Seychelles: Law of Offshore
Non-domestic banking in Seychelles is regulated by the Central Bank of Seychelles and is administered under the Financial Institutions Act 2004 (amended in 2008, 2009 and 2011) to cater for the offshore as well as the domestic banking. The Act makes provision for the licensing of offshore banks and incorporates the necessary flexibility to encourage growth in that sector. It also features full confidentiality with regards to information of its clients with the exception of criminal investigation cases. The following information details the Financial Institutions Act 1984 as amended in 1995, which was updated and replaced by the 2004 Act, retaining many of the 1984 Act's provisions.
Licences are issued by the Offshore Banking Department of the Central Bank and are granted only to companies incorporated under the Companies Act 1942 or foreign companies which have registered under the Companies Act. Licenses are issued for domestic banking, offshore banking, or both. When both are conducted, it must be through separate offices. Offshore banks are permitted to operate numbered accounts for their clients.
Applicants must supply extensive information to the Central Bank, including at least the following:
- the Memorandum and Articles of Association or Statutes;
- Head Office address and a list of shareholders (members);
- names of chief officers;
- the last three sets of financial accounts;
- a full business plan;
- an undertaking that funds will be provided to cover all obligations and liabilities incurred in the local office.
The Central Bank has 90 days to respond to an application, and does not have to give a reason for refusal. The refused applicant may appeal to the Minister and to the Court.
The Bank imposes various prudential requirements including the following:
- maintenance of unimpaired capital at a level agreed between the applicant and the Bank and in proportion to assets;
- maintenance of a reserve fund to which at least 10% of annual profits must be transferred until the fund equals the amount of paid-up or assigned capital;
- the average level of liquid assets must be maintained at the currently prescribed percentage of total liabilities.
The Bank requires monthly balance sheet submissions; accounts must be prepared and audited each year, and then published.
The Act contains extensive confidentiality provisions. For non-domestic banking business, disclosure is only permitted on order of the Court in response to an application by the Attorney-General.
The Bank has considerable powers of inspection and control over what it considers to be unsafe, unsound or unlawful practices.
The Anti-Money Laundering Act 2006 established a Financial Intelligence Unit (FIU) as a unit of the Central Bank, bringing the Seychelles' anti-money laundering regime more into line with international practices. The FIU has the authority to request information considered relevant to an offence under the Act, and from reporting entities, supervisory agencies and law enforcement agencies.
The FIU may enter into agreements with foreign states to facilitate the exchange of information to assist investigations into suspected cases of money laundering and terror financing.
The Anti-Money Laundering Act requires reporting entities to take "reasonable measures" to ascertain the purpose of any transaction in excess of SR100,000, or of SR50,000 in the case of cash transactions, and the origin and ultimate destination of the funds involved in the transactions.