St Helena : St Helena Policy on Financial Services and Money Laundering
Submitted by Saint Helena Herald (Juanita Brock) 24.06.2008 (Article Archived on 08.07.2008)
Ordinances dealing with these subjects have been under consideration for some time. Public consultations on the initial proposals were held in January and final drafts to be submitted to Legislative Council are now available.
Financial Services and Money Laundering
Ordinances dealing with these subjects have been under consideration for some time. Public consultations on the initial proposals were held in January and final drafts to be submitted to Legislative Council are now available. An outline of the provisions of each Bill is set out below. These should be taken as general guidelines, rather than an attempt to interpret the whole of each Bill.
Financial Services
This is an Ordinance which covers all types of financial services including banks. The provisions of the Banking Ordinance 2003 have been carried over into this Ordinance. All the provisions of that Ordinance have been included in the new Ordinance, so there will be no effect on the way in which the Bank of St Helena is managed or supervised.
In essence the Ordinance requires anyone running or proposing to run a financial services business in or from St Helena to apply for a licence. The definition of financial services for this purpose is long and complicated. Details are set out in the Schedule to the Bill. As far as we are aware the only organisations currently operating in St Helena who will require a licence are : The Bank of St Helena (theirs will automatically be carried over from the previous provisions), Solomons insurance branch, the Government Cash Office and anyone in the business of providing financial advice. To be covered by the Ordinance you must be operating as a business which is providing one or more of the financial services specified in the schedule. There are exemptions for solicitors and accountants providing financial advice where this is incidental to the provision of their primary service. Simply giving financial advice to your friends is not covered (unless you charge them for it).
The Ordinance provides for the establishment of a Financial Services Regulatory Authority which will subsume the duties of the current Banking Supervisory Authority. Members of this Authority will be appointed by the Governor.
Anyone conducting a relevant business will be required to obtain a licence from the Authority within three months of the Ordinance coming into force.
The criteria for granting a licence will be :
That all those persons involved as shareholders/owners, directors or managers are “fit and Proper”. This means that they will have to demonstrate that they have appropriate experience and training for the role they intend to perform and have no convictions for fraud etc.
That the business has adequate resources for the nature and scale of its proposed operations.
Anyone being granted a licence will only be allowed to provide services to customers who meet one or more of the following criteria:
(a) Have Saint Helenian status
(b) Have a current entitlement to undertake paid employment on St Helena
(c) Own land in St Helena
(d) A dependent relative of any of the above
(e) A business registered in St Helena
(f) A Saint Helena based voluntary organisation
(g) Someone who has been granted Approved Investor Status under the Economic Development Ordinance 2006
(h) A UK Government Official with responsibilities for Saint Helena
Once licensed an organisation will be subject to ongoing supervision by the Financial Services Regulatory Authority. The nature and extent of this supervision will be determined by the nature and scale of the licensed business.
The Regulatory Authority will be given powers to investigate suspected breaches of the legislation and possible infringements by licensed institutions.
Money Laundering
This Ordinance will make it illegal for anyone to get involved with “Criminal Property” in any way. Criminal Property is defined as property derived in any way from criminal activity. Although money laundering is normally thought of in terms of handling cash proceeds from crime it also covers all other types of property. So for example if someone used cash derived from drug dealing in the UK to buy a house in St Helena that house becomes “criminal property”.
The specific offences dealt with in the Ordinance are :
Dealing in criminal property (buying , selling etc)
Concealing or disguising criminal property
Making arrangements for the acquisition or retention of criminal property
Acquisition, use or possession of criminal property
Tipping off – i.e. disclosing to a suspect that an investigation might be conducted.
The Ordinance will establish a Money Laundering Reporting Authority (MLRA) to be chaired by the Financial Services Supervisor and to include representatives of the Police, Customs, Legal and Lands and SHG Finance Department.
Anyone reporting a suspicious transaction to the MLRA will not be committing an offence provided they do so as soon as possible. Certain types of business will be subject to specific requirements relating to the opening of customer accounts, training staff and monitoring transactions. These are all financial institutitons, estate agents, accountancy and audit services, legal services and dealing in goods where a transaction involves a cash payment of £10,000 or more.
A Directive will be issued which sets out the specific requirements for these businesses.
The Ordinance will give Police and Customs Officers powers to search for criminal property, to seize cash which they suspect is criminal property and to seek account monitoring orders in relation to a suspect’s bank account. The courts will have the power to order the seizure and / or forfeiture of suspected criminal property. Provisions are included to protect the assets of individuals who might innocently get caught up in money laundering.
Timing
It is intended that the Ordinances will be put to LegCo in September and be implemeted by the end of the year.
Comments on these proposals should be sent to the Clerk of Councils no later than 31 July 2008.
Further Information
If you would like further information on these proposals or wish to clarify the implications for your business email Alan Savery – alan@windlefarmcottage.co.uk or contact the Attorney General.
Issued by the Banking Supervisor
June 2008.
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