Table of Contents - : Peer Review Report - Phase 1: Legal and Regulatory Framework - Anguilla © Oecd 2011

PEER REVIEW REPORT PHASE 1: LEGAL AND REGULATORY FRAMEWORK ANGUILLA OECD 2011
TABLE OF CONTENTS 3
Table of Contents
About the Global Forum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Information and methodology used for the peer review of Anguilla . . . . . . . . . . 9
Overview of Anguilla . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
A.2. Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
B. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
B.1. Competent Authoritys ability to obtain and provide information . . . . . . . . 46
B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 50
C. Exchanging Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
C.1. Exchange-of-information mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
C.2. Exchange-of-information mechanisms with all relevant partners . . . . . . . . 57
C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . . 60
C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . . 61
4 TABLE OF CONTENTS
Summary of Determinations and Factors Underlying Recommendations. . . . 63
Annex 1: Jurisdictions Response to the Review Report . . . . . . . . . . . . . . . . . . 67
Annex 2: List of all Exchange-of-Information Mechanisms in Force. . . . . . . . 68
Annex 3: List of all Laws, Regulations and Other Relevant Material . . . . . . . 69
ABOUT THE GLOBAL FORUM 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for Tax
Purposes is the multilateral framework within which work in the area of tax
transparency and exchange of information is carried out by over 100 jurisdic-
tions, which participate in the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of
the implementation of the international standards of transparency and exchange
of information for tax purposes. These standards are primarily reflected in the
2002 OECD Model Agreement on Exchange of Information on Tax Matters
and its commentary, and in Article 26 of the OECD Model Tax Convention on
Income and on Capital and its commentary as updated in 2004. These standards
have also been incorporated into the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably
relevant information for the administration or enforcement of the domestic tax
laws of a requesting party. Fishing expeditions are not authorised but all fore-
seeably relevant information must be provided, including bank information
and information held by fiduciaries, regardless of the existence of a domestic
tax interest.
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed. This process
is undertaken in two phases. Phase 1 reviews assess the quality of a juris-
dictions legal and regulatory framework for the exchange of information,
while Phase 2 reviews look at the practical implementation of that frame-
work. Some Global Forum members are undergoing combined Phase 1
and Phase 2 reviews. The Global Forum has also put in place a process for
supplementary reports to follow-up on recommendations, as well as for the
ongoing monitoring of jurisdictions following the conclusion of a review. The
ultimate goal is to help jurisdictions to effectively implement the international
standards of transparency and exchange of information for tax purposes.
All review reports are published once adopted by the Global Forum.
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to www.oecd.org/tax/transparency.
EXECUTIVE SUMMARY 7
Executive summary
1. This report summarises the legal and regulatory framework for trans-
parency and exchange of information in Anguilla. The international standard
which is set out in the Global Forums Terms of Reference to Monitor and
Review Progress Towards Transparency and Exchange of Information, is
concerned with the availability of relevant information within a jurisdiction,
the competent authoritys ability to gain access to that information, and in
turn, whether that information can be effectively exchanged on a timely basis
with its exchange of information partners.
2. Anguilla is a small island of about 15 000 inhabitants located between
the Caribbean Sea and the North Atlantic Ocean and is a self-governed over-
seas territory of the United Kingdom. Anguilla has a robust and modern
financial services industry, including online incorporation of its more than
10 000 International Business Companies and has no direct taxation.
3. Anguilla formally committed to the international standards on exchange
of information in 2002, and has undertaken to rapidly develop its exchange of
information network since 2009. Since then, Anguilla has signed 17 TIEAs, six
of which are currently in force. Anguilla continues to develop its treaty network.
4. Also in 2009, Anguilla enacted the International Co-operation (Tax
Information Exchange Agreements) Act (ICTIEA Act), which gives the
Anguillan authorities the ability to meet the obligations under its treaties.
This Act also gives the Anguillan authorities broad powers to access any
information from any person pursuant to an international treaty, while pro-
viding for sufficient rights and safeguards for taxpayers.
