135/01
3 December 2001
REVIEW OF FINANCIAL REGULATION IN THE CARIBBEAN OVERSEAS TERRITORIES AND BERMUDA:
IMPLEMENTATION OF PRIORITY RECOMMENDATIONS
The UK Government commented on the progress and commitments which the Caribbean Overseas Territories and Bermuda have made in bringing in anti-money laundering frameworks, independent regulatory authorities and investigative powers to assist enquiries by overseas regulators on Friday 30 November.
Commenting upon the progress which the Overseas Territories have made in the year following publication of a report into their financial regulation standards and the commitments which they have made to implement those recommendations, Ruth Kelly, the Economic Secretary to the Treasury said:
?In the year following publication of the KPMG report the Caribbean Overseas Territories and Bermuda have made good progress in implementing measures in our three agreed priority areas."
"I welcome the fact that all the Overseas Territories now have comprehensive anti-money laundering frameworks fully in place. As regards the introduction of compulsory powers to obtain information to assist foreign regulators, again good progress has been made in providing the necessary legal basis for such co-operation. The Cayman Islands, the British Virgin Islands, the Turks and Caicos Islands, and Montserrat have already introduced relevant provisions. Indeed, valuable practical assistance has already been provided by several territories in helping to combat cross-border regulatory abuse. In the case of Anguilla, legislation is in hand that will allow regulatory cooperation. In Bermuda the existing regulatory powers need to be strengthened.
?At the same time, considerable progress has been made in establishing independent regulatory authorities. The Turks and Caicos Islands have introduced legislation to establish an independent authority, and legislation is in an advanced stage in the British Virgin Islands, Anguilla, and Montserrat. Bermuda already has an independent authority for banking and securities; it is now proceeding to complete this process for the insurance sector by the end of 2001. Cayman expects to enact relevant legislation in the first quarter of 2002.?I am also glad that the Caribbean Overseas Territories and Bermuda have made a commitment substantially to implement the remainder of KPMG's recommendations by the summer of 2002. They have agreed to publish further progress reports by February 2002 explaining how their implementation plans are progressing. This should place them in a strong position prior to their forthcoming examination by the International Monetary Fund under the Financial Stability Forum's initiative into offshore financial centres.
?The UK will continue to work closely with the Overseas Territories on the implementation of the KPMG recommendations with a view to helping them meet international standards in full.?
Baroness Amos, Foreign Office Minister for the Overseas Territories, noted:
?The last year has been an extremely busy period for the Overseas Territories. We welcome the strongly stated commitment of the governments of the six Overseas Territories reviewed by KPMG to meet international standards and good practice. There is still work to be done. But I welcome the positive steps that have been taken to strengthen their financial regulation and to ensure that regulators have the resources and funding necessary to enable them to operate effectively. In this way, and through continuing close engagement with the standard-setting bodies such as the FATF, Basle Committee and the IMF, they can ensure their position as co-operative international financial centres is fully recognised.
?The tragic events in New York and Washington on 11 September remind us of the need for continuing vigilance. The Overseas Territories have pledged to play their full part in the international efforts to close off financial networks to terrorism as effectively as dealing with other types of serious criminal activity. I know that we will be working closely with the Overseas Territories over coming months to ensure that all necessary action is taken; and the United Kingdom will continue to provide such assistance and support to individual Overseas Territories as may be required. I look forward to seeing continued rapid progress in dealing with the remaining KPMG recommendations, and to early completion of this process.?
NOTES TO EDITORS
1. In 1999, the UK, the Caribbean Overseas Territories - Anguilla, British Virgin Islands, Cayman Islands, Montserrat and the Turks and Caicos Islands), and Bermuda jointly commissioned an independent in-depth review by KPMG into the Overseas Territories? compliance with international standards and best practice of financial regulation, including in the field of anti-money laundering.
2. This review was published on 27 October 2000, when the Overseas Territories also made a commitment to implement three priority measures by the end of September 2001. These were the establishment of independent regulatory authorities; the introduction of investigative powers to assist enquiries by overseas regulators; and the establishment of comprehensive anti-money laundering frameworks. In addition the Overseas Territories published their responses to the KPMG report on 8 February 2001 explaining how they planned to respond to KPMG's other recommendations.
3. Further details of the KPMG review and of the commitments made by the Overseas Territories to implement KPMG's recommendations are set out in a Treasury press notice of 27 October 2000. Further details of the Overseas Territories? responses to the KPMG review are set out in Treasury press notice 11/01 of 8 February 2001.
4. Press enquiries should be addressed to Peter Connolly, News Department FCO on 020 7270 3909 or Liane Farrer, HM Treasury Press Office on 020 7270 5192.