After months of public silence and private hand-wringing, Antigua’s financial services sector finally responded (albeit obliquely) to the small matter of an alleged $8bn Ponzi scheme being operated in their midst.

Enter the International Financial Service Providers Association of Antigua and Barbuda, or FISPAA, which will “work with the government to promote Antigua to the global investment community as a sound, competitive and well-regulated financial services jurisdiction comparable to any financial services jurisdiction in the world”, according to a press release issued today.

Extracts:
The newly formed association is comprised of top executives from international banks and trust companies, attorneys, accountants, investment managers and advisors. In its capacity, the association will monitor existing laws and procedures to ensure complete enforcement of regulation as well as adapt new policies and procedures in response to evolving issues impacting the world of international financial services. Additionally, existing legislation will be monitored to ensure that competitiveness is maintained and to the extent that it is considered to be expedient, the association will propose recommendations for new legislation.

Antigua and Barbuda has recently enacted legislation under the Antigua International Trust Act, International Foundations Act and International Limited Liability Companies Act, and the Corporate Management and Trust Service Providers Act.  This new legislation offers the world’s most stringent and structured environment for international asset protection and wealth preservation.

“Antigua and Barbuda is committed to ensuring that the international financial services industry, including investors, is recognized for its commitment to high standards in financial services regulation,” said Antigua’s Honorable Minister of Finance Harold Lovell. “Antigua and Barbuda was one of the first jurisdictions to enter into bilateral agreements concerning exchange of information contingent upon certain procedural requirements being met. Antigua and Barbuda will continue to comply with international best practices to ensure the maintenance of the integrity, soundness and transparency of its international financial services sector.”

This move is, if anything, also a (belated) response to the increasing international disdain for offshore tax havens; viz recent statements by the OECD, the G20 and the Obama administration.

It also comes less than two months after Ken Rubinstein – a NY-based attorney and specialist in “wealth preservation” and the author of those stringent trust and financial services laws referred to above – met with a clutch of the island’s most prominent financial services executives.

Back in March, Mr Rubinstein told the FT (over the blare of reggae music on the terrace of the Jolly Beach hotel):

What Antigua needs is a well-organised campaign that reassures the public of the integrity of the Antiguan banking system. We have to restore the credibility of Antigua as a financial jurisdiction – and this restoration is going to be a gradual process.

We are in a very dangerous environment, legislatively and economically

Mr Rubinstein was referring to the increasingly vocal chorus of criticism directed against perceived tax havens like Antigua, and to the fact that so much of Antigua’s economy is dependent on financial services.

The island has already had to contend with the collapse of its banana industry in the late 1990s after a series of devastating hurricanes, and more recently with a fall-off in tourism as recession-hit holidaymakers opt for cheaper destinations closer to home. The allegations against Sir Allen Stanford – the island’s largest private-sector employer – were a further, unwelcome hit to its economy.

The allegations also sparked questions about whether Antigua’s regulators were, in fact, up to the job of overseeing the 18 international banks licensed to operate on the island. In short, as Mr Rubinstein put it, for a country that has pinned its economic hopes on financial services,

The Stanford matter came at the worst possible time

Related links:
The G20 and tax haven hypocrisy – The Economist

This entry was posted by Stacy-Marie Ishmael on Monday, April 27th, 2009 at 21:57 and is filed under Capital markets. Tagged with Antigua, Sir Allen Stanford. Edit this entry.