30 December 2013

Mauritius: The FSC issues an Information Booklet on Effective Customer Risk Assessment for Management Companies

The Financial Services Commission (the ‘FSC’) is pleased to announce the release of an Information Booklet on Effective Customer Risk Assessment (‘Information Booklet’) intended for Management Companies (‘MCs’). The Information Booklet serves as guidance for MCs to operate within a risk-based environment. It is intended to assist MCs in the development of their internal controls systems.

As highlighted previously by the Chief Executive of the FSC, “the international FATF principles and the Code on the prevention of Money Laundering & Terrorist Financing are valuable instruments to fight against global crimes which are a threat to sustainable economic growth. While the Anti-Money Laundering policies and procedures must be based on local regulations and global best practices, the challenge is always the same - to ensure that those actions designed to combat and prevent crimes, in addition to being well designed, are also effective”.

Therefore, to sustain its competitive edge acquired over the years in the financial services sector, Mauritius has to maintain its good repute as a financial services centre. Service providers in the global business sector, including MCs, must ensure that there is an effective system of monitoring of the control framework. Risk profiling and risk grading of clients remain the crucial components of this framework.

The FSC hence encourages all MCs to use the Information Booklet as a tool to establish their effective internal control system as well as an opportunity to review their existing structure.

Financial Services Commission
30 December 2013

24 December 2013

France - Lutte contre la fraude : mise à jour de la liste des Etats et territoire non coopératifs

Le Ministère de l’Economie, des Finances et de l’Industrie a publié un communiqué de presse dans lequel il annonce avoir mis à jour la liste des Etats et territoire non coopératifs.

Dans le cadre de la politique de lutte contre la fraude, les ministres Pierre Moscovici et Bernard Cazeneuve ont adressé un courrier aux présidents et rapporteurs généraux des Commissions des finances de l’Assemblée nationale et du Sénat leur annonçant que les progrès effectués par les Bermudes et Jersey en matière d’échanges de renseignements leur permettent de sortir de la liste des Etats et territoires non coopératifs sur laquelle ils avaient été inscrits par arrêté du 21 août 2013.

Les Bermudes et Jersey ont satisfait à ce jour à la totalité des demandes de renseignements de la France, ce qui leur permettra d’échapper aux mesures de rétorsion prévues par la loi.

La liste sera mise à jour en 2014 en fonction des renseignements nécessaires à l’application de la législation fiscale française qui auront été obtenus par l’administration fiscale au titre des conventions d’assistance administrative.

IMF Working Paper No. 13/263: Financial Soundness Indicators and Banking Crises

The paper tests the effectiveness of financial soundness indicators (FSIs) as harbingers of banking crises, using multivariate logit models to see whether FSIs, broad macroeconomic indicators, and institutional indicators can indeed predict crisis occurrences. The analysis draws upon a data set of homogeneous indicators comparable across countries over the period 2005 to 2012, leveraging the IMF’s FSI database. Results indicate significant correlation between some FSIs and the occurrence of systemic banking crises, and suggest that some indicators are precursors to the occurrence of banking crises.

23 December 2013

Mauritius: FSC Circular Letter and FAQs on Financial Services (Administrative Penalties) Rules 2013

The Financial Services Commission (FSC) is issuing this Circular Letter and FAQ to inform its licensees and registered/authorized/approved persons about the Financial Services (Administrative Penalties) Rules 2013 and its application.



HSBC Mauritius: Global Business Tariff of Charges (effective 1st January 2014)

A monthly account maintenance fee of USD1,000 (or equivalent) will be applicable on all new Global Business accounts opened as from 1st January 2014. Please click here to consult the new Tariff of Charges for Global Business which will be effective as from 1st January 2014.   

Existing Global Business clients will benefit from a waiver of the monthly account maintenance fee for the first three months and a reduced preferential fee of USD100 until 31st December 2014.   

Customers are kindly advised to ensure that their accounts are properly funded as per the minimum balance requirement of USD50,000.

18 December 2013

FSB: Global adherence to regulatory and supervisory standards on international cooperation and information exchange

The Financial Stability Board (FSB) commenced in March 2010 an initiative to encourage the adherence by all countries and jurisdictions to regulatory and supervisory standards on international cooperation and information exchange. The initiative responded to a call by the G20 Leaders at their April 2009 Summit in London for the FSB to develop a toolbox of measures to promote adherence to prudential standards and cooperation with jurisdictions.

