An analysis of how this Carribean centre thrived despite the gale forces of a global economic ill wind.
Antigua and Barbuda, a favourite destination in the Eastern Caribbean for both tourism and international financial services, is not unscathed by the current economic downturn being experienced in the world’s major financial centres. Whilst it is generally true that when the major developed world markets sneeze, the small island economies in the Caribbean catch a cold, there are peculiar circumstances to this financial crisis that largely point to concerns over the standards for banking regulations, audit inspections and business rating services that operate specifically in those major world markets. The impact on the global economy is changing the way large financial institutions must operate, and is opening doors for banks located in small jurisdictions that have had nil impact from the toxic sub-prime mortgage debt to support financial market integration.
Antigua and Barbuda has the infrastructure to respond to the special business needs and financial services not only of the Caribbean, but of an international clientele.
A Regulatory Environment for Investment
The jurisdiction has a robust mutual legal regime which facilitates a transparent process under which information may be exchanged. It will not allow itself or its banks to be used as a secret tax haven and recognises the requirements for tax compliance and anti-tax fraud policies. It was one of the first Caribbean jurisdictions to establish a Tax Information Exchange Agreement (TIEA) with the United States (US), and has held tax treaties with the United Kingdom (UK) and the Caribbean Commonwealth Community for many years. It fully anticipates the successful completion of more than a dozen TIEAS by the last quarter of 2009, which would make it fully tax compliant with the requirements of the Organisation for Economic Cooperation and Development (OECD).
Mutual legal assistance in anti-money laundering (AML) and financing of terrorism matters is also provided for under the Mutual Assistance in Criminal Matters Act (MACMA). The MACMA provides for mutual assistance for all countries that are members of the British Commonwealth, the US and for other countries for which Antigua and Barbuda has signed mutual legal assistance treaties (MLATs). There is no legal or practical impediment for rendering assistance where both countries criminalise the underlying offence.
The jurisdiction also benefits from being a member of the Egmont Group through Antigua’s supervisory authority, the Office of National Drug and Money Laundering Control Policy (ONDCP), which assists communications between Financial Intelligence Units to prevent money laundering and the financing of terrorism.
The regulatory environment of banks providing international financial services is strongly supervised for the safe and ethical deposit of foreign currencies and the delivery of wealth management solutions. The jurisdiction undergoes regular peer evaluation by the Caribbean Financial Action Task Force (CATCF) as well as reviews by the World Bank and the International Monetary Fund (IMF), all of which satisfy the enhanced scrutiny given to international banking. Banks are licensed and regulated by the Financial Services Regulatory Commission and must maintain internal policies to govern compliance with international standards. These requirements include annual third-party audits of their AML and anti-terrorist financing (ATF) practices and must be submitted to the ONDCP and the Commission for review. The banks are dependent on good correspondent banking relationships located in major financial centres and are therefore also subject to the host country’s sovereign rule and policies.
In October, 2009, the Caribbean Association of Indigenous Banks launched a code of standards, known as the Caribbean AML/CTF Principles, which will assist its member banks in the region to support the integrity of their correspondent relations. Annual financial audits are mandatory and are conducted by resident offices of well recognised firms including PriceWaterhouseCoopers, PKF and KPMG.
The combination of well-regulated financial services, world class communications, an English-speaking and skilled workforce and strong professional resources offers a positive environment for electronic and international business services. Antigua provides ideal support for information technology services and internet-driven business opportunities that demand more sophisticated financial services.
The Antigua and Barbuda Investment Authority established by the government assists the investment process and identifies related incentives for certain investment categories. Modern financial services include internet banking, telephone banking, wire transfers in major currencies, corporate and trust administration, pension and fund management, payroll services, electronic commerce facilities that allow online sales of international services and products and the development of multi-functional stored value debit cards. These are powerful financial tools that enable business people to compete in an international and open market environment.
The remarkable growth of the internet is impacting economies around the world, and Antigua is no exception. As an independent nation, it is well positioned to attract international business for electronic commerce. The government has passed the relevant legislation to govern e-commerce, the Electronic Transactions Act, and also to control abuse of electronic systems and protect the safety of online activity. The government is also committed to operate as an e-government and has positioned Antigua to become a leading Caribbean IT centre.
Antigua has become attractive to international investors seeking private banking services and wishing to balance their portfolios with strong fixed income returns and foreign exchange trading, and who are interested in property investment in the jurisdiction. Increasingly, investors have been purchasing properties in Antigua and Barbuda as vacation and second homes.
These investments also qualify them for Permanent Residency, and they can obtain advice from any of the major local accounting firms such as PriceWaterhouseCoopers, PKF, KPMG or their own advisory resources for tax planning arrangements. Several major real estate developments are being undertaken in Antigua and Barbuda, and interest from international investors has been significant. The international banks have been supportive to investors pursuing local real estate and tourism projects.
Business persons who demand efficient international banking will appreciate the services offered in Antigua. Internet banking provides 24/7 access to view account activity, establishes bill-payments and standing orders and initiates wire transfers and other necessary communications to the bank. To further assist and maintain financial control over accounts, related card products linked to customer accounts that permit access to funds around the world at banks, merchants and ATMs are available. Strong and secure communications defy geographic constraints by putting the bank branch in your backyard and full banking services at your fingertips.
Antigua’s International Financial Centre
Antigua’s International Financial Centre is committed to meeting the requirements of modern business and is well regarded in the surge of global demand for financial solutions for international business, wealth management and e-commerce services. It is redefining the role of international banking relationships and complimenting global business opportunities that need financial solutions. The combination of well-regulated financial service providers and the ability to offer modern financial services in a stable environment makes Antigua and Barbuda a premier location for doing global business.
Brian Stuart-Young, Chairman & CEO, Global Bank of Commerce, Ltd., Antigua, W.I.