News from Anguilla.14 May 2000. Issue #15
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LATEST NEWS FROM ANGUILLA....
Anguilla has settled into its inter-seasonal torpor, although some of the hotels are still
reporting decent occupancies and some restaurants are still doing quite well. The
combination of Easter coming late in the calendar meant that Easter-vacationers were able
to take advantage of the off-season hotel rates, and this trickled down to the bank
accounts of the car rental companies and gift shops. The way in which the profane world is
going, it cant be long before the markets put the squeeze on the Church to make
Easter a fixed feast (coinciding with the second Sunday following 15 April) instead of all
this "confusion" about full moons after the Vernal Equinox! This annual period
of sluggishness (between the High season and the mini-season in July/August) is
nevertheless a welcome break, and those who are fortunate to be able to vacation then find
the beaches relatively (more) deserted and everyone even more laid back. Recent Headlines
from the local media tend to reflect this "parish-pump" quality of news:
Much concern at the level of violence at the local Secondary School, both during and
after school hours. The extent of this is a matter of grave concern in this peace-loving
community and parents are being warned to rein in their offspring. Minister of Education
& Youth Reid addressed a youth rally and protest march and warned that, as part of the
general crackdown, personnel from the Police and Community Development & Welfare will
be visiting night clubs and other places of entertainment and snatching any under-agers
found there. [Wild Cheers from crowd]. Parents and Guardians are therefore urged to get a
grip on their kids to save themselves the embarrassment. General lack of control put down
to parent(s) going off to work leaving offspring unsupervised, too much TV (with its heavy
US-influenced diet of violence), too much hanging out with the wrong types. Stories like
this would be familiar to local newspaper readers almost anywhere else in the world, but
they are still worrying in Anguilla.
Local Beautification Club put on a wonderful 2-day flower show.
Various Societies holding meetings or AGMs.
Sad news: a couple of death announcements. Popular former Attorney General, Deputy
Governor and Governor of Anguilla Alan Hoole (who had successfully appeared to have fought
back against leukemia) who was still involved with Anguilla in advisory capacities
regarding constitutional reform as well as the marketing of the jurisdiction as an
international financial services centre. On Monday, 8 May, he was enjoying a walk in the
Yorkshire Dales with his wife, Delia, but lost his footing on a path which was at least 75
feet above a stream; he somersaulted 60 feet before hitting a tree which stopped him
falling further. After attending to him, she raised the alarm and paramedics and mountain
rescue teams arrived. He had to be lowered a further 15 feet to be airlifted in a Sea King
helicopter but, before this could happen, he was given oxygen and fluid. Unfortunately, he
died of multiple injuries before he could be airlifted.
Rev. Raphael Lake passed on, 9 May, aged 88, after a long illness. Just before the
Anguilla Revolution, he ran the Welfare Office single-handed, distributing relief funds to
those in need. After the events of the late 60s, he was able to get the
Department better organised and also served for a while as Magistrate. For a while he was
Commissioner of Scouts and returned to Anguilla after studying at the Anglican Seminary in
Barbados, as assistant priest. Among his children is local lawyer and service provider
The local cricket team kicked off (wrong metaphor) the Leeward islands Cricket
Tournament this weekend. They hosted volcano-ravaged Montserrat in a 3-day match followed
by a 1-day match. Anguilla are the defending 1-day champions no mean feat
considering that their competition consists of places like Antigua, Nevis & St. Kitts,
each of whom provide players for the national squad.
No political news as such. Indeed, the politicians, at first blush, appear to be on
cordial terms although nobody expects the eagle to fly with the dove indefinitely!