To recognise the progress that most jurisdictions evaluated by the FSB under the current initiative have made towards implementing international cooperation and information exchange standards, and to incentivise improvements by those jurisdictions not cooperating fully, in November 2011 the FSB first published the names of all jurisdictions evaluated. This annual status update provides current information on the countries being evaluated under the initiative. The list includes those identified as non-cooperative jurisdictions.

Objective of the initiative

The focus of the FSB's current initiative is on adherence to internationally agreed information exchange and cooperation standards in the areas of banking supervision, insurance supervision and securities regulation. Cooperation and information exchange amongst financial supervisors and regulators are essential for effective oversight in an integrated financial system. Financial markets are global in scope and, therefore, weaknesses in international cooperation and information exchange can undermine the efforts of regulatory and supervisory authorities to ensure that laws and regulations are followed and that the global operations of the financial institutions, for which they have responsibility, are adequately supervised.

The current initiative is part of a framework that the FSB has put in place for encouraging stronger adherence to international standards more broadly. In this framework, FSB member jurisdictions have committed to lead by example. They have committed to implement international financial standards, participate in international assessments, and disclose their degree of adherence. In addition, FSB members undergo periodic peer reviews focused on the implementation and effectiveness of international financial standards and of policies agreed within the FSB.

Jurisdictions evaluated

While the ultimate objective of the FSB's initiative is to promote implementation by all jurisdictions, the initial focus is on the adherence of FSB members and other jurisdictions that rank highly in financial importance. Under the initiative, the FSB prioritised a pool of about 60 jurisdictions for evaluation, including all 24 FSB member jurisdictions together with non-FSB jurisdictions that rank highly based on a combination of economic and financial indicators. (The ranking process is described in more detail in Annex B of the November 2011 statement).

The FSB has to date evaluated the jurisdictions listed in Tables 1 to 3 to determine whether they demonstrate sufficiently strong adherence to regulatory and supervisory standards on international cooperation and information exchange. Adherence was evaluated by the FSB based on the latest available detailed assessment report underlying the IMF-World Bank Report on the Observance of Standards and Codes (ROSC), as well as on the signatory status to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU)

16 December 2013

US Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act (FATCA), which is part of the US Hiring Incentives to Restore Employment Act of 2010, aims to combat tax evasion by US tax residents using foreign accounts. It includes certain provisions on withholding taxes and requires foreign financial institutions (FFIs) outside the US to pass information about their US customers to the US tax authorities, the Internal Revenue Services (IRS). Failure to meet these new reporting obligations would result in a 30% withholding tax on the financial institutions for payments of U.S. source income, gross proceeds of sales of property that could produce U.S. income, and passthru payments.

The FATCA provisions impose new and substantial burdens on FFIs in identifying US taxpayers, and registering and reporting information to the IRS. 

FATCA focuses on reporting:

  • By U.S. taxpayers about certain foreign financial accounts and offshore assets
  • By FFIs about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest

The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.

An Intergovernmental Agreement (IGA) makes it easier for partner countries to comply with provisions of FATCA. The IGA Model I provides for a partnership agreement between the U.S. and partner jurisdiction whereby FFIs in partner jurisdictions will be able to report information on U.S. account holders directly to their national tax authorities, who in turn will report to the IRS.

Offshore Pilot Quarterly (December 2013, Volume 16 Number 4)

Foaming at the Mouth

In a world of limitless possibilities we need to set boundaries for ourselves or our fate will be to face mounting despair.  I read words to that effect several years ago, put them on my mental shelf, and carried on.  They have had to be taken down from that shelf now, however, because I have just read an article describing shapeless trusts; these trusts, apparently, can be fashioned into various forms, just like Plasticine, and have found favour in Israel.  As a trust specialist, the concept for me strikes at the very roots of the relationship. 