5. In respect of availability of ownership and identity information,
Anguilla has clear requirements for ordinary companies, international busi-
ness companies, partnerships, and foundations to maintain this information,
including penalties for failure to comply. In addition, Anguilla has a strong
anti-money laundering (AML) regime which applies to most entities because
of the requirement to have a licensed service provider as a registered agent
and to provide a registered office. The AML laws also apply to banks and
requires the maintenance of records of transactions in line with the Terms of
8 EXECUTIVE SUMMARY
Reference. However, in the case of LLCs, it is not certain that ownership and
identity information is available. In addition, for trusts, a service provider
would only have to know the identity of the beneficiaries in the case of a
higher level of risk, which may impede the availability of information on
trusts.
6. Anguillas accounting requirements are not in line with the interna-
tional standard. The requirements to retain records of accounts are not consist-
ently in place for all entities and there is no requirement to retain underlying
documentation, nor is there a requirement in place to retain accounting records
for 5 years in line with the Terms of Reference.
7. Anguillas response to recommendations in this report as well as the
application of the legal framework to the practices of its competent authority
will be considered in detail in the Phase 2 Peer Review which is scheduled for
the second half of 2013. In the meantime, a follow up report on the steps under-
taken by Anguilla to answer the recommendations made in this report should
be provided to the PRG within six months after the adoption of this report.
INTRODUCTION 9
Introduction
Information and methodology used for the peer review of Anguilla
8. The assessment of the legal and regulatory framework of Anguilla was
based on the international standards for transparency and exchange of informa-
tion as described in the Global Forums Terms of Reference, and was prepared
using the Global Forums Methodology for Peer reviews and Non-Member
Reviews. The assessment was based on the laws, regulations, and exchange-
of-information mechanisms in force or effect as of May 2011, other materials
supplied by Anguilla, and information supplied by partner jurisdictions.
9. The Terms of Reference break down the standards of transparency
and exchange of information into 10 essential elements and 31 enumer-
ated aspects under three broad categories: (A) availability of information;
(B) access to information; and (C) exchanging information. This review
assesses Anguillas legal and regulatory framework against these elements
and each of the enumerated aspects. In respect of each essential element, a
determination is made that either (i) the element is in place, (ii) the element
is in place but certain aspects of the legal implementation of the element
need improvement, or (iii) the element is not in place. These determinations
are accompanied by recommendations on how certain aspects of the system
could be strengthened (see pages 63-65).
10. The assessment was conducted by a team which consisted of two
assessors and a representative of the Global Forum Secretariat: Mr. Michael
Nugent of Australia, Mr. Luis Antonio Gonzalez Flores of Mexico and Ms.
Amy ODonnell of the Global Forum Secretariat. The assessment team exam-
ined the legal and regulatory framework for transparency and exchange of
information and relevant exchange-of-information mechanisms in Anguilla.
10 INTRODUCTION
Overview of Anguilla
General information on the economy and legal system
11. Anguilla is an island of 91 square kilometres located east of Puerto
Rico between the Caribbean Sea and the Atlantic Ocean with a population of
approximately 15 000 inhabitants. The official language in Anguilla is English.
12. Anguilla is a self-governed overseas territory of the United Kingdom.
Great Britain colonized Anguilla in 1650, and administered it until the early
19
th
century when it was incorporated into a single British dependency along
with St. Kitts and Nevis. After seceding from St. Kitts and Nevis, Anguilla
became a separate British dependency in 1980.
13. Anguillas chief of state is the Queen of England, who is represented
by a Governor. The Governor chairs an Executive Council, which includes
all four Ministers of Government led by the Chief Minister, who is the Head
of Government and is usually the leader of the majority party or majority
coalition.
14. The Constitution gives the British-appointed Governor certain fun-
damental reserve powers. The Governor retains responsibility for internal
security, civil service, defence, external affairs and international financial
services. All legislation must be assented to by the Governor as H.M. the
Queens representative.
15. Anguillas ministerial form of government provides for a legisla-
ture called the House of Assembly. The House of Assembly has 11 seats,
7 of which are elected by direct popular vote, 2 ex officio members and 2
appointed members, all serving 5 year terms.
16. Anguilla is an English common law jurisdiction. Its judicial system
is administered by the Eastern Caribbean Supreme Court and has three tiers:
Magistrates Courts, High Court and the Court of Appeals. The appeal pro-
cess culminates with the Privy Council.
