PANAMA
Panama Could Become the New Switzerland
Although millionaires in The Americas have traditionally placed their fortunes in Switzerland, the Panamanian chapter of the eminent Society of Trust & Estate Practitioners (STEP) hopes to raise their country’s profile in asset management and resource planning to transform Panama into a prime international trust and asset management centre.

The president of Panama’s STEP chapter, Dayra Berbey de Rojas believes that Panama has the potential to develop into the benchmark for these services for the North and South American region, stating that “We have several advantages over other jurisdictions and could well earn that distinction.”  She added that “We possess all of the qualities that attract the wealthy, so what we need to do now is to promote ourselves in a manner that showcases these qualities.”

Ms. Rojas emphasized Panama’s judicial advantages which include modern trust legislation (Law 1 of 1984), the law on Private Foundations, a territorial tax system and a renowned financial centre, and noted that she will seek the support of Panama’s Superintendency of Banks to authorize the promotion of trusts in the same manner as banks.

Despite very little marketing efforts, Panama trusts have performed well during the past decade, with a remarkable 65% increase reflected over the past four years.  Panama’s trust portfolio at year-end 2006 was worth $5,479 million compared to $3,316 million at year-end 2002.

There are several types of trusts in Panama, the most common being the Commercial Trust.  Forty-nine percent of existing trusts are Guarantee Trusts and 34% are Investment Trusts.  Ms. Rojas noted that after payouts arising from bank mergers, clients are establishing Private Interest Foundations instead of trusts.  There are currently 53 trust companies in Panama which are either independent firms or owned by banks, insurance companies or law firms.  Relevant licenses are granted by the Superintendency of Banks.

The Board of Directors of STEP in Panama comprises the following Attorneys-at-Law:  Luis A. Chalhoub M., Ramses Owens, Franzella Lierena-Launsett, Rogelio De la Guardia, Raúl Zúñiga, Gilbero Sucre Camarano and Luis Manzanares.

PANAMA
Credit Rating Grade Improved / Moody’s Raised Panama’s Country Ceiling
According to the Bloomberg financial news service, Moody’s, the leading commercial credit ratings agency and risk evaluator, has upgraded the country ceiling assigned to Panama’s bonds in foreign and domestic currency from “Baa1” to “A3” noting that this improvement reflects “a slight but true decrease in some financial risks in light of a constant political and macroeconomic stability.”

Financial specialist José Abbo stated that this increase puts the Panama Canal Authority in a very good position to get a better credit rating than the country itself because it can now attain an “A3” investment grade which will reduce the financing costs of the Canal expansion program’s third set of locks.

Aristides Hernández, an economist with the Latin Consulting firm, emphasized that this new higher grade also creates improved conditions for the country to access cheaper credit.

A goal of Panama’s current Torrijos administration is to obtain investment grade status before the end of itsterm.

PANAMA
Panama  to be New UN Regional Headquarters
Mr. Nils Kastberg, regional director of the United Nations International Children’s Emergency Fund (UNICEF) recently announced that Panama will be the United Nations regional headquarters for Latin America and the Caribbean, noting that Panama’s stability and security were the core reasons  for establishing its regional headquarters there.

The regional headquarters will be constructed in Panama’s new ‘City of Knowledge’ in the former Howard Military Base site.  The Panama government has already injected US$ 2 (two) million into the first phase of this re-development project.

Panama’s President Martin Torrijos told media that the UN’s decision confirms the quality of Panama’s legal system and infrastructure and  how Panama is a key center for both regional agencies and international organizations.

Mr. Kastberg said that in contrast to some places in other continents, matters had moved ahead without complications in Panama and with a great deal of willingness to offer the UN the facilities needed to accomplish its work.  He said “Panama took the lead ahead of other regions, showing the leadership and commitment traditionally seen in its actions at the United Nations.”