I have in recent years watched the grim progress of the changes, however slight or cosmetic, made to the edifice of that bulwark of succession planning, the English trust, and which has been exported around the world; although, it must be said, not always with universal success; in the case of some countries, like a cheap wine, it has not travelled well.  But still the fundamental trust framework, enshrined in the legal maxim that requires three certainties (intention to create one as well as a clear identification of both its assets and the beneficiaries) has been sustained.  No matter how elaborate or fanciful the language, this is the kernel of a trust, and for which a trustee, as steward of the assets, is needed; well, that’s certainly how it once was.

Would you believe that the new interpretation stems from the very convention that was supposed to clarify the status of trusts internationally which was concluded back in 1985 and entered into force in 1992?  Because the Hague Convention entitled “The Law Applicable to Trusts and on their Recognition” does not stipulate that assets have to vest in the trustee, unlike the English law does, it is argued that the creator of the trust may retain title in the assets.  I should add that the trust regime in China speaks of entrusting property rights to the trustee, but this does not mean that the settlor is required to vest them in the name of the trustee.  Although there are moves afoot in Israel, as opposed to China, to change the law which has been in place since 1979, giving the trustee his rightful place, it is expected to take several years of parliamentary debate before the current position is reversed. 

The argument put forward is that such innovations extend the number of options available, like an extensive restaurant menu does, and that different trust models can suit different circumstances.  One defence is that for those cultures uncomfortable vesting assets in favour of a third party, diluting the trustee’s role is very comforting.  But if, like cell phones, we are going to see trust apps on offer, I predict that you will also see mishaps.  One can only imagine the opportunities for litigation which could be encouraged by disgruntled beneficiaries and any avaricious lawyers skilled in the art of word manipulation.   The solution?  Use a foundation, already very popular with Latin Americans who are also sensitive about control issues, but which is far from shapeless and holds title for succession planning in its own name rather than a trustee’s; importantly, it can grant generous powers to the founder that will have the Israelis and Chinese sleeping peacefully at night.

It is not just certain trust practitioners who are looking for the next big idea, but fortunately, in this fast-changing world, the durable still remains so, and can live alongside the innovative – provided you can recognise the value of both and not try to invent a better mouse trap. 

One word that is important in the Hague convention is “relationship” which is used to define the link between a trust’s creator and a trustee; it is not bound by a contract (which many believe it is) but its essence is the understanding between the giver and the receiver:  remember, the nature of the English trust has its origins in ecclesiastical law which preceded the court of equity, before clerics walked across from the church to the King’s chancery to confront the birth of trusts and let their consciences be their guide. 

The so-called shapeless trust has been described as substance without form but to my mind you are in danger of being unable to achieve substance over foam – just froth and nothing more, which would have had the clergy foaming at the mouth.

I am uncomfortable with the argument that the trustee does not need to have the assets vested in him to have control of them, as suggested in Beijing or Beersheba.  The reverse of this, of course, can, importantly, have equal application in the classic sham trust situation, where although the assets have been vested in a trustee, the settlor, effectively, continues to control them.  But whether this new species of trust, this Haifa hybrid if you will, ever gains traction elsewhere, it is yet one further example of the fine line that can sometimes be drawn between the authentic and the derisory.

Trust Hits the Dust

An aftershock following the Western world’s economic collapse calls on a different type of trust:  trust in governments and those providing professional services, such as accountants, bankers and lawyers, along with those professions allied with them.  Derision is a very apt word in this instance.  Not dissimilar to the English trust model, the bankers, for example, decided to re-invent banking, while the accountants split their time between being auditors and business advisers.  What about the lawyers?  Well, they required no new string to their bow because their trade is the essential prop, trying to ensure that all forms of business operate within the boundaries of the law.  Their principal tool is words; the right ones to get the job done.  And although as a professional class their reputation is not glowing, their function cannot be circumvented, any more than a doctor’s can; they are an essential part of the financial food chain, serving up on a tray their interpretation of the meaning, for instance, of “vesting”; “entrusting”; and “control”. 

In the mêlée, resulting from the hunt for tax evaders, to seek the definition of beneficial ownership for the purposes of not only transparency, but tax liability too, I have to ask myself:  are we on the way towards shapeless beneficial ownership?  If so, will the discretionary trust beneficiary be interpreted in some countries as having a vested interest for purposes of tax? 