17. Anguilla is a small but emerging economy with a GDP of
USD 175.4 mil lion (in 2009), mainly dependent on tourism. Tourism con-
tribution to GDP averaged about 30.6 per cent of GDP while construction
accounted for 15.5 per cent of GDP. Taken together, tourism and construction
accounted for roughly 46.2 per cent of GDP over 2002-2007. The overwhelm-
ing majority of tourists, 60%, arrive from the United States. Tourism is fol-
lowed by construction and financial services (banking and insurance) as the
second and third largest sectors. Financial services accounted for 21% of the
total GDP in 2009. Given the lack of natural resources, manufacturing in
Anguilla is virtually non existent and exports are minimal. All commodities
are imported, 59% of which come from the United States.
INTRODUCTION 11
18. While its official currency is the East Caribbean dollar (XCD) at a
fixed rate of 2.7 XCD per US dollar (USD), business is also conducted in
US dollars.
Overview of Anguillas commercial laws
19. There are no taxes on income, capital gains, estates, profits or other
forms of direct taxation in Anguilla on either individuals or corporations,
whether resident in Anguilla or not and there is no value added tax in Anguilla.
The state raises revenues through a system of indirect taxes and fees levied on
hotel accommodation, developed property, business licenses, stamp duties on
the transfer of properties and customs duties. Anguilla recently enacted legis-
lation including an accommodation tax, airline ticket tax, communication tax,
environmental levy on electricity and a tourism levy.
20. Several types of legal persons and legal arrangements can be established
under the laws of Anguilla, including domestic and foreign companies: Ordinary
Companies (OCs), International Business Companies (IBCs); limited liability
companies (LLCs); trusts; mutual funds; protected cell companies; general
and limited partnerships and foundations. Unless licensed to do so, companies
cannot carry on banking, trust, insurance or company management businesses.
21. Anguilla allows for modern forms of company formation, including
electronic filing and ACORN, Anguillas Commercial On-Line Registration
Network System for IBCs. There are 10 508 IBCs currently registered in
Anguilla. In addition, Anguilla has 1 945 OCs and 501 LLCs.
22. Protected Cell Companies were established in Anguilla in 2004 pur-
suant to the Protected Cell Companies Act (PCC Act). The Act provides for a
single company with individual parts, known as cells. Each cell is only liable
for its own debts and not the debts of any other cell in the company. The estab-
lishment of a protected cell account does not create a legal person distinct from
the protected cell company. A protected cell company is thus one legal entity.
23. Trusts can be created in Anguilla under the Trusts Act as well as
under the common law. Partnerships are governed by the Partnership Act and
LPs by the Limited Partnership Act, as well as by the common law. There are
currently 35 partnerships registered in Anguilla. Anguillan law also provides
for foundations, which are governed by the Foundations Act and serve as an
estate planning vehicle, which is a civil law concept and an alternative to the
common law trust. There are 22 foundations registered in Anguilla.
12 INTRODUCTION
Overview of the financial sector and relevant professions
24. Anguilla has a robust financial services sector. There are four main
categories of financial institutions in Anguilla: offshore and domestic bank-
ing; offshore and domestic insurance companies; mutual funds; and company
managers. The banking sector consists of 4 domestic commercial banks and
3 offshore banks; and the insurance sector being 21 domestic, 240 offshore
and 12 foreign insurance companies with 45 insurance intermediaries. The
mutual fund sector consists of 41 mutual fund companies and 22 intermediar-
ies. In addition there are 53 company managers.
1
The securities and invest-
ments business is very small and Anguilla has no stock exchange.
25. The financial services sector in Anguilla is the responsibility of the
Governor, although the day to day regulation is delegated to the Anguilla
Financial Services Commission. The Anguilla Financial Services Commission
(FSC), was established in 2004 by the Financial Services Commission Act (FSC
Act), and is an independent regulatory body that focuses on licensing, supervi-
sion of licensees, monitoring of financial services in general, reviewing existing
financial services legislation and making recommendations for new legislation as
well as maintaining contact with appropriate foreign and international regulatory
authorities. The FSC regulates the financial services sector, except for domestic
banks, which are regulated by the Eastern Caribbean Central Bank and securi-
ties brokers, who are regulated by the Eastern Caribbean Securities Regulatory
Commission. The FSC is also the supervisory authority for Anguillas AML/CFT
regime, which encompasses all financial service providers, designated non-finan-
cial business services and professions (DNFBPs) and non-profit organisations.
