Considering the Consequences: The Developmental Implications of Initiatives on Taxation, Anti-money Laundering and Combating the Financing of Terrorism

by Sharman, J. C.; Mistry, Percy S.

• ISBN13: 9780850928747
• ISBN10: 0850928745
• Format: Paperback
• Copyright: 2008-06-30
• Publisher: Stylus Pub Llc

Summary

What have been the consequences of recent regulatory initiatives on international financial centers in small countries? This study of three small Commonwealth countries'Barbados, Mauritius and Vanuatu'suggests that the costs of implementing these new standards have exceeded any identifiable benefits for the countries concerned. The main factor explaining the adoption of the new standards, in all three countries, is the fear of being blacklisted by international organizations in the event of non-compliance, rather than any identified benefit in terms of increased competitiveness. The authors consider how policy on anti-money laundering should be developed in the future, taking into account the particular concerns of small developing countries. The book will be of interest to all those engaged in setting international standards for financial regulation, and those regulating the finance industry in both large and small countries.

Table of Contents

Foreword	p. vii
List of Abbreviations	p. viii
Summary	p. xi
Introduction	p. 1
Rationale for the study	p. 1
Design and methodology of the project	p. 3
Structure of this report	p. 6
The Barbados International Business and Financial Services Sector	p. 9
Origins and development of the IFS sector in Barbados	p. 9
The Importance of the IFS sector in Barbados	p. 12
Regulation of the Barbados International Business and Financial Services Sector	p. 21
Regulation and supervision of the IFS sector pre-1998	p. 21
Emergence and evolution of the post-1998 regulatory regime for IFS	p. 22
Incremental Costs and Benefits of Enhancing the IFS Regulatory Regime in Barbados	p. 29
Incremental costs of adopting new international regulatory standards	p. 29
Incremental benefits of enhanced IFS regulation and supervision	p. 32
Overall assessment of net benefits accruing from the adoption of new international regulatory standards and strengthening the regulatory regime	p. 35
Overall Conclusions for Barbados	p. 39
Development of the IFS Industry in Mauritius	p. 41
Inception and early regulation of the IFS industry	p. 41
Development of the Mauritian IFS industry during 1992-98	p. 43
Post-1998 developments affecting the Mauritian IFS industry and its regulation	p. 46
Importance of the IFS Industry in the Mauritian Economy	p. 53
Introduction	p. 53
The financial services sector	p. 55
Regulation and Supervision of the IFS Industry in Mauritius	p. 59
The pre-2001 regulatory framework	p. 59
The post-2001 regulatory framework for the IFS industry	p. 64
Incremental Costs and Benefits of Enhancing the IFS Regulatory Regime in Mauritius	p. 69
The quantifiable incremental costs of new AML/CFT regulation	p. 69
Qualitative assessment of costs and benefits	p. 76
Overall conclusions from the analysis of survey findings	p. 93
The International Financial Services Sector in Vanuatu	p. 127
Introduction	p. 127
Origins and developments of the IFS sector in Vanuatu	p. 127
The importance of IFS to the Vanuatu economy	p. 132
Regulation and Supervision in Vanuatu	p. 141
Structure of IFS regulation and supervision	p. 141
Emergence/evolution of the post-2000 regulatory regime for IFS	p. 143
Incremental Costs and Benefits of Enhancing the IFS Regulatory Regime in Vanuatu	p. 145
Incremental costs of adopting new international regulatory standards	p. 145
Incremental benefits of enhanced IFS regulation and supervision	p. 151
Overall assessment of net benefits accruing to Vanuatu from adoption of new international regulatory standards and strengthened regulatory regime	p. 152
Conclusions and future implications of current international regulatory initiatives for Vanuatu	p. 153
Case Study Synthesis, Conclusions and Future Directions	p. 161
Costs and benefits to the public sector in Barbados, Mauritius and Vanuatu	p. 161
Costs and benefits to the private sector in Barbados, Mauritius and Vanuatu	p. 166
General implications for the international financial centres	p. 172
Conclusions and future directions	p. 177
References and Bibliography	p. 181
Annex	p. 187
Index	p. 191
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