CLIPPINGS FROM MAGAZINES AND NEWSPAPERS
As is always the case, the following contains material
which is courtesy of various publications (who also hold the Copyright) please
contact them for subscriptions (if you cant locate them, well be happy to
The next xxxx are courtesy of "Offshore Finance Canada" as well as the
GRENADA BANK UNDER INVESTIGATION (also allegedly a massive scam)
Date: Apr. 18, 2000 Source: Associated Press
Would you believe in an offshore bank that can deliver investor profits of 250 % and
trumpets annual revenues of $26 billion? First International Bank of Grenada -- a magnet
for hundreds of Americans willing to part with millions of dollars - claims to do just
Grenada's offshore industry regulator, Michael Creft, says he doesn't know whether the
bank's claims of $26 billion in gross income in its first full year of business last year
are true. That would put it roughly on par with Chicago-based Bank One Corp., the
fifth-largest bank in the United States, with 1999 revenue of $26 billion.
Creft said First International Bank has made good on promises to pay up to 250 percent
interest, but he didn't know how the bank does it. As a result, the local government is
investigating charges of illicit practices by First International Bank, which has also
drawn the notice of U.S. authorities.
"There is an ongoing investigation being coordinated with the FBI through the U.S.
Department of Justice,'' said Nancy McGuire, spokeswoman for Premier Keith Mitchell, who
has repeatedly defended the bank. "They have
already provided us with some information which has caused us to request information from
the bank, and the investigation is continuing.'' Creft said the investigation included the
possibility of money laundering.
``First International Bank of Grenada makes a mockery of the island as a legitimate
financial centre,'' wrote Offshore Alert, a leading Miami-based industry newsletter being
sued by the bank's owners for libel.
Grenada officials say the bank was capitalized in this former British Caribbean colony on
the strength of a jeweller's $20 million appraisal of one ruby. They confirm its founder
once went broke in Oregon, bought a Grenada passport and changed his name. And its
reported income remains hotly contested.
The bank, licensed in Grenada in October 1998, is owned by Van A. Brink, who was called
Gilbert Allen Ziegler when he lived in Oregon and declared bankruptcy in 1994, according
The bank fired an external auditor last year after a disagreement over its practices.
In a letter made available to The Associated Press, Lauriston Wilson, the auditor, wrote
to the prime minister saying he had "suspicions that the bank's assets were bogus and
fictitious." Creft said a subsequent, external audit presented by the bank was
conducted by an "unqualified" American, who had been ordered not to practice in
some U.S. states. Creft said he was going to order another audit.
Defenders say the bank pays up, and is simply an original-minded player in a dynamic
global economy. Critics suspect pyramid schemes and money laundering, and see it as a
symbol of the dangers of poorly regulated
Every month, First International Bank pays for hundreds of Americans to come to the island
and woos them at upscale beach resorts with lectures on the evils of U.S. taxation, Creft
said. Prospects are assured their money
is insured by the International Deposit Indemnity Corp. -- a small private operation that
was closed down by regulators in the tiny island of Nevis a year ago, was again shut down
in Dominica and now operates here.
ANTIGUA URGES US, UK TO LIFT WARNING ON OFFSHORE BANKS
Date: Apr. 26, 2000 Source; Financial Times
Antigua is urging the US and UK governments to lift their official warnings to businesses
against using Antiguan offshore banks. The move comes after Antigua agreed to new United
Nations measures against money laundering through its offshore financial sector.
The UN measures require offshore financial jurisdictions to enact legislation on money
laundering, fraud investigation and persecution, and improve their record keeping and
their ability to investigate suspicious
Regulators in the US and the UK have claimed the government's oversight abilities are
inadequate. The UK treasury said it was concerned about the "independence and
integrity" of Antigua's financial regulation system, and
a US State Department report stated that Antigua's government was under threat from
wealthy individuals who used their influence to weaken the island's money laundering and
offshore business legislation.
Ronald Sanders, Antigua's high commissioner to the UK, said his government now has some of
the strongest anti-money laundering legislation in the world. Sanders said he expects the
UK to lift the warning within the next
three months, following evidence that the Antigua regulatory authority has the funds and
the personnel to carry out its work effectively.
The Antigua government said in November that it had uncovered a money laundering scam
allegedly operated by Pavlo Lazarenko, a former Ukrainian prime minister.
FORMER BEAR STERNS EXECUTIVE BARRED FROM SECURITIES INDUSTRY
Date: Apr. 21, 2000 Source: New York Times
Richard Harriton, the former chairman of the securities clearing subsidiary of Bear
Stearns, will pay $1 million in penalties and be barred from the securities industry under
a settlement disclosed yesterday by securities regulators.
