GIIF: Appointment of new CEO

Steve Flynn having expressed his wish to focus his career in the area of corporate finance and at his request the Trustees have accepted his resignation with effect from 30 November 2011. Nikhil Treebhoohun has been appointed as replacement Chief Executive Officer with effect from 1 December 2011.

Nikhil Treebhoohun has extensive experience in export development and competitiveness issues gained from being Head of the Trade Section at the Commonwealth Secretariat, Director of the Export Processing Zones Development Authority and Executive Director of the National Productivity and Competitiveness Council in Mauritius.

He studied economics at the London School of Economics, Financial management at the University of New England, and Development Planning Techniques at the Institute of Social Studies. He was also a senior Fulbright Fellow at Georgetown University and is a Fellow of the World Academy of Productivity Science.

Nikhil Treebhoohun has 30 years professional experience of which 13 as chief executive of Intermediary Organisations (Export Processing Zones Development Authority and National Productivity and Competitiveness Council) involved in providing support for export development and productivity enhancement. From 2005 to 2011 he was the Head of the Trade Section of the Special Advisory Services Division of the Commonwealth Secretariat co-ordinating and managing international and county programmes to improve export competitiveness in the areas of professional services, tourism, trade facilitation, national and sector export strategies, and private sector development strategies. He was the project leader for a Commonwealth supported project in 2008 to develop a roadmap for the export of services, including global business services from Mauritius.

Bedell Cristin: Limited Partnerships Bill approved in Mauritius

The Limited Partnerships Bill 2011 was approved in Parliament on 19 October 2011 and is expected to receive the assent of the President of the Republic shortly. This new legislation was long awaited by professionals in the funds industry and it will attract significant interest for setting up new fund structures with a limited partnership ("LP") structure. This new vehicle will be useful in ensuring tax efficient and transparent fund structures.

A LP offers flexibility for the general partners in terms of capital and profit distributions and as regards the general administration of the LP structure. LPs are principally established for investment purposes and are a favoured structure for use in private equity and venture capital schemes, collective investment schemes, structuring joint ventures, holding property interests, estate planning, asset protection and tax and financial planning. General Partners have the ability to manage operations from locations other than Mauritius.

A Mauritian LP vehicle may hold a category 1 global business licence issued by the Financial Services Commission ("FSC") and can be structured to benefit from the network of double taxation avoidance agreements which Mauritius has with 36 countries. The LP may seek authorisation from the FSC to operate as a Collective Investment Scheme under the Securities Act 2005 and the Securities (Collective Investment Schemes and Closed-End Funds) Regulations 2008. Other regulatory consents may be required depending on the type of activities the LP will be undertaking.

Every general partner and limited partner of a LP structure holding a category 1 global business licence under the Financial Services Act 2007 will be liable to income tax in respect of its share of income in that LP. However, a Mauritian LP may hold a global business licence and may elect to be taxed in Mauritius and thus take advantage of the Mauritius tax treaty benefits.

A LP vehicle can be registered with or without legal personality with the Registrar of Limited Partnerships who is also the Registrar of Companies in Mauritius.

The name of a LP must end with the words "Limited Partnership", the abbreviation "L.P." or with the designation "LP". The LP must have a registered office in Mauritius which may, but need not, be its principal place of business and it is not mandatory to have a Mauritian general partner. However, a LP without a Mauritian general partner must at all times have a registered agent in Mauritius.

A limited partner may not participate in the business of the LP and the legislation sets out a non-exhaustive list of activities where the limited partner will not be considered as participating in the management of the LP.

Access to the records of the LP on the Register of Limited Partnerships may only be given to an officer as defined in the legislation, the management company appointed by the LP or its registered agent where that LP holds a global business licence. However, any person may request the Registrar of Companies to provide the name of the LP and its registered office and the name and address of any management company or registered agent appointed by the LP as the case may be.

A general partner may also be a limited partner at the same time in the same LP.

The legislation allows flexibility as to the form of limited partners’ contributions which may be made in or by money, loan, property and services.

The situations where a LP may be dissolved are listed in the legislation and the court has an overriding power to order the dissolution of the limited partnership on the application of any partner, creditor or the Registrar. Upon dissolution, the affairs of the LP are wound up by the general partners unless a liquidator has been appointed. The law sets out a priority order under which the assets of the LP are distributed upon its dissolution.

Tackle Tax Havens

Tax havens are a major part of the tax evasion problem – and these new findings come as the Tax Justice Network launches Tackle Tax Havens, a new campaign aimed at the general public that highlights the critical role that these secretive states play in corrupting the global economy.

The issue of tax collection is rising fast up the political and social agenda, as countries across the world make deep cuts in public spending and increase taxes in ways that hurt the poor and the middle classes the most.

This new research demonstrates how important it is to tackle tax evasion and the tax havens that help wealthy individuals and organisations escape from contributing to the services that directly benefit them - from the health and education systems that support their workforces, to the roads that ship their goods to markets, to the courts of law that enforce their contracts or to the police who protect their property.

