s), officers and principal employees;
Names of all holding, intermediary and subsidiary companies;
Financial background of the Company;
Financial resources of the Company - including statement of assets, liabilities, net worth;
Bankers/financial references of the Company.

As a security for the performance of obligations under the licence and for the payment of any fine, licensees were required under the original legislation to make a cash deposit of US $500,000. This requirement was later substantially modified.

Other regulatory requirements include:

The maintenance of a separate bank account for processing wager transactions. Licensees may charge a processing fee not exceeding 5% of each transaction, or the sum of US $20, whichever is greater.
A copy of the daily transactions and the bank account balance of each computer user may be required by the Board.

Belize Money Laundering Law

Money Laundering (Prevention) Act, 1996 defines money laundering as engaging, directly or indirectly, in a transaction that involves property that is the proceeds of crime, knowing or having reasonable grounds for believing the same to be the proceeds of crime; or receiving, possessing, managing, investing, concealing, disguising, disposing of or bringing into Belize any property that is the proceeds of crime, knowing or having reasonable grounds for believing the same to be the proceeds of crime. Under Belize's legislation money laundering is also considered an offence for the purpose of any law relating to extradition or the rendition of fugitive offenders."

The legislation stipulates that anyone who engages or who attempts, aids, abets, counsels, or procures the commission of, or who conspires to commit the offence of money laundering is guilty of an offence. The above also includes such persons who at the time of the commission of an offence acted in an official capacity for or on behalf of a body of persons (either corporate or unicorporate) or purported to act in such capacity. However, if such persons provide evidence showing that the offence was committed without their knowledge, consent or connivance, charges may be dropped.

The penalty imposed on those convicted of money laundering can be in the form of a fine, ranging from US $12,500 to $50,000, or a term of imprisonment of 3-6 years, or a combination of both fine and imprisonment.

The Act also creates an offence of the divulgence of facts or other information to another whereby an investigation is likely to be prejudiced by a person who knows or suspects that an investigation into money laundering has been, is being, or is about to be conducted, punishable by a fine of not more than US $25,000, or by imprisonment of not longer than 3 years, or by both.

The falsification, concealment, destruction or disposal of any document or material which is likely to be relevant to an investigation into money laundering or to any order made in accordance with the provisions of this Act is punishable by a fine of not more than US $50,000 or by imprisonment of not longer than 5 years, or both.

An application can be made to the Supreme Court of Belize to freeze the property of, or property in the possession or under the control of a person who has been charged or is about to be charged with a money laundering offence, wherever such property may be located, if the property is alleged to be the proceeds of crime.

After a person has been convicted of a money laundering offence, the court may order that the property, proceeds or instrumentalities derived from or connected or related to such an offence be forfeited and disposed of in such manner as the Minister may direct.

However, all prosecutions, actions, suits or other proceedings brought for any offence, or for the recovery of any fines, penalties or forfeitures, need to be made within 5 years after the date the offence was committed or the cause of action accrued.

Reporting Requirements

Under the MLPA, financial institutions are required to maintain comprehensive records of all business transactions and to report suspicious financial transactions to the Supervisory Authority, which has unfettered access to the records held by financial institutions.

The Act provides the following as examples of "suspicious transactions": 'complex, unusual or large business transactions, unusual patterns of transactions whether completed or not, all unusual transactions, and significant but periodic transactions, which have no apparent economic or lawful purpose.'

If financial institutions or their employees, staff, directors, owners or other authorised representatives wilfully fail to report such type of transactions or wilfully make a false or falsified report on such matters they can be charged with a criminal offence. A financial penalty of not more than US $25,000 can be imposed, and the licence of such financial institutions may also be suspended or revoked, if found liable.

Financial Intelligence Unit Act 2002

On 16 September 2002, the Financial Intelligence Unit Act (FIUA) was enacted to transfer the Anti-Money Laundering Supervisory Authority from the Central Bank of Belize to the Financial Intelligence Unit (FIU).

By December 2002, the Financial Intelligence Unit was established, headed by the former Governor of the Central Bank of Belize, Mr. Keith Arnold, as the Director.

The FIU has the power to investigate and prosecute financial crimes, to coordinate the cooperation between law enforcement agencies, government departments and other regulatory bodies in evolving methods and policies to prevent and suppress financial crimes; and to process all request for legal assistance from foreign countries relating to financial crimes.

Financial crimes include those set out in the MLPA but also include more complex financial crimes, such as internet fraud, pyramid schemes, and illegal deposit taking.

International Cooperation

Belize is a member of the Caribbean Financial Action Task Force, an organisation of Caribbean States who have joined forces "to develop and share the latest intelligence on money laundering and other financial crime techniques used in the Caribbean region and elsewhere." This organisation works closely with the world's leading anti-money laundering authority, The Financial Action Task Force on Money Laundering, whose principles Belize also subscribes to.

The legislation makes provisions for the cooperation between the court or other competent authority of Belize and the court or other competent authority of another State on matters concerning money laundering offences in accordance with Belize's Money Laundering (Prevention) Act, 1996, and within the limits of the respective legal systems.

Belize is a party to the 1988 UN Drug Convention and is a member of the Organization of American States Inter-American Drug Abuse Control Commission (OAS/CICAD) Experts Group to Control Money Laundering. The United States and Belize signed a Mutual Legal Assistance Treaty (MLAT) in September 2000, but it is not yet in force.

Belize Trust Law

Belize established a modern Belize Trust Act in 1992 which incorporated the best features of similar laws prevailing in other major offshore jurisdictions such as Cayman, Panama and Bermuda.

Trusts can be established either by oral declaration or by written instrument. However, unit trusts must be formal written documents and trusts over property in Belize are unenforceable unless they are written.

Non-charitable Belize Trusts have a maximum life of 120 years. Charitable trusts may be established with unlimited duration.

Trusts formed under Belize law are highly secure since a Belizean court cannot set aside or vary a Belizean trust. No Belize Trust has ever been compromised. A Belize court cannot entertain any claim against the trust property emanating from the order of a foreign court regarding marriage or divorce, or succession or claims by creditors in an insolvency.

The law provides for the creation of spendthrift trusts and allows a settlor to be the beneficiary of a spendthrift trust. Settlors and beneficiaries may give to trustees memoranda of wishes to guide the trustees.

The law allows for a protector who may also be a settlor, trustee or beneficiary. In carrying out his duties, a protector has a fiduciary obligation to the beneficiaries of the trust. However, he or she is not considered a trustee.

A trust can have a minimum number of one or a maximum number of four trustees (except for charitable trusts). A trustee may also be a beneficiary and a settlor. Liberal powers are given to trustees to advance moneys for maintenance and education of children and beneficiaries.

Individuals serving as Trustees are personally liable at law for any losses as a consequence of a breach of trust. However, in the case of a corporate trustee the directors are not personally liable.

Trusts may be registered with the Belize Registrar at the option of the settlor for a fee of US$100 (at the time of writing). The Registrar is required to issue a certificate of registration. An entry in the register of trusts cannot be opened for inspection without the written consent of the trustee.

BELIZE: LAW OF OFFSHORE

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