26. The FSC has a Director who also sits on the Board, which consists
of four or five more individuals appointed by the Governor. One member
must be an individual from outside Anguilla with knowledge of the financial
services business and no more than one may be a public officer. The FSC has
access to and the right to inspect all documents filed with the Registrar of
Companies under the Companies Act and all records relating to the adminis-
tration of the registry by the Registrar.
27. The offshore financial sector is primarily focused on the incorpora-
tion and management of companies. Anguilla has many registered agents or
company managers (known as company service providers or CSPs) which
are recognised as separate entities and engaged in the conduct of company
management business and governed by the Company Management Act. The
company management business involves the incorporation of companies,
acting as registered agents, providing registered offices, preparing and filing
statutory documents on behalf of the company or acting as a director, man-
ager, officer or nominee shareholder of local and foreign companies.
1. Source: Anguilla Financial Services Commission, as at 30 November 2010.
INTRODUCTION 13
Other relevant factors for exchange of information
28. Anguilla, as a British Overseas Territory, cannot sign or ratify any
transnational convention on its own behalf. Anguilla must instead, through
the Governor, request the extension of treaties from the UK. Anguilla is how-
ever entrusted to sign tax information exchange agreements, double taxation
agreements and ancillary agreements by the UK Government with countries
which are members of the G20, OECD and EU, as well as all jurisdictions
which are on the OECDs white list of jurisdictions which have substantially
implemented the international standard. Entrustments to cover jurisdictions
other than those mentioned above can be granted by the UK Government on
an ad-hoc basis.
29. Anguilla has a strict AML/CFT regime with requirements for cus-
tomer due diligence, ongoing monitoring and recordkeeping. The regime was
recently scrutinised by the Caribbean Financial Action Task Force (CFATF)
and, although some deficiencies were found, the report noted that Anguilla
has a strong AML/CFT framework bolstered by the recent enactment of the
Proceeds of Crime Act (POCA), the AML/TF Regulations and the AML/TF
Code and a high level of public awareness of the issues relating to combating
ML and FT.
30. Anguilla entered into a formal written commitment to the OECDs
principles of transparency and exchange of information in March 2002. In
2009, Anguilla enacted the International Co-operation (Tax Information
Exchange Agreements) Act of 2009 (ICTIEAA), which allows for Anguilla
to enter into TIEAs with other jurisdictions. As at May 2011, Anguilla has
signed 17 TIEAs in accordance with the ICTIEA Act, six of which are cur-
rently in force.
2
All but two of its TIEAs are with OECD members.
3
31. Additionally, Anguilla automatically provides tax information to each
of the 27 European Union Member States in compliance with the Directive
2003/48/EEC of the Council of the European Union on taxation of savings
income (the EU Savings Directive). Bilateral agreements between Anguilla
and European Member States provide the same measures as the EU Savings
Directive and are implemented in Anguilla by the Mutual Legal Assistance
(Tax Matters) Act (MLATMA). The Comptroller of Inland Revenue has
statutory responsibility for the automatic provision of tax information pursu-
ant to this directive.
2. Australia, Finland, Germany, Denmark, Norway and the UK
3. Faroe Islands and Greenland
14 INTRODUCTION
Recent developments
32. Anguilla continues to work to expand its treaty network. Further, a TIEA
with the Republic of Korea has been agreed, however not yet signed, pending the
Republic of Koreas internal procedures. The Government of Anguilla is in the
process of negotiating TIEAs with the Governments of Poland and Spain.
COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 15
Compliance with the Standards
A. Availability of Information
Overview
33. Effective exchange of information requires the availability of reliable
information. In particular, it requires information on the identity of owners
and other stakeholders as well as information on the transactions carried out
by entities and other organisational structures. Such information may be kept
for tax, regulatory, commercial or other reasons. If the information is not kept
or it is not maintained for a reasonable period of time, a jurisdictions compe-
tent authority may not be able to obtain and provide it when requested. This
section of the report assesses the adequacy of Anguillas legal and regulatory
framework on availability of information.
34. In respect of ownership and identity information, Anguillas laws
provide for the effective retention and maintenance of identity and ownership
information for companies, partnerships and foundations, in line with the terms
of reference and penalties are generally available to enforce these obligations.