The settlement, which ends a civil fraud lawsuit brought by the US Securities and Exchange
Commission last August, says Harriton is barred from conducting business in the securities
industry for life, though he may reapply to regulators after two years. Harriton settled
the suit without admitting or denying the accusation.
The SEC's suit against Harriton, 65, followed a three-year investigation into the failure
of A. R. Baron, a New York brokerage firm, which defrauded investors of $75 million before
it closed in 1996. The Bear Stearns Securities Corp., a subsidiary of the Bear Stearns
Companies run by Harriton until last August, cleared A.R. Baron's trades and provided it
with the capital it needed to operate.
The SEC said that Harriton's actions had substantially assisted the overall fraud
conducted by A.R. Baron by allowing it to stay in business when it lacked the necessary
capital to operate.
In a separate civil suit, the SEC accused Bear Stearns of helping A.R. Baron commit
securities fraud by financing its operations even in the face of overwhelming evidence
that the smaller firm was defrauding its customers. Bear Stearns settled the suit without
admitting or denying the charges and paid $38.5 million in fines and restitution.
Harriton may also find himself drawn into another federal securities fraud case against
Mr. Randolph Pace, who is under indictment and awaiting trial in Federal District Court in
Manhattan. The case involves another brokerage firm that Bear Stearns cleared trades for,
Sterling Foster, which defrauded investors of $100 million before it closed in 1997. Pace
and Harriton have been friends for years.
TRINIDAD BANKS TO DEAL WITH CONFIDENTIALITY BREACHES
Date: May 3, 2000 Source: CANA News
Trinidad and Tobago's commercial banks are prepared to fire employees for breach of
confidentiality regarding the details of clients' accounts, says president of the Bankers'
Association, Ronald Harford.
His comments follow the recent arrest of a bank teller in connection with the kidnapping
of one of the bank's customers, Camille Bobart. The teller, who was held at the
Westmoorings house where Bobart was rescued, is said to have passed on the details of
Bobart's account to a San Fernando businessman involved in the kidnapping.
Bobart, 23, was kidnapped because her family was wealthy, police said.
Stressing that the investigation is not yet complete, Harford, who is also managing
director of Republic Bank Ltd., said customer confidentiality is "heavily
emphasized'' at all banks. He said banks have "systems of controls, processes and
procedures'' in place to deal with such breaches.
As a matter of policy, he said employees are required to sign an annual declaration of
secrecy that is rigidly enforced.
BAHAMAS' OFFSHORE TAX HAVEN STATUS UNDER THREAT
Date: May 2, 2000 Source: The Guardian
The Bahamas' multi-billion dollar offshore tax haven status remains under threat, as OECD
countries, complaining that tax dollars are disappearing into offshore jurisdictions,
continue to clamor for reform.
Organization for Economic Cooperation and Development (OECD) countries are edgy about
jurisdictions like the Bahamas, Ian Fair, chairman of the Bahamas Financial Services Board
"The biggest threat that we face is this whole question of the OECD on behalf of
taxation, where they are threatening to impose upon all the off-shore tax havens,"
"The on-shore countries feel threatened by a loss of their tax base. They believe it
is disappearing into the offshore tax havens and they are trying to combat it. They are
lashing out at jurisdictions like The Bahamas," he said.
While a compromise is needed, Fair said, "we maintain that we are not a harmful tax
regime. We are an alternative tax regime."
Fair, who played a key role in repositioning the Bahamas on the international financial
scene, said a compromise could be reached through careful negotiations.
"There may have to be changes in some of our legislation," Fair predicted.
The legislation governing international business companies (IBCs) might need a second
look, he suggested.
The scope of the OECD's demands could be very far reaching and have severe implications
for the economies of offshore jurisdictions like the Bahamas and the Cayman Islands.