But tax havens are not just about tax: they cause colossal damage on many fronts. Tackle Tax Havens aims to arm the general public with a solid working knowledge of the offshore system and the problems it causes -- and to show what we can do about it.

Other key findings of the new report include:

• Europe as a whole loses the equivalent of 87% of its total healthcare budget to tax evasion, while Africa loses 98% and South America 139%
• Over the 145 countries surveyed, an unweighted average of 110% of the annual healthcare budget was lost to tax evasion
• 119 of the 145 countries surveyed are losing over half of their healthcare budget to tax evasion
• In 67 countries, tax evasion losses are larger than their entire health budgets
• In Bolivia, tax evasion is more than four times as large as that oil rich country's health spending. In Russia, it is more than three times the size

• More than $1 in every $6 earned in the world is not subject to tax because those earning it have deliberately ensured that their income is hidden from the world’s tax authorities

• In Greece and Italy, where economic collapse currently looks possible, more than €1 in €4 is hidden in the shadow economy

QUOTES:

John Christensen, Director of the Tax Justice Network:

“Tackling tax havens is a crucial part of ending the culture of tax evasion. Tax evasion is crippling public finances across the world but governments aren’t doing nearly enough to end this cancer.”

“Tax havens are engaged in economic warfare against the tax regimes of sovereign countries, and these estimates reveal the human cost in terms of the impact on health services.”

Richard Murphy of Tax Research UK, who undertook the research for the Tax Justice Network:

“New data from the World Bank published last year on the size of countries’ shadow economies let us prepare this estimate of tax lost to criminal tax evasion annually. The findings add a new policy agenda to public debate on the world’s financial crisis. For example, Italy loses €183 billion to tax evasion a year. Its current debt of €1.9 trillion represents just over 10 years tax of tax evasion on this basis. If only more had been done to tackle rampant tax evasion, Europe would not be facing a crisis today.”

“Tax havens can be beaten using three simple measures. First we demand that all tax havens put details of the ownership of all companies and trusts located there, and the accounts of those organisations, on public record. Second we demand that all multinational companies publish accounts that reveal their use of tax havens. Last, we believe that all tax havens should be required to exchange information each year on the income recorded within them belonging to the citizens of other countries with the places where those people really live.”



“These measures would shatter the secrecy of tax havens for good, and that means those committing tax crimes will no longer have places to hide the proceeds of their crimes. Nothing could make a bigger contribution than this to solving the world’s financial crisis right now.”

Click here to see the report

STEP establishes Private Banking & Wealth Management Group to demystify private wealth to government

STEP – The Society of Trust and Estate Practitioners - has established a Private Banking & Wealth Management Group to discuss how best to demystify the private wealth sector and explain its benefits to policymakers in government. The working group has the support of advisory firms and private banks keen to ensure that the value of private wealth is better understood in Westminster circles.

David Harvey, Chief Executive of STEP, said “The private wealth sector needs to have a united voice with government, and one which encourages growth for everyone’s benefit. It is vital that the government understands our sector brings with it a significant number of jobs, inward investment and tax revenues.

These discussions will thrash out how advisors, private banks and wealth managers can collectively improve the reputation of the private wealth sector and best represent the private client. This will build on STEP’s policy successes in recent years, and focus on assisting the government with tax, regulatory and competitiveness issues.”

The Private Banking & Wealth Management Group will discuss how to dovetail with the existing policy work STEP undertakes in a mutually beneficial partnership. The aim is to bring together the various corporations and institutions active in private wealth management to create a single voice to governments and other interlocutors on policy issues and a provide a more powerful footprint.

The partnership is a logical move for STEP, given the strong business links between advisors, private banks and wealth managers, and STEP’s substantial policy experience. The group is seeking members around the world, and has been spurred-on by the ever more demanding policy environment, including initiatives affecting the market and private clients such as FATCA and the RDR in the UK.

STEP already engages widely with policymakers in the UK, EU and the OECD, and a recent World Bank report encouraged policymakers to seek active partnership with STEP in order to ”help to ‘demystify’ the services and products” of the private wealth sector. STEP will also be representing its members at the global anti-money laundering summit hosted by the Financial Action Task Force (FATF) in Milan on 5-6 December, where they will be discussing issues around collecting information on beneficial owners.

Mauritius seeks data protection accreditation with European Union

A Workshop on Mauritius Data Protection Accreditation with the European Union was held today at La Petite Canelle, Domaine Les Pailles in the presence of the Minister of Information and Communication Technology, Mr T. Pillay Chedumbrum, the Attorney General, Mr Y. Varma, the Ambassador of the European Union, Mr A. Mariani, and the Data Protection Commissioner, Mrs D. Madhub. The workshop was organised by the Data Protection Office, Prime Minister’s Office, in collaboration with the Delegation of the European Union to Mauritius.

Mauritius is presently seeking accreditation with the European Commission for Mauritius to be known as an “adequate country”. The endeavour will enable the country to gain recognition in the field of data protection and step up trading relations with international partners in off-shore investment services and business process outsourcing. The appropriate legislation will also promote e-government and e-commerce in Mauritius as the availability of legal protection of personal data will encourage consumers and businesses to transact online. The initiative is in line with Government’s vision to make Mauritius a regional knowledge hub and a strategic ICT destination.

To that effect, the local ICT and Data Protection legal and regulatory framework as well as licensing and regulation standards have to be reviewed and revised in line with international best practices and changes resulting from technological convergence for modern competitive ICT markets as well as in compliance with the European Union directives for data protection. An EU Consultant is currently in Mauritius to advise on the review of the ICT legislation and drafting amendments and recommendations to ensure the legislation is up to international standards.

The objective of the workshop held this morning was to enable stakeholders to express their concerns, views and proposals to the consultant on the current legal framework for data protection in Mauritius for its compliance with EU standards.

In her speech for the occasion, the Data Protection Commissioner stated that Government has the duty to regulate cyberspace. Mrs Madhub highlighted the importance of building a data protection regime fitted to our new age, adding that the focus should be on those requirements which will really enhance legal certainty. ‘Our aim should be to preserve freedom of information and data flows to create a level playing field for businesses when it comes to data protection obligations and protect the personal data of individuals’ she said.

For his part, the Attorney General said that the Law reform Commission in its last report concluded that there was a need to review the constitutional right to privacy in our constitution in order to include data protection as one of the essential components of the rights to privacy. According to Mr Varma, the Data protection rights should be built on three pillars namely the right of individual to be forgotten, transparency and greater clarity as well as privacy by default.

The Minister of Information and Communication Technology said while our society is ever more dependent on continuous and widespread use of ICT, the right to the protection of personal data is now explicitly recognised internationally as a human right. He added that the key focus of the current review of the Data Protection Act is to modernise our data protection law in order to face growing challenges of new information technologies and globalisation.

FSA appoints Sir Nicholas Montagu as chairman of the Financial Ombudsman Service

The Financial Services Authority (FSA) has today announced the appointment of Sir Nicholas Montagu KCB as the new chairman of the Financial Ombudsman Service (FOS). The service settles complaints between consumers and businesses providing financial services.

Sir Nicholas is currently the chairman of the Aviva UK Life With-Profits Committee, a director of the Pension Corporation and is a former chairman of the Board of Inland Revenue.

Lord Turner, FSA chairman said:

“Nick has had a distinguished career and brings a wealth of experience in demanding board positions. His predecessor, Sir Christopher Kelly, steered the Ombudsman Service through challenging periods, and the next few years will be no easier. This role needs a customer-service champion to help shape the Ombudsman's future role in the new regulatory structure, and that is what we have with Nick.”

Sir Nicholas Montagu said:

“I am delighted to have been appointed chairman of the Financial Ombudsman Service. It is a strong and innovative organisation, which over the last ten years has been recognised for the increasingly significant role it plays. I look forward to working with Natalie Ceeney and her colleagues as we meet the challenge of providing an ever-improving service, with customer demand set to reach record levels.”

Economic Partnership Agreement: Next round of negotiations in Mauritius

Mauritius will host the next round of negotiations on the Economic Partnership Agreement (EPA) between the Eastern and Southern African Group (ESA) and the European Union (EU) from 28 to 30 November 2011.

The negotiations will be preceded by the Technical Meeting on Rules of Origin scheduled for 24-25 November, and the Technical Meeting on all clusters, that is, development, trade in goods, services, agriculture, dispute avoidance and trade-related issues, on 26-27 November.

Around 40 delegates from the ESA region and the EU will be in attendance. The participating ESA countries include Comoros, Ethiopia, Madagascar, Malawi, Seychelles, Sudan, Zambia and Zimbabwe.

The Mauritian delegation will be led Mr S. Boodhoo, Deputy Director, International Trade Division, Ministry of Foreign Affairs, Regional Integration and International Trade, while Mr J. Wunenburger, Head of Unit on Economic Partnership Agreements, will lead the EU’s delegation.

A joint EPA draft text containing proposals by the EU and the ESA group will constitute the basis for the negotiations. It is expected that the Mauritius meeting will close gaps on many issues such as agriculture, trade facilitation, competition policy while making progress in other issues including services and investment.

It is recalled that an Interim EPA was signed in Mauritius in August 2009 covering trade in goods, development cooperation and fisheries. The Interim EPA was crucial to safeguard Mauritius’ preferential access on the European market in traditional sectors such as sugar, textiles and fish and fish products in the light of the expiry of the World Trade Organisation’s waiver for the Cotonou Trade Provisions in December 2007.

Negotiations are now being pursued to conclude a full EPA which will encompass other areas, including trade in services and trade-related issues such as investment, competition policy and trade facilitation.

Jersey listing capabilities for Chinese and Indian firms highlighted at Paris conference

The advantages of using Jersey listing vehicles as part of raising capital in Western markets will be promoted to top-level Chinese and Indian business professionals at a conference in Paris this week.

Jersey Finance are sponsors of the prestigious International Capital Conference 2011 and will be hosting a roundtable session entitled ‘Jersey for listings – an essential guide.’ David Myatt, Country Head of BNP Paribas for the Channel Islands and Isle of Man will moderate the session and he will be joined by Raulin Amy, Partner at Ogier, Nick Harriss, Director of Corporate Finance at Allenby Capital, London and Zhaoan Li, Jersey Finance’s Head of Greater China Business Development. Mr Amy is also participating in a panel debate entitled ‘IPOs for Emerging Economy Companies’ that will set the scene for the JFL roundtable.

The conference, which has attracted over 300 delegates, is organised by the Boao Forum for Asia in association with the Federation of Indian Chambers of Commerce and Industry (FICCI) and Cavendish Group and is hosted by the Ministry of Economy, Finance and Industry in France. It has been described as ‘the premier business event for western companies looking to do business with ambitious Chinese and Indian companies.’

As well as senior figures from the Chinese Government, industry and finance, this year for the first time the organisers will welcome 30 Indian chief executives led by FICCI.

Geoff Cook commented: ‘One of the features of the finance activity in Jersey in recent years has been the increasing use of our jurisdiction to incorporate listing vehicles. In the 12 months to June this year for example, Jersey companies that floated on the London Stock Exchange and AIM raised £8 billion, which was over half of all new capital raised on London markets during that time.’

‘A proportion of the interest in Initial Public Offerings (IPOs) on the London markets is from the high growth economies, including China and India, and this conference provides us with an ideal platform to inform practitioners about Jersey’s strengths and capabilities as a jurisdiction for listings.’

Mauritius: Financial Services (Consolidated Licensing and Fees) (Amendment) Rules 2011

FSC Rules made by the Financial Services Commission under Section 93 of the Financial Services Act 2007

Corporate and Trust Service Provider
Code	Licence/Approval	Relevant Section of FSA 2007	Processing Fee (US$)	Annual Fee (US$)
FS-3.1A	Management Licence	S77	500	5,000
FS-3.1B	Management Licence (Qualified / Corporate Trustee only)	S77	500	5,000
Global Business Licence
F.S-4.1	Category 1 Global Business Licence	S72	500	1,750
F.S-4.2	Category 2 Global Business Licence	S72	100	235*

* This amount excludes the annual registration fee of $65, or such other fee as the Registrar of Companies may determine, payable to the Registrar of Companies.

First Annual Licence Fee
Months in which application is made	GBC 1 (US$)	GBC 2 (US$)	Nominee (US$)	Management Licence (US$)
July - September	1,750	235	350	5,000
October – December	1,315	175	265	3,750
January – March	875	120	175	2,500
April - June	440	60	90	1,250

Charges

Description	Fees and Charges Payable for US$
If Annual fee paid on	GBC 1	GBC 2
Due Date	1,750	235
Within 1 month after due date	1,925	260
After 1 month, but within 3 months after due date	2,190	300
After 3 months, but within 6 months after due date	2,625	350
After 6 months, but within 12 months after due date	3,500	470

These Rules shall come into operation on 01 January 2012.

Made by the Financial Services Commission on 21 November 2011.

UK: Independent study on general anti-avoidance rule published

Graham Aaronson QC has today set out his recommendation to the Government for the introduction to the UK tax system of a narrowly focused general anti-abuse rule (GAAR).

The recommendation is published in the final report of Mr Aaronson’s eleven month review of the feasibility for the UK tax system of a GAAR. With the advice of a committee of tax experts, he has concluded that introducing a narrowly-focused GAAR would:

• deter abusive tax avoidance schemes;
• contribute to providing a more level playing field for business;
• reduce legal uncertainty around tax avoidance schemes;
• help build trust between taxpayers and Her Majesty’s Revenue and Customs (HMRC); and
• offer opportunities to simplify the tax system.

However, it warns against the introduction of a broad spectrum general anti-avoidance rule.

The report recommends that a GAAR should initially apply to the main direct taxes – income tax, capital gains tax, corporation tax, and petroleum revenue tax, as well as national insurance contributions. It sets out in detail how a GAAR could be introduced, and includes an illustrative draft rule. It also includes a summary of the views of representative bodies in the tax sector.

Speaking in response to the publication of the review’s recommendations, David Gauke, Exchequer Secretary to the Treasury, said:

“The Government is committed to tackling tax avoidance. We asked Graham Aaronson to consider whether a UK GAAR could deter and counter tax avoidance, while providing certainty, retaining a tax regime that is attractive to businesses, and minimising costs for businesses and HMRC. We welcome the completion of his study and will carefully consider its recommendations against these criteria, alongside the feedback from businesses and tax professionals that we look forward to receiving.”

Publishing the report, Graham Aaronson QC said:

“Responsible tax planning is an essential feature in a complex tax regime, such as the UK’s. But artificial and abusive tax avoidance schemes are widely regarded as an intolerable assault on the integrity of the tax regime. A general anti-abuse rule narrowly targeted to deter such schemes, while not affecting responsible tax planning, should lead to a fairer, more principled and ultimately simpler tax system; and I strongly recommend that such a rule should be introduced into our tax laws.”

The Government will consider the report in detail and the extent to which the proposals could add to HMRC’s existing legislative and administrative approaches and further reduce levels of tax avoidance. The Government will discuss the implications of the proposed rule with business and tax practitioners and respond fully at Budget 2012, setting out its plans for further, formal public consultation, if appropriate.

Download report

Latest EU report on Funds Directive is positive for Jersey

Jersey Finance says it is encouraged by the contents of the European Securities and Markets Authority (ESMA) report on the Alternative Investment Fund Managers Directive (AIFMD) which was published last week and contains its final recommendations to the European Commission.

There has been a change in the wording between the earlier draft and the final report in one important aspect in respect of ‘third countries’, the term used to describe jurisdictions outside of the EU. Though the regulatory standards remain high and robust, the change is positive for ‘third countries’ since it makes it less onerous to achieve compliance. The Directive will require supervisory co-operation and exchange of information agreements between the authorities of EU member states and non EU countries.

Heather Bestwick, Technical Director of Jersey Finance, comments:

‘It is broadly positive throughout and Jersey remains on track to meet the criteria necessary for the funds industry to continue to participate when the new EU regime for funds is implemented. We are studying the detail but our first impressions are that there is nothing new in ESMA’s final report to give us concern.

‘Naturally there is still considerable work to do but it remains our intention to offer investors an ‘opt in’ AIFMD compliant regime while retaining flexibility for managers whose primary source of institutional capital is outside of Europe.’

EMSA’s latest document is the final technical recommendations to the European Commission who are expected to prepare the implementing measures on the basis of the report’s advice.

Seychelles: Technological Innovation Changes Driving Financial Services

Central Bank Anniversary Lecture

“Technological Innovation Changes Driving Financial Services”

Opening Address by President James A Michel

18 November 2011

Governor of the Central Bank,

Mr. Arun Jain, Chairman and CEO of Polaris Software Lab,

Your Excellencies,

Distinguished guests,

Ladies and Gentlemen,

The theme, “Technological Innovation driving Financial Services”, chosen by the Central Bank to mark its seventeenth anniversary is both timely and opportune. Like many of you I have followed with much interest the fascinating innovations that have occurred over the years in the development of financial services, as a result of technological advances.

Our economy has made tremendous progress in recent times despite or, perhaps, because of, the enormous challenges that we have faced. My Government and the Central Bank have made significant strides to improve the regulatory framework in which financial institutions operate. We will continue to ensure that our institutional and legal frameworks remain up to date with the financial innovations.

I have no doubt that all of you present here today share my appreciation of how important the financial sector is to our economy. In Seychelles this sector directly contributes 4.2 per cent to Gross Domestic Product. This makes it one of the key sectors of the economy after tourism and fisheries. The sector today employs over 1,100 persons, that is, 2.4 per cent of Seychelles’ workforce. Tax revenue from the sector in 2010 amounted to R137 million, which was 17 per cent of total tax revenue. These are not insignificant.

Ladies and gentlemen, in this day and age everything revolves around technological innovations. Failure by any business or market player to appreciate this fact is at their own peril. We have all witnessed, time after time, how long-established, reputable businesses have been left behind or failed by virtue of being too slow to grasp the benefits of financial innovation. Fully aware of this, a number of recent ventures and enterprises in Seychelles have shown acumen by better adapting to technological advances.

I applaud the efforts of our public institutions which have grasped technological changes, and which have already brought about significant improvements in the delivery of their services. On the occasion of its anniversary lecture, I take the opportunity to congratulate the Central Bank for being one of our institutions that has adopted technological advances to its benefit. The recent investment of the CBS in its integrated CORE banking platform was a major breakthrough for the Bank. This solution has allowed the Bank to, among other things, increase the volume of transactions it processes, reduce risks associated with a multitude of computer software, minimize security risks, provide real-time balances to Government and commercial banks, and enable “straight-through” processing. I also note with encouragement the various forthcoming projects envisaged by the Bank, including very shortly, its initiative for the automation of cheque clearing, which will mean that the exchange of paper cheques between banks for the settlement of personal and business transactions will soon be a thing of the past.

Today, I also want to recognize the significant contribution that financial institutions, in particular commercial banks, have made and continue to make to our economy. However, when it comes to innovation I cannot say that I am satisfied with what the institutions are offering to their clients. For instance, today not one single bank in Seychelles offers full Internet banking services to their clients! This is unacceptable in this day and age. I am encouraged, however, that some of our banks have indicated that this will be forthcoming. I hope that this will happen sooner rather than later.

I want to take this opportunity to appeal to our financial institutions, especially the commercial banks to do more to help our economy. We, as a nation, are becoming more sophisticated by the day, and the level of services that banks provide is, frankly, not up to expectations. When we ask foreign investors to come to our shores we want quality investors, but they will turn their backs on us if the quality of services that our banks provide are not up to standard. With technological advances the tools are there to improve the quality of services. But having said that nothing can replace the human touch. This is why, as much as we want to promote technology in banking services, banks need to keep investing in their human capital.

Ladies and gentlemen, technological innovation presents us with many challenges but also with exciting and rewarding opportunities. Let us make the most of the great opportunities at hand. They will be significantly enhanced when Seychelles’ submarine cable becomes operational next year. It will provide a major boost to our country’s endeavour to improve our communications capability. The submarine cable will bring Seychelles so much closer to financial innovations through a significant increase in Internet access and speed and higher volumes of e-commerce at substantially reduced costs. This project required significant resources both from Government and the private sector. It exemplifies the type of public-private partnership that is the hallmark of the New Seychelles. Like you all, I look forward eagerly to the completion of this project, and the benefits that it will bring to our country.

Ladies and gentlemen, as we focus on the subject of technological change and how it is driving financial innovation, the world financial system is in turmoil. As many countries, large and small, struggle to cope with the painful effects of this crisis, Seychelles, despite many challenges, remains resilient and continues to cope remarkably well. We have shown that having the right policies and right economic base firmly in place are the most effective tools in facing the harsh reality of such crises. I believe that, similarly, those businesses which invest wisely in technology and in human capital will be better placed to face the challenges of competition, market access, service delivery, sourcing etc. and will stand to gain most through financial innovation.

I cannot conclude without reiterating my wish for commercial banks to do more to develop our economy through provision of more credit, especially to small and medium-size enterprises. We have a duty to empower our people. We have a duty to help them better their situation, to do business, expand and create more wealth, more opportunities… But they cannot do so without access to affordable credit. Credit remains one of the fundamental drivers of economic growth. Banks can and must reduce interest rates further. Bank spreads today are higher than they were before we implemented our economic reforms three years ago, one of the only few black spots when we look at our overall performance during that period. So I urge banks, once again, to go back to the drawing board and contribute more to our economy through more affordable lending rates. At the same time let us do more to encourage the savings culture through more attractive savings rates.

Ladies and gentlemen, technological innovation is one of the best things that happened to mankind, and we have to make the most of it. We are part of the process. We have to own it and drive it. We have to be forward-looking – a nation on the march to progress. We cannot afford to be complacent – we have to accept and adopt innovation. It is the key to our survival and progress as a nation.

I thank you and wish you fruitful deliberations.

Jersey FSC Consultation on Changes to Customer Due Diligence Measures

Today, the Jersey Financial Services Commission (the “Commission”) has issued a Consultation Paper on proposals to amend some specific provisions in the Money Laundering (Jersey) Order 2008 (the “Money Laundering Order”) and AML/CFT Handbook for regulated financial services business (the “AML/CFT Handbook”) that deal with customer due diligence measures.

The Paper has been published ahead of a wider review of the basis for, and scope of, customer due diligence concessions in the Money Laundering Order that will take account of the imminent revision to international standards set by the Financial Action Task Force.

Amongst other things, proposals in the Paper will:

• Clarify the additional customer due diligence measures that must be taken when a relationship with a customer is established remotely - where the customer is not seen - and money laundering and terrorist financing risk is considered to be higher than the norm.
• Provide additional guidance on identifying countries which may be considered to present a higher risk of money laundering or terrorist financing.
• Specify some additional due diligence measures to be applied where a customer has a connection to Iran or North Korea, and where a customer is considered to present a higher risk as a result of a connection to Bolivia, Burma (Myanmar) Cuba, Ethiopia, Kenya, Nigeria, São Tomé & Príncipe, Sri Lanka, Syria and Turkey.
• Extend the circumstances in which it may be appropriate to simplify customer due diligence measures because the risk of money laundering or terrorist financing occurring is considered to be less for a particular customer, product or service.

Sanlam buys stake in Summit Trust Geneva

Summit Trust International SA, a leading international trust group based in Geneva with subsidiaries in England, New Zealand and Cayman Islands, has sold a 65% interest in the company to Sanlam, the South African insurance group.

Summit Trust was originally incorporated in September 1999 as Close Trustees (Switzerland) SA when it was formed as a joint venture company between Close Brothers Group plc and the Geneva management team. The company changed its name to Summit Trust International when management bought out the remaining minority interest from Close Brothers Group earlier this year.

Sanlam Limited is a leading financial services group in South Africa listed on the Johannesburg Stock Exchange, with a market capital of €6 billion. In their over 90 years of existence Sanlam has shown themselves to be an innovator and leader in many aspects of financial services in South Africa. Over the last couple of years the group has also set up operations in Africa, Europe, India, Australia and the USA. Summit Trust International will become part of Sanlam Private Investments, the wealth management and private client business within the Sanlam Group, which currently operates in South Africa, the UK and Australia.

Daniël Kriel, CEO of SPI, says Summit was identified as an appropriate acquisition after an extensive search for the right partner to offer SPI clients offshore fiduciary services. “Summit Trust is an exceptional, owner-managed business with a reputation for excellence and a solid client base. Effective 1 November, this acquisition provides a critical building block in our total wealth management offering, a shortcoming until now.”

Kriel says he is excited about the increased opportunities Summit opens up for SPI’s clients. “The fiduciary and tax needs of high net worth individuals and their families are increasingly complex; we are confident the additional resources this business brings in terms of offshore capability will be of enormous relevance and advantage to our clients. Our expanded global wealth management proposition will serve our South African client base, and SPI clients in the UK and Australia.”

Daniel Martineau, Executive Chairman of Summit Trust International Group says he believes this to be a very exciting opportunity that has come at the right time for them and their international client base. “The management team who will retain a 35% stake in the business, is committed to the business in the longer term and will be looking for opportunities to sensibly expand our services and footprint into other jurisdictions. We are also looking forward to offering our well established services to SPI’s client base.”

KPMG - IFRS for investment funds: Presentation and measurement of financial assets carried at fair value

This issue covers the presentation and measurement of financial assets carried at fair value.

India: AAR orders capital gains exemption for Ardex Investment

The Authority for Advance Rulings (AAR) in the case of Ardex Investments Mauritius Ltd. (the applicant) held that capital gains on the proposed sale of shares of an Indian company to the foreign company is not chargeable to tax in India in view of Article 13(4) of the India-Mauritius tax treaty.

Mauritius - Budget 2012 Highlights: Boosting investment & growth & stimulating financial services

To provide leadership in investment and job creation against a background of crisis, the 2012 Budget provides for the setting up of a Resilience Plan for the next three years. It will cover all enterprises with focus on SMEs, infrastructure development and job creation. The main strategies of the Resilience Plan are:

• Supporting Enterprises at the Microeconomic Level. This will involve the creation of a National Resilience Fund (NRF) of Rs 7.3 billion that will be used both as a contingency fund to strengthen the resilience of the economy and as a rainy day fund to shore up public finances.
• More Government Spending on Infrastructure. Some Rs 21.2 billion will be injected in the economy for key infrastructure projects and as a lever to increase investment, employment and growth during the crisis.
• Financial System Stability. Measures will be based on IMF recommendations on how to ensure a well-coordinated watch on the stability of our financial system.
• Coherent Macroeconomic Response. It aims at implementing mechanisms to ensure coherence in fiscal and monetary policies.

Tax reforms

The 2012 Budget also makes provision for reforms in tax policies in order to promote investment. These changes include:

• The abolition of the solidarity tax on dividends and interest.
• The abolition of the capital gains tax on immovable property.
• The abolition of the municipal tenant’s tax. Government will disburse some Rs 175 million rupees per year to the municipalities as compensation for the revenue foregone.
• The removal of land transfer tax on the sale of immovable property by financial institutions relating to debt recovery.
• The environment protection fee to be levied only on hotels, guest houses and tourist residences that obtain profits.
• The tax holiday of Freeport operators to be carried forward indefinitely.

Financial services

In a bid to stimulate the sector, the 2012 Budget proposes strong support to the financial services industry to weave new business links with the rest of the world, comply fully with international norms and diversify its products. To this end, a legal framework to promote Foundations, Private Occupational Pensions and new concepts of Trusts will be set out. These aim at significantly widening the spectrum of financial vehicles in our jurisdiction.

Seychelles committed to applying OECD rules but asks for fairness in international taxation regulations

The following is a statement issued yesterday by the Minister for Foreign Affairs, Jean-Paul Adam:

“Following the recent move by the G20 to publish a list of suspected tax havens, among which Seychelles is named, the government of Seychelles wishes to re-iterate its unwavering commitment and engagement to implementing internationally agreed tax standards within local legislation.

“The government has been steadfast in its ongoing cooperation with the Organisation for Economic Co-operation and development (OECD) and while there are outstanding legislations to implement, this delay should in no way be construed as a lack of political will.

This delay has instead been due to the fact that Seychelles has had two national elections in 2011 and as such the National Assembly has had to contend with numerous interruptions.

“Throughout this entire process, the OECD has been kept fully abreast of the situation with full transparency, and as such the government feels that to be blindly condemned by the G20 is detrimental to the process.

“The government feels that the recent listing of countries deemed non-compliant only succeeds in diverting attention away from the larger issues; in order to achieve true fairness in taxation, it is imperative that the too often ignored fact that the majority of tax evasion is actually committed within OECD countries.

“It is easier to say that small jurisdictions must improve their legislation to be more compliant, something most are striving hard to do, but what is much harder to say is that there are a large number of influential companies already exploiting existing loopholes within OECD jurisdiction that need to be tackled.

“Small Island Developing States are faced with numerous well-known capacity challenges and constraints and we hope that the G20 will be more constructive in its reflections in the future. Despite the G20’s unequal approach, the government does in fact welcome more regulation on international taxation regimes when done in a fair and consistent manner.”

Worldwide tax reforms continue to encourage a return to growth and sustained revenuues

Governments continue to reform their tax systems, according to a new report by the World Bank, IFC, and PwC. In all, 123 out of 183 economies measured have made significant regulatory changes since 2006 to ease tax burdens for small and medium-sized firms, as governments seek to increase business registrations and relieve the impact of the global economic downturn.

Launched today, Paying Taxes 2012 finds that 33 economies made it easier and less costly to pay taxes from June 2010 through May 2011. The most common tax reform was the increased use of online systems to facilitate tax compliance, introduced in 23 economies. Electronic filing and payment reduces the amount of paperwork, allows a more targeted and risk based approach to audit and compliance, and can help eliminate corruption.

Paying Taxes 2012 measures all mandatory taxes and contributions that a medium-sized firm must pay in a given year. Taxes and contributions measured include the profit or corporate income tax, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and other small taxes or fees.

The report found that the Total Tax Rate for small and medium-sized companies has fallen by 8.5 percentage points since 2006, more than one point per year. During that period, the time it takes to comply with business taxes declined by more than a day a year (54 hours), and the number of payments required dropped by five.

"The high number of reforms in tax administration shows that improving the tax system for businesses is high on the agenda for governments,” said Augusto Lopez Claros, Director, Global Indicators and Analysis, World Bank Group. “If they create a system that is easy to comply with, it is more likely that businesses will operate in the formal economy and provide a more sustainable source of revenue than debt or aid."

Globally, the average Total Tax Rate for a small to medium-sized company is now 44.8 percent of its commercial profit. Complying with tax regulations takes an average of 28.5 payments and a total of 277 hours.

"Governments have it in their control to develop tax systems that foster business investment and make the private sector an engine for a return to economic growth and prosperity," said Andrew Packman, a tax partner at PwC UK. "Reducing rates and making the compliance less burdensome helps companies focus on making their business grow.”

HSBCnet Mobile: Banking in the palm of your hand

Log on to www.hsbcnet.com/mobile from your supported mobile device

HSBC are pleased to introduce HSBCnet Mobile, a convenient new way to access a select set of HSBCnet services using your supported mobile device.

The streamlined interface has been specifically designed for use on certain mobile devices. Currently available as a complimentary value-added service, you can access HSBCnet Mobile using your device’s web browser – no applications or downloads are required.

Three features are available on HSBCnet Mobile in line with your entitlements:

• Checking account balances and statements
• Authorising payment instructions (Priority Payments, Inter-Account Transfers and ACH Credits/Debits only)
• Receive notification of payments requiring authorisation via My Alerts

Please note: a Security Device is required to access HSBCnet Mobile. HSBCnet Mobile is not available to Smart Card users. HSBCnet is currently in the process of upgrading Security Devices for our customers. If you have already been contacted to upgrade your Security Device, we encourage you to do so immediately in order to use HSBCnet Mobile. For more information, please review the resources in the Information Centre, available after logging on to the main HSBCnet site.

HSBCnet Mobile: supported devices
Device type	Operating system
Android	Android 2.2 and 2.3
iPhone	iOS 3 and iOS 4
BlackBerry	OS 5.0 and 6.0

About HSBCnet Mobile supported devices

HSBCnet has verified the compatibility of these mobile devices and operating systems for use with HSBCnet Mobile. Please note that HSBCnet functionality may perform normally using other operating systems, but compatibility cannot be confirmed at this time.

HSBCnet Mobile will support additional mobile devices in the future. For more information about your device, please refer to your user manual or contact the manufacturer for assistance.

Try HSBCnet Mobile for yourself today via your mobile device atwww.hsbcnet.com/mobile. For more information about how to use HSBCnet Mobile, refer to the training presentation or contact your HSBC representative. Once you have tried HSBCnet Mobile, please let us know what you think using our online survey. Your feedback is very important as we continue to improve the service and add additional features. These resources are also available after logging on to HSBCnet. ***Please note: These links will open in a separate window.

Maintaining a secure HSBCnet Mobile experience

As with the main HSBCnet site, HSBCnet Mobile has incorporated several key security measures to help protect your information:

• Security Device: Your Security Device is required to log on to your HSBCnet profile and for any subsequent transaction authorisations.
• Encryption: HSBCnet Mobile is encrypted using Secure Socket Layer (SSL) Encryption technology (SSL v3 – 128 bit).
• Session time-out: Similar to using HSBCnet from a computer, if you forget to log out, or your mobile device remains inactive for a period of time, HSBCnet Mobile will log out automatically.

In addition to your obligation to comply with the general HSBCnet Security Procedures, you must ensure you also comply with the additional security requirements* which are in relation to HSBCnet Mobile on your mobile device, and include:

• Do not store your HSBCnet user or profile details on your mobile device.
• Ensure your mobile device is updated with the latest anti-virus and anti-spyware software.
• Avoid sharing your mobile device with others.
• Avoid using other mobile devices not on the approved list to access HSBCnetMobile.
• Do not leave your mobile phone unattended after logging on to HSBCnet Mobile.
• For added peace of mind, click the ‘Logout’ button when you are finished with HSBCnet Mobile.
• To prevent unauthorised access to your mobile device, enable its automatic passcode lock feature.
• Use default browsers originally provided with your mobile device.
• Avoid using an “unlocked” mobile device or a device with any unauthorised modifications when using HSBCnet Mobile.
• Avoid installing applications on your mobile device from unknown sources.
• When connecting to a wireless network using your mobile device, use only trusted networks or service providers and enable additional security protection, such as Wi-Fi Protected Access (WPA), if possible.

For full details of your security obligations when using HSBCnet Mobile, please refer to the HSBCnet Security Procedures.