There is an exception in the case of trusts and LLCs. For trusts, the duty to
retain ownership and identity information is derived from the AML laws, but
information on beneficiaries is only required in cases of a higher level of risk.
In the case of LLCs, there is no requirement to either provide ownership and
identity at registration nor is there an express requirement for the LLC to main-
tain the information itself, although AML laws will require an LLCs registered
agent to identify 20% beneficial owners. A recommendation has been made on
these point and element A.1. is found to be in place, but certain aspects of the
legal implementation of the element need improvement.
16 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION
35. The obligations imposed in respect of accounting information are
generally not in line with the Terms of Reference and therefore element A.2.
is not in place. Anguillas laws do not provide for adequate records in respect
of accounts in all cases, specifically for LLCs, partnerships and foundations.
In addition, Anguillan law does not provide for the retention of underlying
documentation or retention of documents for a minimum of 5 years for any
entity. Therefore, this report recommends that Anguilla amend its laws to
comply with the international standard in this regard.
36. Banks are covered institutions for AML purposes and therefore
required to keep adequate records of accounts and related financial and
transactional information in line with the Terms of Reference. Element A.3.
is therefore found to be in place.
A.1. Ownership and identity information
Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.
Companies (ToR A.1.1)
Types of Companies
37. There are three forms of companies in Anguilla:
Ordinary Company (OC): can be used both within Anguilla and as an
offshore vehicle. They are governed by the Companies Act. OCs can
be either domestic, non-domestic (a company that does not maintain a
physical presence, office or staff in Anguilla or that does not engage in
any revenue generating activities in Anguilla) or foreign (incorporated
or formed under the laws of another country, but with business activi-
ties in Anguilla).
International Business Company (IBC): governed by the IBC Act.
Cannot carry on business with persons resident in Anguilla and
cannot be a banking, insurance, company management or general
trust business or own or hold an interest in real property in Anguilla.
Limited Liability Company (LLC): governed by the LLC Act. Can pro-
vide limited liability with pass through of income and losses to part-
ners; can carry on any business, purpose or activity not prohibited by
the laws of Anguilla, including with persons in Anguilla; can become
a member of a general partnership, limited partnership, company or
any other LLC and can carry on banking, insurance, trust or company
management business with proper license, but is prohibited from
owning or holding an interest in real property situated in Anguilla.
38. All corporate entities are required to register with the Registrar of
Companies for formation. Pursuant to section 15 of the Companies Registry
Act, all documents filed with the Registrar must be maintained for at least 20
years after dissolution of the company.
39. All bodies corporate (OCs, IBCs and LLCs) are required by law to
have a registered office and a registered agent in Anguilla at all times. The
registered office and registered agent of an IBC, LLC and non-domestic
company must be provided by a person who holds a relevant license (see
Service Provider section below). Domestic or foreign OCs may have a non-
licensed registered agent (i.e. a registered agent not acting by way of busi-
ness), although it is long-standing policy of the Registrar of Companies not to
accept registration of such companies without a licensed registered agent.
Company ownership and identity information required to be provided
to government authorities
Ordinary Companies
40. Registration by an OC must be accompanied by the articles of incor-
poration and must set out the address and mailing address of the registered
office and registered agent, the classes and any maximum number of shares
the company is authorised to issue and the name, nationality and mailing
address of any director. (Companies Act, Sec. 7).
41. Foreign OCs must also register with the Registrar of Companies.
Registration must include a certified copy of its charter, statutes or articles
of association, a list of the directors and a notice specifying the name and
address of its registered agent in Anguilla.
42. All OCs must file an annual return, which includes the names of all
shareholders, their address and nationality (Section 158, Companies Act and
Companies Regulations, Schedule 2, Forms 5 and 9).
International Business Company
43. An IBC must file articles of incorporation with the Registrar of
Companies, specifying the name of the company, the address within Anguilla
of its registered office, the name and address of its first registered agent,
and the number and class of its shares (IBC Act, Sec. 7). Companies formed
under the IBC Act are not required to file information regarding shareholders
or directors, but may elect to do so (Sec. 128). However, IBCs are required
to maintain a share register, therefore ownership and identity information is
available.
