Anguilla: Law of Offshore
The Anguillian government has enacted a range of legislation designed to strengthen the regulation of the jurisdiction's financial services.
The legislation put in place at the beginning of the decade addressed the issue of money laundering. It includes the Proceeds of Criminal Conduct Act 2000 (PCCA), which the government says 'deprives criminals of the benefit of their criminal activity and enables the Court to confiscate assets originating from criminal conduct. It also establishes the circumstances under which suspicious transactions should be reported.'
The government also established a Money Laundering Reporting Authority for Anguilla via the Money Laundering Reporting Authority Act 2000 (MLRAA). Under the act, persons involved in the provision of financial services are required to report to the Authority any suspicious transactions derived from drugs or criminal conduct. Under the MLRAA, procedures are established for customer identification, the keeping of records, internal reporting and training procedures.
Guidance notes issued in conjunction with the Act aim to 'assist all financial services businesses to develop policies, systems, controls and procedures that will minimise their risk of becoming unwittingly involved in money laundering schemes.'
The Anti-Money Laundering and Terrorist Financing Regulations 2009 significantly increased fines for the failure to adhere to due diligence rules or the reporting of suspicious transactions and replaced the The Anti-Money Laundering Regulations M 100-2.
In addition to this legislation, the government introduced two new laws - the Company Management Act 2000 and the Trust Companies and Offshore Banking Act 2000 - to replace existing legislation. The former provides for licensing and regulation of company management business by setting minimum criteria for the granting of a licence, and a further provision allows for exchange of information with overseas regulatory authorities.
The Trust Companies and Offshore Banking Act 2000, which replaced the Offshore Banks and Trust Companies Ordinance 1991, sets out the duties of licensees of banks and trusts and the minimum criteria for the granting of a licence. It also enables the surrender, suspension and revocation of licences.
Finally, the Anguillian government amended certain existing legislation. The laws affected were the International Business Companies Act 2000, the Companies Act 2000, the Limited Liability Company Act 2000 and the Limited Partnership Act 2000. Sets of Regulations were issued under most of these new Acts.
John Lawrence, Director of the Financial Services Department of the government, said at the time that: 'The new legislation is part of the Government's determination to effectively match the growth of Anguilla's financial services with robust and progressive laws that meet international regulatory standards. Our innovative on-line company registration system, ACORN, further enhances regulation as it is overseen by my department. Anguilla's reputation for being a proactive and well-regulated jurisdiction will be reinforced by these new laws."
In early 2004, the Anguilla Financial Services Commission (as it had by then become) proposed some legislative changes under the Companies Act, one of which requires all firms recognised as licensed service providers to have a registered agent.
In June 2008, the Anguilla Foundation Act 2008 came into force in a move to further increase the competitiveness of the Anguilla financial services industry. The Act allows the establishment of a foundation by either natural or legal persons. Initial capital must be no less than USD10,000.
Anguilla signed its first Tax and Information Exchange Agreement (TIEA), with the United Kingdom, on July 21, 2009. The agreement, which will allow the sharing of tax-related information to the Organisation for Economic Co-operation and Development’s (OECD) standards, was signed in London by Chris Bryant, UK Parliamentary Under Secretary of State at the Foreign and Commonwealth Office and Osbourne Fleming, Chief Minister of Anguilla.
The taxes covered by the arrangement in the case of the UK include income tax, corporation tax, capital gains tax, inheritance tax and value-added tax. In the case of Anguilla, the taxes covered by the TIEA include property tax, stamp tax, accommodation tax, the vacation residential asset levy and various duties, fines and other levies in relation to the import, export, transshipment, storage and circulation, among other things, of certain goods.
Welcoming the signatures, UK Financial Secretary to the Treasury, Stephen Timms MP, said: “Information exchange is a vital tool in ensuring that governments receive the revenues they need to resource the essential public services on which we all depend. I very much welcome the fact that Anguilla has joined the growing number of jurisdictions making good on their commitments to apply high standards of transparency and exchange of information in tax matters.”
HM Revenue and Customs Permanent Secretary for Tax, Dave Hartnett, added: “The information exchange provisions in this arrangement meet international standards and are especially welcome for that. HM Revenue & Customs is playing its part to help ensure that ultimately there will be no offshore financial centres that facilitate avoidance and evasion.”
In April, 2010, the OECD welcomed a late drive by three Caribbean territories including Anguilla to conclude multiple tax information exchange agreements (TIEAs) to gain a place on the list of territories that have substantially-implemented the internationally-agreed standard in transparency and tax information exchange.
Anguilla, which signed an agreement with Australia and Germany on March 19, had previously signed 11 other agreements – including agreements with the United Kingdom, Ireland, the Netherlands, New Zealand and the seven Nordic economies – and this signing brings their total to 13 agreements that meet the internationally agreed tax standard. Anguilla thus joined the OECD's 'white list'.
Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, said: "We continue to see a great deal of progress as jurisdictions move to sign agreements. With Anguilla, St. Kitts and Nevis and St. Vincent and the Grenadines now reaching this benchmark, almost all of the Caribbean jurisdictions have substantially implemented the standard, and we will be working with the remaining jurisdictions – both in the Caribbean and elsewhere – to encourage them to follow this trend and provide whatever assistance we can."
Since the inclusion on the OECD list, Anguilla has signed a further four agreements, namely with Belgium, Canada, France and Portugal.