The British chancellor of the exchequer, George Osborne, is the beneficiary of a discretionary family trust purported to be worth several millions of pounds.  Will the United Kingdom’s aggressive approach on how beneficiaries of trusts are to be treated have unintended consequences for him?  I ask the question because regardless of any input from lawyers, the level of understanding displayed so far in the interpretation and mechanics of trusts by many members of the Organisation for Economic Co-operation and Development has been abysmal. 

It is right and just that regulation demands protection from the fraudulent within the professional community, but one gets the idea that there are some functionaries in those bastions of officialdom scattered across the globe who might only associate “vest”, for example, with a garment worn under a shirt.

In France the trust is as popular with the government as the Duke of Wellington was with Napoleon Bonaparte and if George Osborne decided to retire there, his discretionary trust interest, regardless of whether he derives any future benefit from it, would nonetheless be required to be reported to the French tax authorities. 

Pulling Teeth

Words first uttered, as we know, can be important, just as first appearances are.  The Prince, Niccoló Machiavelli’s masterful treatise, which celebrated its quincentennial in 2013, labours the point and has had an influence ever since on political thought and culture, the elemental principle being that in the pursuit of power the use of immoral means can be justified.  Machiavelli told Raffaello Girolami, a diplomat and ambassador to the Holy Roman emperor, that “Occasionally words must serve to veil the facts.  But let this happen in such a way that no one becomes aware of it; or, if it should be noticed, excuses must be at hand to be produced immediately”. 

It is important to understand that whilst you can be master of your thoughts, once uttered, you become a slave of your words.  So of equal importance is lucid thought, before the tongue is engaged, in order to achieve Mark Twain’s imperative:  “I like the exact word, and clarity of statement, and here and there a touch of good grammar for picturesqueness”. 

Machiavelli had fallen from favour in 1512 when the Medici family returned to power in Florence and where he had held a post in the city’s chancery due to his close association with Piero Soderini, a prime Medici rival.  He was immediately removed and, linked with a conspiracy to overthrow the Medicis, was later imprisoned, tortured and subsequently placed under house arrest.  He died 14 years later in abject poverty, having written The Prince in the hope that he would gain favour and employment with the Medicis; they probably didn’t even read his book.

Without doubt, Francisco Franco, the late dictator of Spain, would have been a wise prince in Machiavelli’s eyes and needed no guidance from his book.  Here was a man who ruled his country for almost 40 years (1939-1975), and who contrived to create a myth about himself, appearing little in public and using rhetoric and reclusiveness to great effect.  He was impenetrable, sphinx-like, about whom his chaplain of 40 years once remarked that if he was cold, as many said, he didn’t show it and “In fact, he never showed anything”.  Anger and sorrow were rarely expressed, and he signed sheaves of death sentences over dinner with absolute indifference.  Adolph Hitler, after spending 9 hours with him, later told Benito Mussolini that he would rather have three or four teeth taken out. 

It was luck (which Machiavelli also wrote much about), boundless optimism and low cunning that served Franco well during his lifetime; he was 83 years of age when he died whereas Machiavelli had only been 58 years old.  Ironically, Machiavelli’s fellow Italian, Mussolini, like himself, also played his cards very badly, eventually being brought to heel, literally, to which a rope was tied to both of them as he hung suspended and was spat at by his countrymen in 1945.

Seiko and you Shall Find 

It is a good new year’s resolution to try and read a selection of well-chosen books, if you do not already do so.  I subscribe to the former French President Francois Mitterand’s conviction that “A man loses contact with reality if he is not surrounded by his books”; he never did, in political terms, and equalled Franco’s guile.  China’s former premier, Wen Jiabao, for instance, was a frequent reader of history, saying that it was like a mirror; and once again, as Mark Twain so aptly put it:  “The man who doesn’t read good books has no advantage over the man who can’t read them”.

Speaking of good books, it is also true that the contents, and not the cover, is always what counts, reminding us to be wary, in fact, of first appearances.  This caution has equal application when, for example, you are seeking professional help on where to either bank or invest your money.  It is true, for example, that many luxury watches are very attractive and expensive, but isn’t their prime purpose just to tell the time? And accurately.  44 Christmases ago, Seiko introduced its Quartz Astron 35SQ that was accurate to within one minute a year.  Tokyo may not have the same cachet as Geneva does, but it is also true that today an average, reliable Chinese watch costs US$2. 