44. Any time an IBC amends its articles or by-laws it must, within 14
days, file such amendment with the Registrar (Sec. 10). An IBC must have a
registered agent at all times.
Limited Liability Company
45. An LLC is formed by filing articles of formation with the Registrar
of Companies (LLC Act, Sec. 11). The articles must contain the name of the
LLC, the address of its first registered office and the name and address of
its first registered agent. These articles can be amended by filing articles
of amendment with the Registrar but no ownership information is required
(Sec. 13). An LLC must have a registered agent at all times.
46. The members of an LLC may also enter into an LLC agreement con-
cerning the affairs of a LLC and the conduct of its business, which does not
have to be filed at the Companies Registry.
47. The Registrar must keep a Register of LLCs in which the articles of
formation for every LLC and any amendment thereto are registered. This
register is available to the public for inspection.
Company ownership and identity information required to be held by
companies
Ordinary companies
48. All OCs must prepare and maintain records that contain the articles
and bylaws of the company, minutes of meetings and resolutions of sharehold-
ers and a register of directors (Sec. 152). An OC must also maintain a register
of shareholders at its registered office. Directors and shareholders of an OC
must have access to these records during normal business hours (Sec. 157). A
company may appoint an agent to prepare and maintain these registers.
49. A public company whose shares are listed on a stock exchange may
keep its shareholder register outside Anguilla where the stock exchange is
located, but must ensure that a copy of its register as of the last day of each
quarter is sent to its registered office and must keep at its registered office a
copy of each of these registers and the address where the original register is
kept (Sec. 152(6)).
50. A company and its agents must take reasonable precautions to pre-
vent loss, destruction or falsification of entries and to facilitate detection and
correction of inaccuracies in the records required to be prepared and main-
tained in respect of the company (Sec. 156).
IBCs
51. An IBC must keep minutes of all meetings and copies of all resolu-
tions, as well as the articles and by-laws of the company at the registered office
or at such other place as the directors may determine, although the articles and
bylaws must be kept at the registered office (Sec. 65). A shareholder of an IBC
is entitled to copies of the articles and by-laws upon request (Sec. 66).
52. An IBC must also maintain a share register showing the name and
last known address of each person who holds a registered share, the number
of each class and series of shares held by each shareholder and the date a
person became or ceased to be a shareholder (Sec. 24). For each share issued
to bearer, the IBC must record the identifying number of the certificate, the
number of each class or series of shares issued to bearer specified therein and
the date of issue (See Bearer Shares section below).
53. A copy of such share register must be kept at the registered office of
the company or at the office of its registered agent (Sec. 24(3)). An IBC is not
required to treat a transferee of a registered share as a shareholder until the
transferees name has been entered in the share register (Sec. 26). LLCs
54. There is no express requirement for an LLC to maintain a list of mem-
bers. However, each member of an LLC has the right to obtain from the LLC
true and full information regarding the status of the business and financial
condition of the LLC (LLC Act, Sec. 25). In addition, the members may obtain
a current list of the name and last known business, residence or mailing address
of each member, holder of an economic interest and manager and a copy of the
LLC agreement, the articles of formation and all amendments thereto (LLC
Act, Sec. 25(1)). Further, Section 25(5) of the LLC Act provides that a request,
including a request to obtain membership information may be enforced by a
court order. This is not, however, equivalent to having an express obligation
to maintain records. Although the AML laws require the registered agent of
an LLC to conduct customer due diligence (CDD) on its customer, which is
the LLC, as discussed in the AML section below, Anguillas laws are unclear
on whether this requires that the registered agent know all the owners of the
LLC or simply those with 20% ownership or more. Therefore, Anguilla should
ensure its laws expressly require that LLCs maintain ownership and identity
information on its members in line with the Terms of Reference.
Licensed Entities
55. In Anguilla, there are a number of specifically regulated sectors that
require that the business is carried on by a license holder. Such entities are super-
vised by the Financial Services Commission (FSC). These include the following:
banks subject to the Banking Act, with the exception of domestic
commercial banks (which are regulated by the ECCB)
offshore banks and trust companies governed by the Trust Companies
and Offshore Banking Act (TCOBA)
insurance companies, agents and brokers governed by the Insurance
Act
managers or administrators of a mutual fund under the Mutual Funds
Act
Banks and Trust Companies
56. Banks must be licensed in Anguilla under the Banking Act (Sec. 2).
A bank can obtain a license by application to the Minister and must submit
authenticated copies of the organisational instrument, the address of its head
office and the name and address of every member of its board, among other
information (Schedule 1, Sec. 4(1)).
