News from Anguilla
6 February 2000. Issue 5

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Latest News from Anguilla....

As mentioned last week, former Governor Robert Harris flew from Anguilla, his last posting, on Thursday 27 January. In certain parts of the media, much disgust was expressed at the lack of manners and protocol shown by the present coalition Government, none of whom were on hand to bid him farewell. By way of contrast, many senior civil servants, leaders of the Opposition party, and a cross-section of the community were at the airport to express their best wishes to the departing representative of the Head of State.

The new Governor, Peter Johnstone, arrived on Thursday, 3 February and was sworn in as Governor at the House of Assembly the following day.

On the political front, the tempo of the rhetoric is beginning to increase a little. Some new parties and groupings are positioning themselves as radical alternatives to the incumbent groupings. Thus we have the Anguilla Patriotic Movement (APM), a grouping whose members used to support ANA, whose manifesto calls for a renewal of the ties with Britain, for the good of all. At the other end of the spectrum it is understood that, as a novelty for modern times, we will have at least one candidate advocating independence for the territory, thereby posing an alternative to the views of our incumbent Chief Minister. Indeed some observers believe that this election is in lieu, or a rehearsal, of an independence referendum.

The initiatives of the supra-nationals

Continuing our series which looks at the initiatives of alphabet-soup bodies such as the UN, OECD, EU, APCO and G-7, all of which have an effect on the operations, or even existence, of a nation’s International Financial Services. As mentioned before, some are specific to certain territories, while giving others a relative advantage. Their existence, the reasons for them being proposed and their implications are essential reading for anyone with, or contemplating, any relationship with any of the "offshore jurisdictions" as they illuminate the environment in which we are, or may be, expected to operate. This week:

The EU has many concerns about its members’ overseas territories and is in the process of "addressing" them. Lack of space will not allow discussion on some of these matters and the reader is urged to do further research on their implications. The tax standardisation issue is but one of these concerns, being promoted by those nations which consider themselves to be fiscally haemorrhaging (such as Germany) and opposed by possible beneficiaries (such as Luxembourg). One effect of this would be a withholding tax on passive income received from places such as the overseas financial centres. Although it was once perceived by the overseas territories that the British Government was "on-message" in this campaign, recent developments suggest that at least a partial Damascene conversion may be taking place, albeit due to the effect of lost revenue and lost jobs in London’s lucrative Eurobond market. At the EU summit in Helsinki, Britain continued to stonewall those aspects of this initiative which it considered to be ill-advised (for its own purposes) and this generated some stick from its EU partners. Although the rotating EU Presidency has been passed to Portugal, a country with which Britain has a special relationship (longest surviving peace treaty/military alliance; sharing of the same patron saint, etc.), it is expected that this matter will continue to be a thorny one.

This document covers a wide range of issues. Those that have generated the most controversy in the Caribbean Overseas Territories have been in the realm of human rights, whereas the proposals for the reform of the International Financial Services sector, while drawing much debate among practitioners, appear to be over the heads of the general public. Those proposals are contained in section 5 of the document, which expresses support for the initiatives of the EU, G-7 and OECD regarding harmful tax practices, particularly when it comes to the issues of tax evasion and tax avoidance. Consequently the White Paper proposes to improve and expand the exchange of information between tax authorities, and to aid in the investigation of tax-related crimes.

It is worth noting that certain offshore centres, such as the independent Commonwealth countries (like Nevis and The Bahamas) as well as elsewhere (like Mauritius) are delighted with the provisions of the White Paper. They see it as an excellent opportunity for a spot of judicious marketing. They may well be the victors, provided that they shun activities with which the tax havens were traditionally associated – the image of the shifty client wearing shades, dripping with gold, and carrying his money in a suitcase.

This issue's "how to avoid being the victim of a scam" article: Pay-Per-Call Scams (courtesy the NFIC – see phone number below)

Scenario: You find charges on your phone bill for information or entertainment services provided through calls to 900 numbers, 800 numbers, or international phone numbers.

Scam: You never agreed to buy these services or authorised the charges.

What has happened (particularly relevant to North American/European subscribers): 900 numbers, some 800 numbers, and some international numbers are used to provide information and entertainment services such as sports scores, weather forecasts, stock market updates, psychic readings, etc.

The service providers, not the phone companies that bill on their behalf, set the charges. Fraudulent service providers trick people into calling their services without any agreement to use them or disclosure about how much they cost. While most 800 number calls are free, charges can be made for pay-per-call services provided through 800 numbers if the consumer agrees beforehand. Fraudulent service providers try to claim that there was an agreement even though there wasn't.

While calls to most foreign countries require dialling 011, a country code, a city code, and then the number, calls between the U.S., Canada and some parts of the Caribbean don't. They can be reached by dialling the same number of digits (e.g. as in the U.S.). So you may not recognise a number as foreign - until you get the bill.

When you dial a foreign number, your local phone company connects you to your long-distance company, which connects you to the phone company in the country you are calling. That company connects you to the number you dialled. Part of what you pay for the call goes to the foreign phone company - and the scammer profits by arranging to share the revenue with the company.

Be wary of faxes, pages, e-mails, and voice messages to call numbers that you don't recognise. Don't dial unless you know who and where you're calling. If you are not sure where a long-distance number is, call 00 and ask the operator or use the Area Code Look Up Service provided free on the Telecommunications Research & Action Center website.

Educate your employees about pay-per-call scams and implement firm policies about calling pay-per-call services and other uses of your business phone lines.

The person responsible for paying your phone bills should check them carefully.

If you question charges for 900 or 800 number pay-per-call services, contact the company at the number that appears on that portion of the bill. Also, notify the telephone company that sent you the bill. Deduct the disputed charges while they are being investigated and pay the rest of the bill on time.

If you were duped into calling a foreign phone number, notify your long-distance company. While you are generally responsible for long-distance charges, your long-distance company may agree to make an adjustment, at least on a one-time basis. You can arrange with your local phone company to block anyone from dialling 900 numbers on your phone. But blocking 800 number and international dialling may not be practical.

Report pay-per-call scams to law enforcement agencies.

If you need advice about a solicitation or you want to report a possible scam, call the NFIC hotline at 1-800-876-7060. You can also ask questions or report fraud using their online forms.

Best wishes,

Graham