St. Vincent and the Grenadines Executive Summary
The state of St. Vincent and the Grenadines
(SVG) is in the Caribbean, 1,600 miles southeast
of Miami and 100 miles from Barbados. SVG
consists of a group of 18 small islands, of
which the biggest is St Vincent, with the capital,
Kingstown, which has a natural deep-water harbour.
St Vincent is a lush volcanic island, just 18
miles north to south and 11 miles wide; the
climate is tropical.
Fought
over for nearly a century by the French and British,
sovereignty of SVG was settled on the British
in 1783. Now SVG is an independent parliamentary
democracy, with a legal system based on common
law. The currency is the Eastern Caribbean Dollar
(EC$) which is linked to the US$ at an exchange
rate of 2.7 EC$ to 1 US$ (2006), and is managed
by the Eastern Caribbean Central Bank with headquarters
in St. Kitts.
The
population of the islands was estimated in 2011
to be around 104,000, and is static.
The
economy moved from dependence on sugar to dependence
on bananas; but tourism is now the biggest earner,
and the government has been trying hard to build
a financial services centre. Economic growth was
dented by a combination of climatic problems,
9/11 and the need to rein in a free-wheeling financial
services sector to placate the OECD and FATF.
The government, which took office in April 2001
and was re-elected in 2005 and 2010, implemented
an ambitious framework of policy reforms designed
to strengthen the public finances, achieve higher
growth, lower unemployment and reduce poverty.
The
Offshore Finance Authority (now renamed the International
Financial Services Authority) was created by Parliament
to institute a new system to manage, direct, control
and supervise the offshore financial services
industry in SVG. After a number of closures in
2001, the sector now seems to be growing in a
stable fashion. Key sectors are banking, trusts,
insurance and mutual funds. There are estimated
to be around 9,000 International Business Companies.
A modernized IBC Act was implemented in 2008.
Historically, SVG has provided a high degree of
confidentiality for investors, although an Exchange
of Information Act passed in 2002 has qualified
this to a certain extent.
Cable
and Wireless provides telecommunications services
in SVG; however the Government has liberalized
the telecommunications market and two additional
companies have been given licenses for mobile
services. Digicel sued Cable & Wireless for
allegedly impeding its progress in introducing
competing telecoms offerings but lost the claim
in the UK High Court in April, 2010.
Following
a substantial amount of new legislation, SVG was
given a clean bill of health by the FATF in June
2003. The FATF Implementation Progress Report
on SVG was very complimentary about the “substantial”
amount of training provided to financial institutions
with respect to anti money laundering requirements.
The report also had high praise for the Financial
Intelligence Unit, saying “cooperation provided
by the FIU has been excellent.”
The
FIU has been accepted into the Egmont Group. St
Vincent is a member both of the Organization of
Eastern Caribbean States and of the Caribbean
Single Market and Economy within CARICOM; but
only limited progress has been made towards the
creation of a single market in the area.
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