57. Offshore banks and trust companies are licensed in Anguilla under
the TCOBA. Offshore banking business must be carried in or from within
Anguilla, in a currency other than Eastern Caribbean dollars, only with non-
residents of Anguilla and is limited to the following:
branches or subsidiaries of banks with a well established, proven track
record which are subject to effective consolidated supervision;
banks that are not subsidiaries but are closely associated with an over-
seas bank, which, by agreement, are included in the consolidated super-
vision exercised by the overseas banks home supervisory authority;
wholly-owned subsidiaries of acceptable non-bank corporations whose
shares are quoted on a recognised stock exchange, where the objective
of the subsidiary is to undertake in-house treasury operations only,
and where such operations are fully consolidated within the published
financial statements of the parent company.
58. An offshore bank must apply to the Governor for a license and must
include the name of the applicant, the address in Anguilla of the principal
office and its registered office and the names of all shareholders and details
of percentage of shareholding (TCOB Regulations, Schedule 1, Section 2(1)).
In addition, an addendum is required with the details of each shareholder,
beneficial shareholder or director of a company, including full name, date and
place of birth, nationality, home address and additional extensive personal
and financial information.
59. An offshore bank must at all times have a principal office in Anguilla
and two authorised agents, who must be individuals resident in Anguilla
(TCOBA, Sec. 20). An offshore bank cannot change the address of its prin-
cipal office or agent without prior written approval by the Inspector of Trust
Companies and Offshore Banks.
60. Trust companies must also be licensed in order to operate in Anguilla,
unless the trust company is a domestic bank that currently holds an offshore
banking license or an attorney-at-law so far as he is engaged in a trust business
solely in the practice of law (TCOBA, Sec. 10).
61. A trust company license may be either general or restricted. The
applications for both a general and restricted trust company license require
the same information as for an offshore bank above and would therefore
include ownership and identity information.
62. Only an OC may have a general trust company licence; and an IBC
may only obtain a restricted trust company licence. For a restricted license,
the applicant must list the name of the persons on whose behalf it will be a
trustee, and cannot undertake a trust business on behalf of persons other than
those listed or named in any amendment to the list.
Insurance and Protected Cell Companies
63. Insurance companies can be either domestic or foreign. Anyone carry-
ing on an insurance business in or from within Anguilla must have a license.
An application for a license must be filed with the FSC.
64. Any company incorporated, continued or registered under the
Companies Act and which is engaged in the insurance business may apply
to the Registrar of Companies to be registered as a protected cell company
(PCC). A PCC is a single company with individual parts, known as cells, each
cell being liable only for its own debts and not the debts of any other cell in
the company. A PCC may be formed under the Protected Cell Companies Act
(PCC Act). A non-insurance company can also apply, but must obtain approval
from the FSC. The Registrar of Companies maintains a register of PCCs.
65. A PCC must maintain a register of account owners which sets out
their respective interest in any protected cell account together with the particu-
lars required in respect of the members of the PCC as set out in the Companies
Act (PCC Act, Sec. 12(8)). All such records must be made available to the FSC
upon request. Records maintained may be inspected by any account owner of
that protected cell account.
66. When a PCC is engaged in the insurance business and the Insurance
Act applies, these records are to be kept at its principal office. A PCC must
appoint and maintain a protected cell account representative in Anguilla who
must be approved by the FSC.
Mutual Funds
67. Mutual funds were established in Anguilla in 2004 pursuant to the
Mutual Funds Act. A mutual fund can be a company incorporated, a partner-
ship formed, a unit trust organized or other similar body formed under the
laws of Anguilla or any other jurisdiction.
68. There are three types of mutual funds in Anguilla:
public fund, which offers shares to the general public and is not a
private or professional fund
private fund, made up of 99 or fewer investors where the invitation to
purchase shares is made on a private basis
professional fund, shares of which are available only to professional
investors with an initial investment of at least USD 100 000 and
whose ordinary business involves dealing in investments or who
declares a net worth of USD 1 million (or its equivalent in another
currency) and consents to being treated as a professional investor.