Like the lure of what I describe as commercial cosmetics, a lot of people buy up-market Swiss watches not to tell the time, but to tell other people something about themselves; status and branding reign and the purveyors of perception are well aware of the seductive attraction of both.

One of my indulgences, and a testimony to the durability of quality, is to not only buy good books (a new year’s resolution that never changes) but to occasionally purchase some which are very old and are encased in lovingly-produced, hand-sewn covers.  But, again, two points should be made (and also considered in the context of finance):  it is the text wherein the true value lies, with the adornment only adding visual pleasure and nothing material.

I have bought most of my treasured volumes (some published at the beginning of the last century) from a bookstore in Oxford in the UK.  Originally established in 1879 on Broad Street, the tiny bookshop (12 square feet) now holds some 250,000 books with a very large, used books section where some real gems are to be found.  By excavating under neighbouring Trinity College Gardens an additional 10,000 square feet was made available.  I wonder if that advocate of quality, Mark Twain, visited the book shop when he was in Oxford? 

Trust, however, synonymous with integrity, has been the thread throughout this year’s final newsletter and Niccoló Machiavelli spoke and wrote a lot about it – as have so many contemporary bankers.  He found himself pursued by the Medicis, and the bankers today by regulators and depositors.  I read where a town crier, mounted on a horse and using a silver trumpet to attract the attention of crowds, was employed by the city of Florence earlier in the year to celebrate the 500th anniversary of The Prince.  This got me thinking.  It could be a good idea to employ the horseman’s services in New York and London to draw the bankers out of their bunkers with the sound of his trumpet and then publicly denounce them, just as Machiavelli experienced – although imprisonment and torture would not, of course, be entertained.

Offshore Pilot Quarterly has been published since 1997 by Trust Services, S. A. and is written by Derek Sambrook

13 December 2013

Jersey signs FATCA agreement with USA

An intergovernmental agreement between Jersey and the USA was signed at the US Embassy in London today (13 December). The agreement to improve international tax compliance and to implement FATCA (the US Foreign Account Tax Compliance Act) was signed by the Chief Minister, Senator Ian Gorst, on behalf of the Government of Jersey. The US Ambassador to the UK, HE Matthew Barzun, signed on behalf of the Government of the USA.

Senator Gorst said: “The signing of this agreement is further evidence of Jersey’s full commitment to the fight against tax evasion, and of our support of current international initiatives enhancing transparency and exchange of information for tax purposes. The OECD, at the request of the G20, is developing a single global standard for automatic exchange of information based on the US FATCA model and Jersey is also actively engaged in this process.”

Treasury and Resources Minister, Senator Philip Ozouf, said: “This agreement with the USA is of great importance for the many financial institutions in the Island with US interests. It will further strengthen the existing business relationships and will ensure that both existing and new business can be fostered free of the threat of the US 30% withholding tax, which would have otherwise been applied.”

After the signing of the agreement with the USA, which follows the signing of a similar agreement with the UK, the next step will be to issue guidance notes covering both agreements, on which the finance industry will be consulted. The States of Jersey will also be asked to ratify the agreements and make the necessary Regulations to bring them into effect.

Guernsey signs FATCA agreement with the US

Guernsey has today [Friday 13 December] signed a Model I intergovernmental agreement with the US Government in relation to the Foreign Account Tax Compliance Act (FATCA).

It was signed by Guernsey's Chief Minister, Peter Harwood, at the US Embassy in London with the US Ambassador to the UK, His Excellency Michael Barzun.

Guernsey's Chief Minister said: "Guernsey has been committed to exchanging tax information since it signed its first Tax Information Exchange Agreement (TIEA) with the US authorities in 2002. Today we have enhanced those arrangements, and in doing so we have further enhanced our reputation and our leadership position on tax transparency.

"This is a further step in the direction we have been travelling for a decade or more. FATCA is shaping the new global standards in information exchange and once again Guernsey has shown its commitment to meeting those new global standards decisively and at the earliest possible juncture.

"This is an important agreement for our finance sector. It gives them the long-term sustainability and stability that they have asked for clearly and consistently."

Jersey and the Isle of Man also signed similar agreements with the US Government at the same time as Guernsey.

Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the Island's finance industry, said: "I am very pleased that Guernsey has signed this FATCA agreement with the US. It builds on the TIEA we have had with the US since 2002, our adoption of automatic exchange of information under measures equivalent to the EU Savings Tax Directive in 2011 and the package of tax measures we signed with the UK Government in October.

"The OECD has continually reaffirmed that Guernsey adopts international standards of tax transparency and exchange of information and this FATCA agreement with the US further demonstrates our continued fight against tax evasion."

The FATCA agreement was concluded 48 hours after Guernsey's parliament gave its unanimous approval and committed Guernsey to continuing to meet the highest standards of tax transparency. At the same time, the Island's parliament also agreed to request the extension to Guernsey of the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Mauritius receives African Peer Review Mechanism Report

The Mauritius African Peer Review Mechanism Report following the conclusion of the country’s first review exercise was presented to the Minister of Foreign Affairs, Regional Integration and International Trade, Dr Arvin Boolell, yesterday afternoon in Port Louis.

Dr Mustapha Mekideche, member of the APR Panel of Eminent Persons and Lead Panel Member for the Mauritius Review Process, and Mr Dalmar Jama, Coordinator for Mauritius, APR Secretariat, handed over the Report to the Minister.  Dr Mekideche and Mr Jama also met APRM Mauritian stakeholders.

In his address during the ceremony, Minister Boolell said that implementing the Mauritius APRM Report is not only the business of Government but also that of all stakeholders hence it is necessary to ensure to get on board everyone from trade unions, civil society, to the private sector.  He emphasised that the essential feature remains governance which also incorporates political, economic and corporate governance.

According to the Minister a responsible approach is required for implementation as well as diligent actions coupled with ensuring that the shortcomings are addressed very forcefully and meaningfully.  The Report will be implemented on the basis of a well-established roadmap and a committee will be set up to oversee its implementation.

For his part, Dr Mustapha Mekideche observed that Mauritius has to be congratulated for its best practices in terms of governance.  We wish other countries, who are already members of the panel, to adopt such best practices and make the most of these.  He cited the important role of corporate governance which has enabled the country to progress and that of social governance including the health and education systems.  Dr Mekideche was hopeful that within a year the Prime Minister will present to his peers a report of implementation of the Mauritius APRM Report.

The APRM

The APRM, launched in 2003 as part of the New Partnership for Africa’s Development (NEPAD), is a self-monitoring tool voluntarily acceded to by Member States of the African Union (AU).

Its objective is to foster the adoption of policies, standards and practices leading to political stability, high economic growth, sustainable development and accelerated regional and economic integration through sharing of experiences and reinforcement of successful and best practice, including identifying deficiencies, and assessing the needs for capacity building.

As per the requirements of the Country Review Exercise in line with the Memorandum of Understanding signed by Mauritius and APRM, the Mission needs to have wide consultations with government officials, political parties, parliamentarians, representatives of civil society (including the mass media, academia, trade unions, business and professional bodies).

The Panel of Eminent Persons (APR Panel) oversees the conduct of the APRM process to ensure its integrity, considers review reports and makes recommendations to the APR Forum.

Mauritius was among the first States, along with Ghana, Kenya and Rwanda which volunteered to be the first four pilot countries to be peer reviewed.  The country acceded to the APRM through the signature of the Memorandum of Understanding on the APRM on 9 July 2003 during the meeting of the NEPAD Heads of State and Government Implementation Committee held in the margins of AU Summit in Maputo.

It is recalled that the Mauritius’ APRM Country Report was presented to the APRM Forum by the Prime Minister, Dr Navinchandra Ramgoolam, and peer reviewed on 24 July 2010 in Kampala, Uganda.

11 December 2013

Captive Review : Malta Report 2014

Compared with some of the more established European jurisdictions such as Guernsey, Luxembourg and Ireland, Malta is a relatively new captive domicile. Yet the island has proven to be a huge success in the captive world, boasting its position as the only EU domicile with fully fledged ICC and PCC legislation; an appealing tool for many managers looking to set up onshore.

10 December 2013

Nautilus expands into Mauritius

As part of its global growth strategy, Jersey based Nautilus Group, has opened an office in Mauritius. 