BRITISH VIRGIN ISLANDS
2006-2007 State  of the Territory Address
Dr. Orlando Smith, BVI’s Chief Minister, recently delivered his fourth annual State of the Territory Address for 2006-2007, noting that the country had reached record economic growth, and praising BVI’s people for helping to foster the strongest and most sustained economic growth in the Territory’s history over these past four years.

The State of the Territory Address is an annual event at which the Chief Minister addresses the community to provide a full accounting of what Government has done during the previous year and what he hopes to achieve in the year ahead.  This year’s State of the Territory Address was special because BVI’s current Government  is finishing its four year tenure in office.

Dr. Smith said that BVI’s economy grew by 11% last year with Gross Domestic Product (GDP) now at $992 million and if this growth rate continues, the Territory’s GDP will likely surpass the $1 billion mark by the end of 2007.  He credited this record achievement in growth to the hard work of the people, and to the specific policies implemented by Government over the past four years to stimulate continued economic growth including expansion and improvement of the financial services and tourism sectors, declaring it “a credit to every member of this community.”

He also spoke of commitments to construct BVI’s first new major hotel developments in 20 years, improve the airports and road network together with other key aspects of the Territory’s physical infrastructure, plus Government’s decision to address the difficult challenge of liberalising the local telecommunications market.  Dr. Smith said “We are committed to seeing this process through because we believe that with competition, prices will go down and the quality of service will go up and that is what our people deserve.” 

The Chief Minister also talked about Government’s active efforts to attract new investors to BVI and noted that fiscal discipline had ended wasteful spending, resulting in notable budget surpluses accumulating in the Government’s consolidated fund and he challenged BVI’s people to reflect on the impact of the current economic achievements.  “I want you to take a moment to think about what our economic success has meant to you and your family, to your neighbours and your colleagues, to your friends and our entire community,” he said.

In addition, Dr. Smith pointed out that the current economic expansion has enabled record numbers of BVIslanders to build or improve their homes, send their children to school, start businesses, help find jobs for young people and improve BVI’s social services to world-class standards.  He noted that it has also allowed Government to invest more heavily in the areas of education and healthcare.

Regarding healthcare, he spoke of huge improvements such as completion of the new hospital Annex, start of construction for the new 128-bed hospital and introduction of a new National Health Insurance Programme (NHIP).

The Chief Minister also spoke about social cohesion, BVI Pride, the successful conclusion of BVI’s new Constitution that is “the envy of the region” and appealed for greater unity on development pointing out that it is “not a luxury, it is an absolute necessity” to sustain the current standard of living.

Dr. Smith concluded his Address on a personal note, thanking the community for giving him the chance to serve as Chief Minister and for their support.  He proudly and confidently declared that “The BVI is on the march,” and that working together the people of BVI could and would build “The Great Little Nation of our dreams.”

BAHAMAS
Bahamas General Elections
In a recent statement, the Bahamas Financial Services Board (BFSB) commented that Bahamians went to the polls on May 2nd in impressive numbers to elect the new Free National Movement (FNM) government headed by The Rt. Hon. Hubert A. Ingraham, for the next five years.

The BFSB welcomed the newly elected Government’s commitment to increase its contribution to the annual marketing budget for the financial services industry, and its proposed two-fold approach of sustaining both competitiveness and a well regulated financial services sector to further enhance and promote BVI’s prime status in the expanding global marketplace.

They also expressed the solid support of BFSB’s industry members for Government’s recognition of the jurisdiction’s need for a ‘School of Business’ (similar to the Swiss Banking School), and their pledge to continue providing sufficient industry professionals, product development and strategic regulation to maintain BVI’s ongoing success and growth in its financial services sector.  In this regard, the BFSB applauded both of the territory’s political parties for recognising the significance of the financial services industry to the Bahamian economy.

In their announcement following the General Election, Standard & Poor’s (S&P) stated that the FNM victory should yield continuity and strong investment support and their analysts said “Both the outgoing PLP and the incoming FNM share the same views on maintaining macroeconomic stability through a disciplined fiscal stance and prudent monetary management, factors that underpin the sovereign credit ratings.”