Offshore business accounts for some 58% of the country's gross domestic product (GDP). GDP
refers to the total value of goods produced and services provided in a country in one
INDIA UNVEILS TAX BREAKS FOR OFFSHORE FUNDS
Date: May 4. 2000 Source: Financial Times
India has announced proposals to relax the tax regime for venture capital funds, a key
conduit for overseas investment in India's information technology industry.
In his annual budget in February, finance minister Yashwant Sinha said venture capital
funds would pay only a single 20% tax on income distributed as dividends. Earlier, venture
capital funds paid a capital gains tax as well as the tax on dividends.
Mr. Sinha also said he would broaden the tax exemptions associated with free-trade zones
and software technology parks. In addition, pharmaceuticals and biotechnology would enjoy
a 10-year tax holiday on earnings from research and development.
DOMINICA TO RESUME PASSPORT SALES
Date: Apr. 28, 2000 Source: Financial Times
The Dominican government will resume the controversial sale of its passports to
non-nationals, a practice suspended when it took office in February. The move will
probably be viewed with concern by the US and Canada, which have said the program was
being abused by international criminals and provided a cover for illegal migration.
The "economic citizenship" program, started by the previous government of this
eastern Caribbean island, was often criticized by Rosie Douglas, the current prime
minister, who suspended it when his coalition government took office. However, it is being
resumed after a review by the new administration.
Finance Minister Ambrose George said changes were made "to ensure that citizenship
does not fall into the hands of criminals." But George did not say what the changes
were and when the sale would be resumed. Under the old program, non-nationals received a
passport for an "investment" of $50,000.
According to the US State Department, members of the Russian Mafia had used the passports
to travel internationally. Canada, meanwhile, has threatened to review immigration
agreements with Caribbean countries that sell citizenship and may impose visa restrictions
on nationals of those countries.
Dominica's neighbors, including Grenada, St Kitts and St Vincent, which also offer
"economic citizenship," say the program provides much needed revenue.
US ruling exempts internet providers from libel laws
Guardian weekly, 11 May, 2000 by Jane Martinson in New York
Internet service providers in the United States were celebrating a supreme court ruling
last week that gave them full protection against any libellous or abusive message sent
over the Web. Advocates for free speech backed the US ruling, which puts internet service
providers (ISPs) on the same footing as telephone companies as message carriers.
Stewart Baker, a partner at Steptoe & Johnson, a Washington law firm, said US
companies that operate in Britain, such as America Online, could now apply to domestic
courts if they were held liable under British laws. "This is not going to disappear
as a legal issue," he said.
British law is still unclear on the issue. Two months ago Demon Internet paid Laurence
Godfrey, a physicist and university lecturer, $24,000 plus legal fees of around $400,000
because he was the subject of allegedly libellous bulletin-board postings.
Although it was an out-of-court settlement, the Demon case was widely interpreted as a
warning to British ISPs and Web publishers. Mr Baker said the British position could harm
free speech on the internet as it gives an economic incentive for companies to withdraw
messages as soon as a complaint is made, whether or not they are libellous.
"If they leave the message up, they will either pay damages or lawyers," said Mr
Baker. "If they take it down, nothing happens."
In the US the supreme court upheld a previous ruling against a former boy scout who sought
damages from the ISP Prodigy. Alexander Lunney sued Prodigy after an impostor used his
name to send threatening and profane messages to some of his neighbours in Westchester
county. At the time, in 1994, Mr Lunney was 15 years old.
Following complaints from the recipients, Prodigy told Mr Lunney it was terminating his
account "due to the transmission of obscene, abusive, threatening and sexually
explicit material". But Mr Lunney was not even a Prodigy member.
A ruling by the New York court of appeals supported Prodigy's defence that it was not
liable for messages sent over its system. "The public would not be well served by
compelling an [ISP] to examine and screen millions of email communications, on pain of
liability for defamation," it said."We are unwilling to deny Prodigy the common
law qualified privilege afforded to telephone and telegraph companies."
A disappointed Robert Lunney, the father of the plaintiff, criticised "the imperfect
world" of the US legal system. "You and I can be the victim of something like
this tomorrow . . . The courts have given the internet providers full immunity," he
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