The addition of Nautilus Fiduciary Mauritius Limited to the Nautilus Group will see the company strengthen its team by 12, bringing the number of Group employees to 77. 

‘The creation of Nautilus Fiduciary Mauritius Limited will give our clients access to a greater pool of experts,’ said Jason Cowleard, managing director of Nautilus Trust Company Limited. ‘We are focused on delivering clients an exceptional service through a robust and dynamic regulatory framework, with access to multiple jurisdictions, and this move will help us to continue doing this. Our clients are increasingly globally mobile and by offering the same Nautilus service in multiple jurisdictions, we are best placed to meet their needs.’ 

Nautilus was incorporated in 1999 and has grown from a team of two to 65 through organic growth and a series of acquisitions, including the acquisition of New World Trustees (Jersey) Limited earlier this year. Nautilus is an independent trust company based in Jersey and boasts a client-focused team offering flexible solutions to clients around the world. The company specialises in the establishment and management of trusts and companies, and also offers an exhaustive list of comprehensive financial solutions to assist with wealth management. 

‘While we continue to explore our growth strategy and are looking at other international jurisdictions, it is equally important that we maintain our client focused working ethos. Our controlled approach to Nautilus’ expansion strategy over the last 14 years demonstrates the level of importance we place in maintaining our high levels of client service - our clients’ best interests are very much at the centre of our business strategy,’ added Mr Cowleard. 

Tim Bennett, director of Nautilus Fiduciary Mauritius Limited, added: ‘It is excellent news for Nautilus’ client base that the Group has expanded into Mauritius, the gateway into Africa. It is also great for Jersey, to have a brand with such a strong reputation as Nautilus, flying the flag for Jersey in this jurisdiction.’

Mauritius: FSC Releases Statistical Bulletin 2013

The Financial Services Commission (FSC) is pleased to announce the release of its sixth Annual Statistical Bulletin. Pursuant to section 6(j) of the Financial Services Act 2007, one of the functions of the FSC is to “collect, compile, publish and disseminate statistics in respect of the financial services and global business sectors.”

The Bulletin provides up-to-date figures on the sectors regulated by the FSC and presents a synopsis of current trends in the financial services sector (other than banking) in 2012 and 2011.

The total assets for the financial services sector (excluding companies holding a Category 1 Global Business Licence) rose from MUR 21 billion in 2011 to MUR 24 billion in 2012, representing an increase of 16%. 

The total income generated by the entities in 2012 amounted to MUR 4 billion which represented an increase of 8% over the previous year. The aggregate Profit after Tax for the financial services sector (excluding Companies holding a Category 1 Global Business Licence) reached MUR 674 million in 2012 compared to MUR 706 million in 2011.

Total assets of Corporate and Trust Service Providers amounted to USD 175 million in 2012 representing an increase of 11% over the previous year. Total income of Management Companies witnessed an increase of 5% from USD 397 million in 2011 to USD 417 million in 2012. Profits reported by Management Companies in 2012 stood at USD 48 million as compared to USD 40 million in 2011.

Gross premium received for Long Term insurance business stood at MUR 13.9 billion in 2012 with an increase of 7% compared to MUR 13.0 billion in 2011. For General insurance business, gross premium stood at MUR 6.18 billion compared to MUR 6.25 billion in 2011.

Total assets of companies in the long term insurance business stood at MUR 92.6 billion in 2012 compared to MUR 84.2 billion in 2011. For companies in the general insurance business, total assets stood at MUR 12.4 billion compared to MUR 11.7 billion in 2011.

Total (direct) employment in the financial services sector in 2012 was 5,819 as compared to 2011 which was 5,868.

06 December 2013

Jersey announces intention to launch aircraft registry in 2014

Jersey’s Economic Development Department has announced plans to establish a Jersey Aircraft Registry.

Following extensive analysis and consultation, the Minister for Economic Development Senator Alan Maclean has now given approval for the Registry, which is due to be launched in summer 2014 and is expected to open up a range of new business opportunities for the Island.

The Registry is anticipated to be particularly attractive to internationally mobile business jet owners, who can benefit from registering their aircraft in a highly regarded, stable and well regulated jurisdiction, whilst making use of Jersey’s mature, robust and sophisticated financial, legal and fiduciary services infrastructure. Local aircraft owners will also be welcome to register their aircraft on the Registry.