SEYCHELLES
The Seychelles Offshore Industry
In 1995, the Seychelles enacted three pieces of legislation designed to launch them into the offshore financial services industry, being the International Business Companies Act, the International Trusts Act and the Seychelles International Business Authority (SIBA).

The SIBA Act was established to manage and operate the jurisdiction’s international business activities, creating a central point to provide necessary data for investment decisions, and to act as facilitator between different agencies and authorities; while the other legislation provided for the registration of International Companies, International Trusts and the licensing of International (free) Trade Zone companies. 

The Seychelles also took swift and prudent measures by  expanding their portfolio of offshore products and legislation to ensure good regulatory practice in compliance with international standards set by the Organisation for Economic Cooperation and Development (OECD), the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).

Further laws and regulatory codes enacted since 1995 govern due diligence procedures, Corporate Service Providers and Trustees, licensing and regulation of offshore banks, offshore insurance companies and the regulation of other financial securities, Mutual Funds and Securities, Registration of Vessels, plus a wide range of corporate vehicles including Special Licence Companies, Protected Cell Companies, Limited Partnerships and Interactive Gaming.  An increasing network of double taxation agreements has also been established.

The jurisdiction’s impressive regulatory framework and infrastructure, combined with its efficient, swift service and competitive fees, has led to unparalleled growth.  The Seychelles has one of the highest growth rates in IBC incorporations, showing more than 30% increases per annum since 2002.  The number of IBC registrations at 31st May, 2007 stood at 37,250.  A recent performance indicator measuring growth in the IBC market compared to other prevailing jurisdictions, places the Seychelles in the 4th or 5th position.  These impressive results reflect the strong participation and exceptional working relationship between the Corporate Service Providers, SIBA and the Industry.

To maintain its continued growth and competitiveness, the Seychelles are planning further amendments to some existing legislation that will align them with other well regulated jurisdictions such as the BVI, Jersey and the Cayman Islands.

SAMOA
Congratulations PM, Cabinet, Another Moment Of Triumph!
After 33 years of moving between various temporary locations, the Development Bank of Samoa (DBS) has officially moved into its permanent, new, $44 million six-storey headquarters on Beach Road. 

Samoans view this as another moment of triumph for Prime Minister Tuilaepa Saielele Malielegaoi and his government, and a major achievement in the political and economic history of their country, as well as another source of national pride and unity. 

Aside from considering the new DBS headquarters as a magnificent achievement, Samoans consider this milestone as a remarkable testimony to the bank’s management and staff for their relentless pursuit of a healthy economy for Samoa based on hard work, honesty, integrity and dedication to their country; and they are confident that these guiding principles will continue in the years ahead.

Samoa Mourns Great Leader
In May this year, Samoa mourned the passing of their beloved Head of State, His Highness Malietoa Tanumafili II who died peacefully at age 95 in a local hospital.  Flags were ordered flown at half mast out of respect, and government declared a 2-day public grieving holiday to mark his passing, and his body was laid in state inside the Parliament Building for 24 hours prior to his burial ceremony.

His Highness Malietoa officially was, and will be Samoa’s only real Head of State, having been given sole occupancy of that position for life.  Constitutional changes ensure that Samoa’s next Head of State will  be elected by Parliament for a five-year term.

He leaves a wonderful legacy for Samoans, and will be sadly missed.

MOSSFON GROUP
SBP Provides Training on Money Laundering and Suspicious Transactions.

Complying with Article 14 of Agreement No.12-2005, the Mossack Fonseca & Co. group asked the  Superintendency of Banks of Panama (SBP) to give a lecture to its staff.

The main objective of the session was to update the attendees on international standards regarding money laundering and the financing of terrorism, as well as the detection of suspicious transactions,
transaction reports and banking standards in general.

The training session was held on 10th July 2007. Twenty-six of the firm’s attorneys attended the lecture and exchanged their thoughts and experiences regarding these important matters.