The changing winds  The 1998 OECD report on Harmful Tax Practices sparked a series of changes and a flux in the international financial services industry that are yet to stop. The efforts of the FATF have caused a tightening of the regulatory standards world wide and led to several changes in legislation in many countries, whether involved directly in the industry or not. At present the ripples continue. The International Business Company (IBC) Mecca, The British Virgin Islands (BVI) is currently undergoing changes to its legislation to immobilize bearer shares and to require that a register of directors be maintained. In addition to this there is consideration of a higher charge for any company that has not altered its articles to prohibit bearer shares. More information on this can be found in the article by Nicholas John, Barrister at Law.

At the same time the prime agent for change, the OECD, has met with the committed jurisdictions, many of which are represented by the International Trade and Investment Organization (ITIO). The meeting took place in Ottawa on October 14-15. The focus of the meeting was on “how to achieve a global level playing field and how to improve further the process by which this initiative can be taken forward based on the widely accepted principles of equity and shared responsibility.” The OECD web site reports that “Participants acknowledged that progress had been made but recognised that a global level playing field does not yet exist and that further progress could and should be made to achieve it, so that all countries can reach the high standards which the participants wish to see achieved.” The winds have certainly changed as the insistence on a level playing field is creating more pressure for the OECD and its members than anticipated. It is the response by the OECD that will in large measure determine the effectiveness of the pressure brought to bear on the offshore centers and the changes that will flow therefrom.

St. Lucia’s IBC: Steady in Changing Times  - Nicholas John, Barrister-at-Law Now into its fourth year as an offshore center, St. Lucia is proving to the industry and the world that its model not only works, but is the new standard for an international financial center. Amidst the challenges of the Organisation for Economic Co-operation and Development (“the OECD”) and the Financial Action Task Force (“the FATF”), St. Lucia has not had to make any alterations to the laws governing international financial services. Having had in place at the outset, laws regulating all service providers, prohibiting money laundering, and providing a range of expected services, the FATF never had cause to blacklist the jurisdiction. More importantly are the features of the International Business Companies Act (“IBC”). At the time of passage of the law, St. Lucia choose the high ground and set standards for the IBC that were unheard of in the industry. The primary departure from the norm was that the law never permitted bearer shares. Such instruments made the determination of beneficial ownership impossible and were seen to be going against the grain of international regulatory standards. While other jurisdictions and some intermediaries commented negatively, the FATF, and many reputable intermediaries and professionals found this to be the standard that they wanted to see emerge. ...continued

Far East : A delegation from St. Lucia recently visited Singapore and Hong Kong. The trip showed that the image of the jurisdiction is very favourable and the awareness is increasing rapidly. New opportunities were found for mutual funds in St. Lucia and the jurisdiction is being viewed as a credible alternative to the BVI, especially in light of the present uncertainty caused by legislative changes. Another visit is planned for early next year.  STEP UK : A delegation representing the Registered Agents Association and Pinnacle St. Lucia will be attending the November meeting of STEP to be held in London. The President of the St. Lucia STEP branch and the Registered Agents Association will be there along with Anthony Bristol of Financial Centre Corporation, the private sector promoter.  ITPA : Scottsdale here we come! The ITPA American meeting will be held in Scottsdale, Arizona. Look out for team St. Lucia who are earning several ITPA frequent attendee points. Only thing is they are not sure what to do with them!  Transnational Taxation Network (TTN) :  The Executive Committee of the TTN has invited Anthony Bristol to be a speaker at their 3rd International Tax Planning Techniques Seminar to be held in Curacao, The Netherland Antilles from November 6-7. The focus of the presentation will be on the “Developments in IBC legislation and more specifically about St. Lucia as a jurisdiction”.

Strengthening the Regulatory Framework In keeping with St. Lucia’s trend of being at the forefront of sensible regulation, changes were made in September that streamlined the legislation dealing with money laundering and financial intelligence. The new Money Laundering Prevention Act (MLPA) 2003, repeals the MLPA 1999 and the FIA Act 2002 and provides for the creation of a Financial Intelligence Authority (FIA) as distinct from a Financial Intelligence Unit (FIU) which is the vehicle found in many offshore jurisdictions. The Authority comprises five persons appointed by the Attorney General, all of whom are qualified for the appointment and are of sound reputation. The Authority is supported by a secretariat, headed by the Director, a former senior Crown Counsel, who is the CEO. The Director is supported by a team of investigators trained with the assistance of the United States government. Reports filed by financial institutions and businesses of a financial nature, along with requests for assistance from foreign financial intelligence units are considered by the Authority as opposed to by an individual, as in many other jurisdictions. This is intended to ensure that injudicious incursions into individuals private affairs, resulting from pressure by foreign authorities, is minimised. The new Act adds to the list of prescribed offences “trafficking in persons”. A new second schedule clearly defines “business of a financial nature”.  The Savings Directive - an Alternate View: OECD member countries met with representatives of offshore financial centers during an October 14-15 meeting in Ottawa of the Global Forum on Taxation. The Center for Freedom and Prosperity has announced that "the OECD was forced to concede that many of its own member nations also were tax havens, and that persecuted jurisdictions on the OECD blacklist had no obligation to undermine their market-based laws unless all countries agreed to the same misguided policies (the famous "level playing field" requirement)." The trigger for the meeting was the EU's savings tax directive, but the European Commission does not in fact support the view that the EU's savings tax directive promotes an inequality in the treatment of offshore financial centers that are not members of the EU and that this inferentially creates a disadvantage to these centers. The primary objective of the directive is to ensure a minimum level of taxation on interest income paid in each Member State to individuals who are resident for tax purposes in another Member State. Secondly, the text proposes a flexible "coexistence model" to enable tax to be levied effectively. Each Member State must choose between levying a withholding tax or providing information to the other Member States regarding the interest paid to individuals resident there (the provision of such information is automatic and cannot be limited in scope nor subject to certain conditions). ...continued

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Your tropical paradise, exactly as you imagined it. Set on 8 acres of true beachfront property, Eastwinds Inn consists of 15 traditionally built single storey cottages and one mini-suite. Featuring some of the island's finest cuisine and a friendly, professional staff, the property is only 15 minutes from the city centre and offers all modern amenities in an idyllic setting. Hotel rates are all inclusive. Additional services include full wedding packages and island tours Whale and Dolphin Watching: Imagine for a moment the awesome sight of the world's largest mammals as they flip over just a few hundred yards from your boat. Or a shoal of playful dolphins moving in nature's well choreographed ballet as they swim in search of food. This is the opportunity afforded daily on the dolphin and whale watching tours operated by David and Chris Hackshaw. St. Lucia's waters are home to native species of Pilot, Sperm, and Humpback whales and the Bottle-nosed dolphin. Tours can be arranged with Sunlink Tours and at hotel tour desks. If you have any questions, comments or if you do not wish to be on our mailing list, please feel free to send them to enquiries@pinnaclestlucia.com The PDF version of Pinnacle News is available here: