LexisNexis® Guide to FATCA Compliance

As the world becomes "smaller," the dynamics of global financial transactions are intensifying. This is why the Foreign Account Tax Compliance Act (FATCA) is one of the most important awareness issues in today's tax policy and compliance arena.  As new developments emerge almost daily in this ever-changing environment, the importance of working knowledge is increasingly pronounced. The LexisNexis® Guide to FATCA Compliance, scheduled for release in May 2013, will be an invaluable resource of insight into FATCA principles, the reasons behind them, and the best practice steps financial institutions must follow in order to comply.  Comprehensive coverage in this work, authored by Professor William Byrnes and Dr. Robert Munro, is complemented by content provided by highly qualified international contributors to render meaningful information about all aspects of FATCA.  

The impact of FATCA is far-reaching: Affected financial institutions of many descriptions must navigate complex and challenging regulations to maintain compliance. In broad terms, foreign banks, brokerages, pension funds, insurance companies and a host of other foreign businesses that disburse payments to U.S. citizens and residents are all subject to FATCA compliance. As agreements between nations are consummated and other FATCA developments unfold, the importance of awareness will only grow.

Nishith Desai Associates: Entitlement to Treaty Benefits - What Constitutes Conclusive Evidence of Residence?

India is no stranger to discussions surrounding the issue of entitlement to tax treaty benefits. Way back in 2003, the Supreme Court of India was required to decide upon the validity of a circular confirming that entities with a valid Mauritius tax residency certificate (“TRC”) would be entitled to the benefits of the India-Mauritius tax treaty. Circular 789 dated April 13, 2000, was introduced to provide clarity on the availability of treaty benefits. It was however challenged on the basis that it restricted revenue authorities from exercising their statutory duties relating to assessment and determination of residence on a case to case basis. The Supreme Court, in an expansive judgment examining issues of Indian constitutional law, international law and administrative law, upheld the validity of the circular and confirmed that Mauritius tax treaty benefits would be available to persons with a valid TRC. Last year, with a view to obtaining complete information for determining the applicability of tax treaty benefits to a taxpayer, the Government introduced an amendment to the ITA requiring taxpayers to obtain TRCs from their countries of residence with such TRCs in a format capturing certain particulars prescribed by the Government of India, in order to be eligible to claim treaty benefits.

This year’s Budget goes one step further with its amendment to sections 90 (Agreement with foreign countries or specified territories) and 90A (Adoption by Central Government of agreement between specified associations for double taxation relief) of the ITA. The amendment provides that a TRC “shall be necessary but not a sufficient condition” to claim tax treaty benefits. While no criterion has been prescribed in the Finance Bill to determine what constitutes ‘sufficient condition’, statements have been made by the Finance Minister that only persons having ‘beneficial ownership’ of assets would be eligible to claim tax treaty benefits. It is unclear at this point in time, what should constitute beneficial ownership since India has historically been a jurisdiction which does not recognize duality of ownership, and which follows the doctrine of form over substance in tax laws. Further, it should be noted that tax treaties specify circumstances e.g. income from royalties, fees for technical services, where beneficial ownership is a criterion for application of tax treaty rules, but it does not provide that beneficial ownership is a criterion for determination of residence for application of tax treaty benefits (which may be subject to the limitation of benefits article in the tax treaties). From a practical perspective, another concern worth noting is that this amendment is proposed to be introduced retroactively, with effect from financial year 2012-2013, a move which could impact non-resident investors across the board if they intend to claim tax treaty benefits. Further, there is currently no clarity by the Central Board of Direct Taxes on the application of the amendment vis-à-vis Circular 789 which provides that a Mauritian TRC would suffice for application of tax treaty benefits. The issue whether a ‘later in time doctrine’ can be applied in such context is also a question open for debate.

While the enactment of the GAAR has been postponed to financial year 2015-16 pursuant to the recommendations of the expert committee led by Dr. Parthasarathi Shome, non-residents may need to consider carefully the possibility that disallowance of tax treaty benefits by Indian revenue authorities may have already begun albeit in another form.

IFC Review - ‘A Jury of our Peers’: How External Scrutiny Benefits International Finance Centres

IFCs have proven themselves to be both resilient and adaptive to change, Marcus Killick examines how IFCs can benefit from external scrutiny.

IFC Review - Q&A: Europe on Offshore

The IFC Review speaks to European Commission representative Emer Traynor about the EU response to tax competition and international finance centres.

IFC Review - UAE: The Investor’s Favourite Middle Eastern Destination

With recent changes to Tax Residency and the Competition Law, Yann Mrazek, Cramer-Salamian highlights why the UAE is considered one of the favoured middle eastern jurisdictions for investors.

IFC Review: Recent Regulatory Changes in St Vincent and the Grenadines

Isaac Legair, Dennings provides an insight into recent legislative changes destined to consolidate the SVG as one of the industry's most credible IFCs.

IFC Review: Due Diligence - Time To Sell The Business

L Burke Files in his latest column provides an insight into some of the common mistakes made when time comes to sell your business that you should avoid at all costs.

IFC Review - Curaçao: An Unintended Consequence

Priscilla Lotman, Frontshore and Tamara Stienstra, Spigt Dutch Caribbean examine how Curacao has developed into a well known IFC from very humble beginnings.

Singapore: Driver Improvement Points System (DIPS)

Introduction

Singapore's demerit points system named the Driver Improvement Points System (DIPS) was introduced on 1 March 1983.

DIPS is designed to identify and rehabilitate errant drivers through a system of rewards and punishments. Errant motorists are thus encouraged to improve their driving behaviours on the roads with incentives to expunge their demerit points and previous suspension record as well as remission of suspension period.

Key Features Of DIPS

Suspension of driving licence

New or Probationary Motorists

For a new motorist who is under one year probation from the date of grant of his driving licence, his new driving licence will be revoked and become invalid when he accumulates 13 or more demerit points during his probationary period. The licence holder will have to retake all the necessary driving tests (theory and practical) to obtain a licence to drive/ride again.

Non-Probationary Motorists

For a motorist who has no previous suspension record with Traffic Police, if he has accumulated 24 or more demerit points within 24 consecutive months, his driving licence will become liable for the 1st suspension of 12 weeks.

For a motorist who has previous suspension records with Traffic Police, if he accumulated 12 or more demerit points within 12 consecutive months, his driving licence will become liable for the subsequent suspension.

For subsequent suspensions after 1st suspension, the suspension periods are :

1. 2nd suspension : 24 weeks;
2. 3rd suspension : 1 year;
3. 4th suspension : 2 years; and
4. 5th suspension (onwards) : 3 years.

Where the suspension period lasts a year or longer (i.e. 3rd suspension and onwards), the driving licence will be revoked and become invalid. The licence holder will have to retake all the necessary driving tests (theory and practical) to obtain a licence to drive/ride again.

Motorists liable for 1st and 2nd suspension will be offered a retraining course to correct their driving behaviours. If they take and pass the retraining course, their suspension period will be given a remission:

1. For 1st suspension, the suspension period will be reduced from 12 weeks to 4 weeks; and
2. For 2nd suspension, it will be reduced from 24 weeks to 12 weeks.

There is no offer of retraining course and remission for 3rd and subsequent suspensions.

During the suspension period, the photocard driving licences must be surrendered to Traffic Police. For 1st and 2nd suspensions, the photocard driving licences will be returned to the motorists upon the expiry of the suspension period. The following table summarises the suspension rules under DIPS for non-probationary motorists.

Level of suspensions	Criteria for suspension	Period of suspension	Maximum Remission allowed	Balance Period of Suspension after Retraining
1st suspension	24 points or more within 24 months	12 weeks	8 weeks (after passing retraining)	4 weeks
2nd suspension	12 points or more within 12 months	24 weeks	12 weeks (after passing retraining)	12 weeks
3rd suspension	12 points or more within 12 months	12 months	0	12 months (Licence revoked)
4th suspension	12 points or more within 12 months	24 months	0	24 months (Licence revoked)
5th suspension and above	12 points or more within 12 months	36 months	0	36 months (Licence revoked)

Notice of demerit points accumulated

When the demerit points awarded against a motorist under DIPS reach 50% of the maximum number at which the driving licence may be suspended or revoked, a letter of notice will be sent to him for his information.  The intent of the letter is to pre-warn the holder to improve his driving behaviour, or he may face the consequence of becoming liable for suspension.

Incentives for good driving behaviour

A licence holder who maintains a 12-month period free of scheduled offences from the date of last scheduled offence committed will have all his previous demerit points removed from his record.

A licence holder who maintains a 24-month period free of scheduled offences from the date of expiry of last suspension will also have all his previous suspension(s) removed from his record, i.e. he will be treated similar to a driver with no previous suspension record.

Motorists with a clean driving record for a continuous period of three years will enjoy a discount over and above the usual No-Claim Bonus when they renew their insurance policy with participating insurance companies. They must also not have made any claims on their vehicles' insurance for the past three years.

Electronics Driver Data Information & Enquiry System (EDDIES)The public can check on the driving licence status and demerit points accumulated for a person at the following URL address:
https://www.psi.gov.sg/NASApp/tmf/TMFServlet?app=SPF-PTD-EDDIES-II&reload=true

List Of Scheduled Offences Under DIPS

LIST OF SCHEDULED OFFENCES UNDER DIPS

S/No.	Offences committed	Demerit points
1	Carrying excess pillion or carrying pillion sitting not astride	3
2	Rider failing to wear or wear insecurely on his head a protective helmet	3
3	Disobeying traffic direction of police officer, employee of Authority or security officer engaged in regulating traffic	3
4	Conveying load not properly secured	3
5	Using tyres with ply or cord carcass exposed	3
6	Driver failing to wear seat belt	3
7	Parking abreast of another vehicle	3
8	Parking within a pedestrian crossing	3
9	Stopping in a zebra controlled area	3
10	Driver failing to ensure that every passenger wears a seat belt	3
11	Using a motor vehicle where a person below 1.35 metres in height is a passenger and is not properly secured by an approved child restraint or a body-restraining seat belt	3
12	Parking within a Demerit Points No Parking Zone	3
13	Stopping within a Demerit Points No Stopping Zone	3
14	Failing to fill up every passenger seat in driver’s cabin, or any additional cabin or enclosed space provided for the carriage of passengers or goods and which is adjacent to or is an extension of the cabin for the driver, before carrying any person on the floor of open deck goods vehicle	3
	Fine : Light Vehicle: $120 ;  Heavy Vehicle : $150
15	Exceeding speed limit for vehicle by 1 to 20 kilometres per hour	4
16	Exceeding speed limit on a road by 1 to 20 kilometres per hour	4
17	Failing to give way to oncoming traffic at controlled junction	4
18	Failing to give way at uncontrolled junction	4
19	Failing to give way at junction	4
20	Failing to give way at roundabout	4
21	Crossing double white lines	4
22	Crossing road divider	4
23	Obstructing flow of traffic	4
24	Forming up incorrectly when turning left or right	4
25	Failing to give way to ambulance, fire brigade or police vehicle	4
26	Driving while carrying load on a motor vehicle in a dangerous manner	4
27	Stopping on the shoulder or verge of an expressway	4
28	Stopping or remaining at rest on the carriage way of expressway	4
	Fine : Light Vehicle: $130 ;  Heavy Vehicle : $160
29	Exceeding speed limit for vehicle by 21 to 30 kilometre per hour	6
30	Exceeding speed limit on a road by 21 to 30 kilometres per hour	6
31	Driving on the shoulder of an expressway	6
32	Failing to securely tie or attach goods to a goods vehicle to prevent their falling off from the vehicle	6
33	Offences committed by motorists at pedestrian crossing	6
34	Driving or riding against the flow of traffic as indicated by traffic signs	6
35	Careless driving	6
36	Carrying passengers on a motor vehicle or trailer in a dangerous manner	6
37	Reversing unnecessarily along an expressway	6
38	Failing to obey 1.1 metre height restriction for persons carried on open deck goods vehicle	6
39	Carrying passengers when the clear floor space of the open deck of goods vehicle available for each passenger is insufficient	6
	Fine : Light Vehicle: $150 ;  Heavy Vehicle : $180
40	Exceeding speed limit for vehicle by 31 to 40 kilometres per hour	8
41	Exceeding speed limit on a road by 31 to 40 kilometres per hour	8
	Fine : Light Vehicle: $170 ;  Heavy Vehicle : $200
42	Driving without due care or reasonable consideration for other road users	9
43	Carrying passengers on a goods vehicle in a dangerous manner	9
	Fine : Light Vehicle: $170 ;  Heavy Vehicle : $200
44	Exceeding speed limit for vehicle by 41 to 50 kilometres per hour	12
45	Exceeding speed limit on a road by 41 to 50 kilometres per hour	12
	Offender will be prosecuted in court
46	Failing to conform to traffic light signals	12
	Fine : Light Vehicle: $200 ;  Heavy Vehicle : $230
47	Use of mobile telephone while driving	12
	1st offence: Fine not exceeding $1000 or jail up to 6 months or both 2nd and subsequent offence: Fine not exceeding $2000 or jail up to 12 months or both
48	Exceeding speed limit for vehicle by 51 to 60 kilometres per hour	18
49	Exceeding speed limit on a road by 51 to 60 kilometres per hour	18
	Offender will be prosecuted in court
50	Exceeding speed limit for vehicle by more than 60 kilometres per hour	24
51	Exceeding speed limit on a road by more than 60 kilometres per hour	24
52	Reckless or dangerous driving	24
	Offender will be prosecuted in court

DIPS Scenarios

Motorist with Clean Driving Record

Mr A has a clean driving record. His licence will be suspended if he accumulates 24 or more demerit points within 24 months.

For example, on 1/1/2000, he committed his first traffic offence carrying 8 demerit points

If he maintains a 12-month period free of offences carrying demerit points from the date of this offence committed on 1/1/2000, his 8 demerit points will be expunged and he will have a clean driving record again on 1/1/2001.

However, Mr A did not manage to maintain the 12-month period free of demerit points. On 8/3/2000, he commits another traffic offence carrying 6 demerit points.

On 15/8/2000, Mr A then committed another traffic offence carrying 12 demerit points. He has accumulated 26 demerit points within the 24 months. He will be liable for a 1st suspension of 12 weeks. If he attended and passed the retraining programme, his suspension MAY be reduced to 4 weeks.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Motorist with Suspension Record

Mr A served his suspension that ended on 15/11/2000. His previous 26 points are expunged but his suspension record still stands

Because of his previous suspension record, Mr A will be liable for another suspension if he accumulates 12 or more demerit points within 12 months from the date his suspension was lifted on 15/11/2000. If he maintains a 24-month period free of demerit point starting from 15/11/2000, his suspension record itself will be expunged on 15/11/2002.

On 1/9/2001, Mr A committed an 8-demerit point traffic offence. The 12-month and 24-month qualifying period for demerit points and suspension records to be expunged respectively will then start from 1/9/2001. If he maintains a demerit point free record:

a) For 12 months, on 1/9/2002, his 8 demerit points would be expunged. However, his suspension record still remains with Traffic Police and he must not accumulate 12 or more demerit points within the next 12 months.

b) For 24 months, on 1/9/2003, his suspension record would be expunged. He would revert to having a clean driving record. This means that he can accumulate up to 23 demerit points within 24 months.

His licence is liable for suspension if he accumulates 24 or more demerit points within the next 24 months.

Additional Example 1

Mr B has a clean driving record. On 1/1/2001, he committed his first offence carrying 12 demerit points. On 15/4/2001, he committed another traffic offence carrying 18 demerit points. As he has accumulated 30 demerit points within a 24-month period, he is liable for 1st suspension.

Mr B decided to appeal against the offence committed on 15/4/2001. During the appeal process, he committed a traffic offence carrying 4 demerit points on 21/6/2001.

Mr B's appeal was subsequently rejected and he served a 1-month suspension, say from 13/7/2001 to 12/8/2001. His suspension was lifted on 13/8/2001. His previous 30 demerit points which were accumulated from 1/1/2001 to 15/4/2001 would be expunged. However, his 4 demerit points obtained for the offence on 21/6/2001 will remain under his records.

If Mr B maintained a demerit point free record:

a) For 13 months, on 21/7/2002, his 4 demerit points would be expunged. This is a 13-month period after the offence on the 21/6/2001 was committed, consisting of 12 months after the offence was committed excluding any time served under suspension (which is 1 month in this example).

b) For 24 months, on 13/8/2003, his suspension record would be expunged. This is a 24-month period after Mr B's suspension was lifted on 13/8/2001.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional Example 2

Mr C has a clean driving record. On 1/1/2001, he committed his first traffic offence carrying 8 demerit points. On 1/4/2001, he committed another traffic offence carrying 6 demerit points.

If Mr C thereafter maintained a 12-month period free of offences carrying demerit points from the last offence date (1/4/2001), his 14 demerit points will be expunged and he will have a clean driving record again on 1/4/2002.

India: TRC not enough to claim benefit under DTAA

Finance Minister P Chidambaram today said Tax Residency Certificate (TRC) will not be enough to claim benefits under the Double Taxation Avoidance Agreement (DTAA), a move to prevent tax evasion under the garb of treaties.

TRC not enough to claim benefit under DTAA: Chidambaram

India - Economic Survey 2013: Finance minister casts envious eye at Mauritius

The finance minister's chief economic advisor, Raghuram Rajan, is looking for a debate on the 'Mauritian miracle' which helped the Indian Ocean nation turn around its economy and achieve full employment, and see if there is a case for India to emulate the model. 

Economic Survey 2013: Finance minister casts envious eye at Mauritius

Jersey’s Finance Industry Consulted on UK FATCA

Jersey Finance, the promotional body responsible for the island's finance industry, has been asked by the States of Jersey to consult its members on whether to enter into a so-called 'FATCA type' agreement, including a disclosure facility, with the UK government or to explore other options.

The consultation period will last for three weeks until Friday 15th March.

The move follows on from months of planning for the introduction of the US Foreign Account Tax Compliance Act (FATCA), which was devised by the United States to help ensure that all American citizens pay the correct amount of tax to the US government, regardless of where in the world their assets and wealth are held. The UK is seeking to mirror the American agreement. 

Geoff Cook, Jersey Finance CEO, said:

“This is an important and complex matter that we believe should be developed and agreed by a process of constructive consultation between all parties. It is our view that considerable work is still required to find a solution that meets the long-term needs of the UK, while at the same time avoiding the very real risks of disproportionate costs in terms of implementation and compliance, as well as any unintended consequences that might unduly harm the international competiveness of Jersey and other centres that form the Crown Dependencies and Overseas Territories.

“We are encouraged that representatives of the Jersey government are continuing discussions with their UK counterparts and, in particular, that they are highlighting the need to promote automatic exchange of information worldwide, on a level playing field basis.”

Details of the consultation process have been sent directly to all Jersey Finance member firms, who have been invited to either respond directly to the States, or to submit their comments to Jersey Finance for inclusion in a broader industry response.

Conyers Dill & Pearman: Mauritius Law relating to Shadow Directors

The Mauritius Companies Act 2001 (the “Act”) contains the following provisions relating to the possibility that a party, who is not appointed as a director of a company, may be considered to be a shadow director:

• For the purposes of the Act, “directors” include (i) a person occupying the position of director of the company by whatever name called; and (ii) an alternate director, but does not include a receiver.
• For the purposes of sections 143 to 157, which deal with the duties of the directors and transactions in which the directors have an interest, and 160 to 162, which deal with the standard of care and civil liability of directors as well as indemnification and professional insurance, “directors” include (i) a person in accordance with whose directions or instructions a person referred to in the above definition of director may be required or is accustomed to act; (ii) a person in accordance with whose directions or instructions the Board of the company may be required or is accustomed to act; (iii) a person who exercises or who is entitled to exercise, or who controls or who is entitled to control the exercise of powers, which, apart from the constitution of the company, would fall to be exercised by the Board; and (iv) a person to whom a power or duty of the Board has been directly delegated by the Board with that person’s consent or acquiescence, or who exercises the power or duty with the consent or acquiescence of the Board.

It should be noted that a person acting only in a professional capacity would not be considered as a shadow director.

Based on the foregoing provisions of the Act, there is clearly some form of risk that a party who becomes overly involved in the activities of a Mauritius company may be considered to be a shadow director. However, this would only arise in a situation where the Board becomes accustomed to acting in accordance with the directions or instructions of that person.

UK Parliamentary Commission on Banking Standards - Second Report - Banking reform: towards the right structure

Here you can browse the report which was ordered by the House of Lords and the House of Commons to be printed 26 February 2013.

Contents

Terms of Reference

1 Introduction

2 Reinforcing the ring-fence

Introduction

Electrifying the ring-fence

The rationale for electrification

The first reserve power

The independent review mechanism

The second reserve power

Objectives in primary legislation

Delegated powers and scrutiny of secondary legislation

The approach of the draft Bill and the associated risks

Consideration of initial proposed secondary legislation in draft

Conditions on the exercise of certain delegated powers

Parliamentary scrutiny

3 Specific issues on ring-fence implementation

Ring-fenced banks acting as principal in the sale of derivatives

The de minimis requirement

Independence and governance of the ring-fenced bank

Relationship between the ring-fenced bank and the holding company

Liabilities

4 Capital and loss absorbency

Introduction

Bail-in

Primary Loss Absorbing Capital (PLAC)

The leverage ratio and risk-weightings

5 Wider reforms and our final Report

Conclusions and recommendations

Annex: Recommendations and responses

Formal Minutes

Appendix: Amendments

Acritas Releases US Law Firm Brand Index 2013

The results from Acritas’ US Law Firm Brand Index 2013, released February 26, show that the dominance of the US elite law firms is under threat from a rising group of ambitious firms with international capabilities and a dedicated focus on client needs.

Legal services buyers in the largest companies in the US and across the world are no longer willing to consistently pay top tier rates for outside counsel. Where work can be done by firms offering similarly credible expertise to the elite firms but at a lower cost, clients, under pressure to control expenditure, are favoring the value-for-money option.

Despite this growing trend, Skadden manages to retain its lead in the US Index as the brand with the highest levels of top of mind awareness, usage for high value work as well as favorability and consideration for top-level mergers and acquisitions.

However, favorability towards Skadden and other elite firms has in fact declined year on year since 2010.  This downward trend, coupled with the changes taking place among the firms beneath the top rank, offer greatest insight into the future distribution of US law firm brand strength.

In response to clients’ changing behavior, many law firms in the ‘chasing pack’ have been raising their game by focusing on client service, expanding their practice areas and improving their industry knowledge and geographic reach.

The survey results consistently show that influential buyers of global legal services are favoring firms which have a strong global footprint and are therefore ideally placed to help them meet their increasingly international needs – both Baker & McKenzie and DLA Piper have improved their Index ranking this year on this basis.

FSA: Ponzi and pyramid schemes

Ponzi and pyramid schemes promise investors high returns or dividends not usually available through traditional investments. While they may meet this promise to early investors, people who invest in the scheme later usually lose their money. Find out how to avoid these scams.

‘Ponzi’ schemes are named after their creator Charles Ponzi who, in the 1920s, guaranteed a 50% return to investors in the US. However, much of the subsequent money he received was used to pay ‘dividends’ to earlier investors. The scheme collapsed when he was unable to attract more money to pay investors who entered the scheme later.

Pyramid schemes work in much the same way, although investors are encouraged to recruit more people and money by being paid commission when they do so. These scams can also be called ‘franchise fraud’, ‘multi-level marketing’ or a ‘chain referral scheme’.

REMEMBER: IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS!

How it works

Ponzi and pyramid schemes occur where payments are made to existing investors using money from new investors. This helps make the scheme seem genuine and profitable to the early investors and encourages them to attract more people and money.

But both types of scheme collapse when the unsustainable supply of new investors and money dries up. Investors usually find most or all of their money is gone, and that the fraudsters who set up the scheme claimed much of it for themselves.

The schemes often involve ‘affinity fraud’ as respected members of a group can be targeted first, receive a high return on their investment and promote the scheme to others before it collapses. Find out more about affinity fraud.

The focus of pyramid schemes is often on money that can be earned from recruiting new investors rather than the return on investment.

How to protect yourself

We strongly advise you to only invest money with financial services firms that are authorised by us: check our Register to ensure they are. You can also see on our Register whether an individual has been approved by us.

Beware of investment opportunities that offer unrealistic returns and consider getting independent professional advice before making any investment decision.

Also be careful when an opportunity to invest your money requires you to bring in subsequent investors to increase your profit – and be especially wary if you are told you can earn more from introducing investors than from the return on investment.

Be suspicious if you receive or are promised a very high and consistent return on your investment. And remember that early investors in certain schemes receive high returns but the money will eventually dry up and later investors can lose the lot.

There are more steps you can take to keep your savings safe – find out how to protect yourself from investment scams.

What to do if you have been scammed

If you are concerned you have been scammed you should stop paying money to the individuals involved.

You should then report the scam to us by contacting our Consumer Helpline. Please provide as much information as you can about your investment and the company or person involved, including their contact details.

We may be able to intervene where a firm or individual is selling, promoting or advising on investment opportunities without our authorisation. We can also act where a firm or individual has been accepting deposits without our authorisation.

You should also report the fraud to the police. If you sent money to a UK or overseas bank account, or by another type of money transfer, contact Action Fraud on 0300 123 2040.

Find out about more scams and how to protect yourself from scams.

Page last updated 15/06/2012

BPC Banking Technologies Sets Flag on Mauritius

SmartVista and HP NonStop lead the way at Payment Exchange International

BPC Banking Technologies, the leading provider of Open System e-payment solutions for the global financial industry, announces today a significant milestone for all users of legacy payment applications on the HP Integrity NonStop platform. With the successful completion of the migration project at Payment Exchange International (PeX), Mauritius, not only does PeX gain the combined benefits of SmartVista and HP NonStop but all HP NonStop users in the payments marketplace can take advantage of this unique combination. PeX is the first of several replacement projects on HP NonStop and with this go-live continues their ground-breaking strategy.

Due to the close partnership between BPC and HP, this combination of advanced payment software on mission critical HP NonStop servers enables organizations to rapidly launch new products to meet changing customer needs, while reducing time to market and dramatically reducing total cost of ownership. Thus, financial companies world-wide have an opportunity to transform their payment businesses with SmartVista while retaining their investment in their existing NonStop infrastructure.

PeX operates a Level 4 data centre and full card personalization centre in Cybercity, Mauritius and has established a reputation as a world-class and innovative payments service provider in the Middle East, Africa and Asia Pacific. The Company’s clients are mid-size and small banks and merchants. PeX supports their processing, e-commerce and m-commerce acquiring. In addition, PeX issues Visa, and MasterCard card products, runs ATM and POS-terminal networks, supports prepaid and debit cards.

Previously relying on a range of separate solutions, including some that had been placed into “end-of-life / sunset” mode by their vendors, PeX suffered from high cost of ownership, difficult day-to-day support and long lead-times in launching new products. The SmartVista suite was chosen for its market-proven flexibility and scalability, enabling the Company to take control over its payment infrastructure, providing an enhanced functionality, significantly reducing time to market when launching new products. BPC Banking Technologies supports PeX’s entire payments business including card issuing, processing and acquiring, the control and launch of new channels and transaction flows to and from all the clients. BPC also provided a new ATM monitoring tool specifically for the HP NonStop platform.

“It was important for us to preserve our significant investment in HP NonStop technology. We launched an extensive investigation into available applications on NonStop that could meet our broad functionality requirements. After an evaluation of all the main players in the market, it is clear that SmartVista is the only solution that can support our full business, both today and as we grow in the future. SmartVista has a unique combination of comprehensive functionality, unrivalled flexibility and proven ability to support extremely high volumes. ” said Mr Sailesh Sewpaul, Group Chief Executive Officer at PeX.

“We are proud to be a key technology partner to PeX in this pioneering project, which is a significant milestone for us. Across the world, our customers have transformed their businesses with SmartVista, and we are delighted to bring these benefits to the HP NonStop community around the globe, many of whom are evaluating their software application alternatives to legacy systems,” added Mr Daryl Berg, Managing Director of BPC Banking Technologies in Africa.

“At HP, our objective is to deliver the best solutions to our customers. To achieve this we seek out the best companies to partner with. BPC Banking Technologies is a market leader and the SmartVista suite of end to end e-payment applications perfectly complements the benefits that the HP NonStop platform delivers. HP NonStop Technology provides our customers the highest “Application” Availability in the market place. With our “Real-Time” NonStop Computing Technology we are honored to help PeX to achieve its ambitious business goals and we are certain that the combination of BPC and HP will help make this happen.” noted Alexander Boss, Business Development Manager Financial Markets, Europe Middle East & Africa from HP.

University of Mauritius welcomes first batch of Law Practitioners Vocational Course’s students

The first batch of 100 students to attend the Law Practitioners Vocational Course, under the aegis of the Faculty of law and management of the University of Mauritius (UoM), participated yesterday in an induction session. The Minister of Tertiary Education, Science, Research and Technology, Dr Rajeshwar Jeetah, the Attorney General, Mr Yatindra Nath Varma, and the Vice-Chancellor of the UoM, Professor Harry C S Rughooputh, were present on that occasion.

In his address, the Minister of Tertiary Education, Science, Research and Technology stated that it was a historic moment for the University of Mauritius. He said that the conduct of such a course by the UoM not only fits into government’s vision for the tertiary sector but provides continuous professional development and encourages research in the field of law as well as contributes to the emergence of high-calibre graduates. Dr Jeetah also spoke of the high expectations he had of the students enrolled for the course, adding “as high-achieving graduates, you should be committed to maintain high standards in your education”. 

For his part, the Attorney General deemed the event ‘a dream coming true’ in the modernisation of training for the legal profession. He recalled that the course is a practice-based one, incorporating both the academic and vocational perspective in the delivery of the programmes, as recommended by experts from the Nottingham Law School, the Université de Limoges and other stakeholders. The various modules focus on commercial and business law, criminal procedure, family law, conferencing, drafting of legal documents, ethics and opinion writing, among others. Various resources will be available to students including a courtroom for practice.

It is to be noted that in Mauritius, any person who wishes to be considered for appointment as a judge, magistrate or legal officer needs to satisfy the requirements as prescribed by the Council for Vocational Legal Education. Following the enactment of the Law Practitioners (Amendment) Act 2011 in September 2012, the Centre for Professional Legal Studies of the University of Mauritius has been ascribed the responsibility of conducting the approved professional training of future attorneys, barristers and notaries. Henceforth, prospective law practitioners, barristers, attorneys and notaries are now able to enrol on the Law Practitioners Vocational Course provided by the Centre. After completion of the Vocational Course, students will obtain a Certificate of Attendance of the University of Mauritius and be able to take part in the vocational examinations conducted by the Council for Vocational Legal Education in order to be qualified as a professional attorney, barrister or notary.

Mauritius and Maldives Sign Bilateral Air Services Agreement

The Government of Mauritius signed a bilateral air services agreement with the Government of the Republic of Maldives yesterday in Port Louis for the operation of direct air links to improve connectivity between the two countries.

The signatories were the Vice-Prime Minister, Minister of Finance and Economic Development, Mr Xavier-Luc Duval for the Mauritian side and the Minister of Defense and National Security of the Maldives, Colonel (RTD) Mr Mohamed Nazim.

The signing of the agreement follows the recent visit of VPM Duval in Maldives earlier this year, where both Governments expressed their wish and agreed upon concluding a bilateral agreement to building closer networks between the two countries by establishing direct air connectivity so as to tap the emerging tourism market in China especially Beijing and from Africa.

The agreement provides for a multiple designation of airline from both sides and for the time being Air Mauritius in collaboration with the Mega Global Air Services (Maldives PVT Ltd.) and the Island Aviation Services Ltd. of Maldives have been designated to operate direct flights between Beijing and Mauritius, as well as providing direct air links to the Maldives. Seven flights are expected weekly and will be operational before the month of July this year.

In a statement during the signing ceremony, the Vice-Prime Minister, Minister of Finance and Economic Development, Mr Xavier-Luc Duval, expressed satisfaction that the signing of the agreement is a historical step between Mauritius and the Maldives as it would further strengthen relations between the two countries especially in the area of tourism. According to VPM Duval, both countries have a strong presence in China and the two islands also have interesting features for the Chinese market.

For his part, the Minister of Defense and National Security of the Maldives, Colonel (RTD) Mr Mohamed Nazim, recalled that every year about 80,000 Chinese tourists visit Maldives and the coming into operation of the agreement, will allow Maldives to share the market with Mauritius. Besides tourism, Minister Mohamed Nazim added that the direct flight between Mauritius and Maldives will also boost trade between the two neighbours.

The Lawyer: The top 30 offshore firms

The top 30 offshore firms

Profiles of the top 30 offshore firms, ranked by number of partners

Ebb and flow

Maples and Calder has regained the top spot and other firms are expanding - the tide is changing offshore

Maples regains offshore crown from Appleby

Maples and Calder’s 2012 hiring spree has pushed it to the top of the offshore top 30 again, with the firm overtaking Appleby as the world’s largest offshore firm by lawyer headcount.

The Lawyer: The India Opportunity

Is India still the jewel in the BRICs’ crown? Managing risk when investing in the country was the subject of a lively debate in London recently

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IMF Working Paper: Financial Stability in an Evolving Regulatory and Supervisory Landscape

This paper runs qualitative and quantitative analyses of the financial soundness of Danish banks. Helped by a series of Denmark’s financial policy initiatives, banks have made progress in improving financial stability. However, vulnerabilities remain. To mitigate risks, banks should continue to build more robust capital and liquidity buffers, and enhance further the transparency of disclosures. The flexibility embedded in EU regulations should be used to design strong prudential policies, treating Basel III and the CRD IV regulations as floors. Crisis prevention and management could be further strengthened by phasing out gradually deferred-amortization mortgage loans and introducing risk-adjusted deposit insurance premia.

IMF Working Paper: Taxation, Bank Leverage, and Financial Crises

That most corporate tax systems favor debt over equity finance is now widely recognized as, potentially, amplifying risks to financial stability. This paper makes a first attempt to explore, empirically, the link between this tax bias and the probability of financial crisis. It finds that greater tax bias is associated with significantly higher aggregate bank leverage, and that this in turn is associated with a significantly greater chance of crisis. The implication is that tax bias makes crises much more likely, and, conversely, that the welfare gains from policies to alleviate it can be substantial—far greater than previous studies, which have ignored financial stability considerations, suggest.

UK: FSA refreshed statement regarding CRD IV implementation

The original proposed deadline for entry into force of the draft European Union legislation to update the framework for capital requirements, known as CRD IV, has now passed. Negotiations between the European Parliament, European Commission and Council of Ministers to finalise the legislation are still underway. 

The FSA continues to take all action it can to prepare for implementation of CRD IV and continues to expect firms to do the same. Taking into account the further slippages in the negotiation timetable, the FSA now expects to be able to begin collecting data under Common Reporting for the period beginning 1 January 2014, should the legislation have entered into force by this date.

The European Commission’s proposals for CRD IV, consisting of a Regulation and a Directive, had an implementation date of 1 January 2013, in line with the implementation date of the Basel III agreement. Due to the continued negotiations between the European Commission, Parliament and Council, this proposed implementation date has now passed. No alternative date has yet been communicated by the EU institutions.

The FSA will continue to undertake all preparatory work that is possible in the absence of finalised legislative text. We expect all firms in scope of CRD to do likewise. We set out our intended approach to capital transition in a statement in October 2012. Once finalised legislative text is available at the EU level the FSA intends to publicly consult on changes to FSA rules. The provisions of the Regulation will directly apply to firms.

The introduction of Common Reporting, which is incorporated into the requirements in CRD IV, is dependent on delivery of the necessary technical systems and on implementing technical standards to be drafted by the European Banking Authority and adopted by the European Commission. The FSA is proceeding with the necessary preparatory work to be ready to begin collecting data under Common Reporting for the period beginning 1 January 2014, should the legislation and related standards be in force by this date.

A Synopsis of the Talk by Professor Jason Sharman from the Centre for Governance & Public Policy, Griffith University, Australia on his report on “Shell Companies - Launderers Anonymous” held at the FSC House, Thursday 14th February 2013

In line with its supervisory duties and to promote public understanding of the financial system, the Financial Services Commission (FSC), the integrated regulator for Global Business and the financial services sector other than non-banking in Mauritius, welcomed the renowned Professor Jason Sharman for a talk on his report "Shell Companies - Launderers Anonymous" on 14th February 2013.

Professor Sharman is particularly known for his contribution to the knowledge in the regulation of global finance, especially relating to money laundering, tax, corruption and international financial centres. Professor Sharman is the renowned author of several books and various articles. His work has been featured in referred journals as well as in major media outlets like the Economist and the New York Times. He has worked as a consultant with the World Bank, Asian Development Bank, Commonwealth Secretariat, Financial Action Task Force, the Asia-Pacific Group on Money Laundering, Pacific Islands Forum and in the private sector.

This report by Michael Findley, Daniel Nielson and Professor Sharman on "Shell Companies - Launderers Anonymous" is a study on shell companies mainly because, for criminals moving large sums of dirty money internationally, there is no better device than an untraceable shell company. This report provides the results of an experiment soliciting offers for these prohibited anonymous shell corporations by a research team who impersonated dodgy customers requesting the setting up of anonymous companies from management companies all over the world. Evidence was drawn from more than 7,400 email solicitations to more than 3,700 Corporate Service Providers in 182 countries. Through this experiment, they were able to test whether international rules are actually effective in terms of laundering money, giving and receiving bribes, tax evasion and financing terrorism.

The results is said to provide the most complete and robust test of the effectiveness of international rules banning untraceable, anonymous shell companies. Furthermore, because the exercise took the form of a randomized experiment, it also provides unique insight into what causes those who sell shell companies to either comply with or violate international rules requiring them to collect identity documents from customers. 

Key findings included:

1. Overall, international rules that those forming shell companies must collect proof of customers’ identity are ineffective. Nearly half (48 percent) of all replies received did not ask for proper identification, and 22 percent did not ask for any identity documents at all to form a shell company.
2. Against the conventional policy wisdom, those selling shell companies from tax havens were significantly more likely to comply with the rules than providers in OECD countries like the 2 United States and Britain. Another surprise was that providers in poorer, developing countries were also more compliant with global standards than those in rich, developed nations.
3. Defying the international guidelines of a “risk-based approach,” shell company providers were often remarkably insensitive to even obvious criminal risks. Thus, although providers were less likely to reply to clear corruption risks, those that did respond were also less likely than in the placebo condition to demand certified identity documents of potential customers from high-corruption countries who claim to work in government procurement.
4. Corporate service providers were significantly less likely to reply to potential terrorists and were also significantly less likely to offer anonymous shell companies to customers who are possibly linked to terror. However, compared to the placebo a significantly decreased share of firms replying to the terrorist profile also failed to ask for identity documentation or refused service.
5. Informing providers of the rules they should be following made them no more likely to do so, even when penalties for non-compliance were mentioned. In contrast, when customers offered to pay providers a premium to flout international rules, the rate of demand for certified identity documentation fell precipitously compared to the placebo.

As Mauritius was one of the jurisdictions which were tested through this experiment and with the number of companies holding Global Business Licences now running in thousands, the FSC is well aware that there is an increased risk associated with money laundering which can be magnified if there is a lack of robust Due Diligence system. Further, the FSC’s vision is to be an internationally recognised financial supervisor committed to the sustained development of Mauritius as a sound and competitive Financial Services Centre. As such a vision cannot be achieved without the right balance between the need for strong regulations and business development, the FSC was particular interested in sharing the rational and findings of this report to its licensees and customers so that they are fully equipped with sufficient know-how and knowledge to maintain and increase the image of Mauritius as a recognized and vibrant International Financial Centre.

The talk by Professor Jason Sharman proved to be quite beneficial not only to the representatives of management companies present on the day but also for the image of the Mauritius International Financial Centre. According to the Professor “The study by Michael Findley, Daniel Nielson and myself found that in terms of following international Know Your Customer standards on company formation Mauritius applies the rules more effectively than the average IFC, and far more effectively than the average OECD country. We measured policy effectiveness by our Dodgy Shopping Count: namely, how many corporate service providers would you have to approach on average before you found one who would offer to provide a company without the need for any identification? The higher the score on this measure, the more effectively the rules are applied, and vice versa. As such, Mauritius's score of 28 compares very favourably with countries like the United States, which got 10.9. Contrary to the conventional wisdom, when it comes to company formation, offshore centres are much less likely to allow the sorts of dangerous practices that facilitate money laundering, corruption, and the financing of terrorism than onshore centres.”

He also went on to say that, “Judging from the results of our study, the Mauritius FSC is highly effective in ensuring that Mauritian management companies live up to international standards on company formation. However, the challenge faced by all jurisdictions linked in to the international financial system is that overall the rules designed to keep dirty money out of the system do not seem to work very well. A huge amount of regulation has been introduced in the last 20 years internationally, but it is hard to see much evidence that financial crime or money laundering has declined as a result.”

Mauritius, especially, the FSC is committed to maintain and forge a robust regulatory framework to create an environment of transparency, stability, certainty and predictability to maintain its good repute as a Jurisdiction of Substance.