Policy relating to the structure of the Registry has been developed through a private sector working group, chaired by Assistant Minister for Economic Development Deputy James Baker and composed of leading aviation experts. Having now received instruction to proceed, the Law Draftsman’s Office will begin drafting the legislation that will underpin the Registry.

In addition, Economic Development have invited Brian Johnson, Director of Operations for Appleby Aviation Ltd and former Director of Civil Aviation for the Isle of Man, to advise on the establishment of the Aircraft Registry.

Commenting on the new plans for the Jersey Aircraft Registry, Senator Maclean said:

This is an exciting opportunity for Jersey which will form an incredibly strong additional element to our inward investment strategy. Thanks to its business friendly environment, simple and attractive tax framework and world class professional and financial services infrastructure, Jersey already offers a compelling proposition to individuals and companies looking to relocate or expand their businesses. The launch of the Jersey Aircraft Registry will undoubtedly add to Jersey’s overall offering and provide local businesses with significant opportunities, particularly in the fiduciary, legal and financial services arenas.

It is also fantastic news that Brian with his many years of experience in the aviation industry, and especially in the establishment of another very successful registry, Jersey will have an individual with unparalleled expertise to advise on this exciting project.

India: Clause to avoid Mauritius treaty abuse

Indian and Mauritius authorities engaged in renegotiating the tax treaty between the two countries have agreed to include a "limitation of benefit" (LOB) clause to prevent any misuse of the beneficial provisions of the tax treaty. The insertion of the LOB clause—an anti-abuse provision which limits the ability of third country residents to obtain benefits under a tax treaty between two other countries— had been a long-standing demand from India.

03 December 2013

Offshore Investment ( December 2013 / January 2014): Why should Chinese HNWIs wishing to establish offshore trusts act now?

China produces more millionaires and billionaires than any other country. Chinese high-net-worth-individuals (HNWIs) generally have great interest in using offshore trusts for wealth planning as a result of the unique benefits offshore trusts can offer coupled with the fact that Chinese domestic trusts are not suitable for wealth planning. One of the common questions I hear from my clients is “when is the best time to establish an offshore trust?” My standard response in the past was “it depends”. However, given certain recent developments in China relating to the next wave of tax reform, perhaps it is advisable to act immediately in order to avoid the adverse consequences caused by such tax reform. So what are these new developments?

Offshore Investment ( December 2013 / January 2014): 2014 - What in the world is going to happen?

If 2013 was a year of resilience in Western economies, 2014 could be a year of proper recovery. Christian Schulz reflects on what will happen in 2014 and observes that as the developed world finally emerges from the aftermath of the greatest recession since World War II, it may finally be time to say "Good bye Lehman".

IFC Review - Blood, Sweat & TIEAs: Tax Information Exchange Litigation in Bermuda

Alex Potts and Amy Murray discuss Bermuda’s global tax information exchange network, which brings into question the decision of the French Government to add the jurisdiction to its tax ‘blacklist’.

IFC Review - Niche Products Help Differentiate The Bahamas

Aliya Allen discusses how The Bahamas remains one of the most agile financial centres, responding to client needs with ground breaking products such as the Bahamas Executive Entity (BEE).

IFC Review - Islamic Finance Securitisation in Luxembourg

Vassiliyan Zanev examines the success of Luxembourg as an Islamic finance hub, with its flexible, tax efficient regime and significant number of Shari’a vehicles incorporated in the jurisdiction.

IFC Review: Due Diligence - Social Media

Burke Files discusses due diligence in the digital realm of social media, its increasing use as a tool to check up on job and college applicants and asks what could people share online to make them more or less desirable.

IFC Review: The Rule in Hastings-Bass Under Jersey Law

Mason Birbeck examines the rule in Hastings-Bass, as applied under Jersey law, which has its origins in the English courts and has been a hot topic among those working in the Jersey fiduciary sphere.

IFC Review: Dispelling the Offshore Myth

Ingrid Pierce and Grant Stein discuss transparency, the industry buzzword of the past year, and why IFCs can be less defensive about their role in the global economy going forward and more vocal about their attributes