69. In addition to the requirements pertaining to the type of entity, the docu-
ments required to form a mutual fund depend on the type of business association.
70. Public funds must be registered in order to carry on business. Such
application must be made to the FSC and be accompanied by a statement
declaring the nature and scope of the business, including the name of any
other country or jurisdiction where the applicant is carrying on or intends to
carry on business; notices of the address of the applicants place of business
and address for service in Anguilla; name and address of the person resident
in Anguilla who is authorised to present the applicant and to accept service;
address of any place of business the applicant may have outside of Anguilla;
and such other documents or information as the FSC may reasonably require.
71. Both private and professional funds must similarly register, and
registration includes proof satisfactory to the FSC that it is a private or pro-
fessional fund within the meaning of the Act; notices of the address of the
applicants place of business and its address for service in Anguilla; the name
and address of a person resident in Anguilla who is authorised to represent
the applicant and to accept service on its behalf; and the address of any place
of business that the applicant may have outside of Anguilla.
72. A professional or private fund constituted under the laws of a coun-
try other than Anguilla seeking to register in Anguilla must send a letter to
the FSC setting forth the nature and scope of the business to be carried on
in Anguilla; proof satisfactory to the FSC that it is a private or professional
fund within the meaning of the Act and that it is lawfully constituted under
the laws of another country or jurisdiction; notices of the address of the
applicants place of business and its address for service in Anguilla and the
address of any place of business the applicant may have outside Anguilla.
Service Providers
73. An OC, IBC, LLC or an attorney-at-law
4
can engage in the company
management business, pursuant to the Company Management Act (CMA)
and must hold a license. Company management business is defined as the
business of:
incorporating or forming companies;
providing the registered office for companies;
acting as a registered agent for companies;
preparing and filing statutory documents on behalf of companies;
acting as a director, manager or officer of companies or foreign com-
panies; or
acting as a nominee shareholder of companies or foreign companies.
74. It also includes offering or agreeing to carry out any of the above
named activities with the intent to carry on a business (CMA, Section 1(1)).
75. A license application includes the name of the applicant, the address
in Anguilla of his/her principal office, in the case of a company, the address
of the registered office and the names of all shareholders and their percent-
age interest in the company, the names of all of the directors of the company,
among other things (CM Regulations, Schedule 1, Section 2).
76. The Governor may revoke and suspend a license at any time if it
appears to him/her that the licensee is not fit, is insolvent, is carrying on
the business in a manner detrimental to the public interest or to the com-
pany or that he/she has contravened any provision of the CMA or the AML
Regulations (Sec. 9).
4. Attorney-at-law is defined in the Act as an attorney admitted to practise before
the Eastern Caribbean Supreme Court in Anguilla.
77. The CMA also establishes the office of Inspector of Company Manage-
ment as a public office responsible for ensuring the proper administration of the
Act (Sec. 17).
Anti-Money Laundering laws
78. The regulatory framework for Anguillas financial sector is rein-
forced by the AML/CFT regime, which is contained in the Proceeds of Crime
Act of 2009 (POCA); the Anti-Money Laundering and Terrorist Financing
Regulations of 2009 (AML/CFT Regulations); and the Anti-Money Laundering
and Terrorist Financing Code of 2009 (AML/CFT Code), and its accompanying
Guidance Notes.
79. The AML/CFT Code has the status of law in Anguilla. The Guidance
Notes are incorporated within the Code but do not have the status of law.
However, the POCA requires that a court consider whether a person has fol-
lowed the Guidance in determining whether he/she has committed an offense
under the Code.
80. The FSC is the supervisory authority for purposes of Anguillas AML/
CFT regime. Anguillas AML/CFT regime imposes strict requirements on
service providers for customer due diligence, ongoing monitoring and record-
keeping. These requirements apply to all persons, natural and legal, who fall
within the definition of service provider. Service providers include the fol-
lowing, among others:
licensees under the Banking Act
offshore banks and trust companies licensed under the TCOBA
company management companies licensed under the CMA
insurers, brokers and agents licensed under the Insurance Act
attorneys-at-law insofar as they are carrying on a trust business
persons carrying on an investment business as defined in the AML/
CFT Regulations
persons carrying on the business of forming LPs, foundations or PCCs
persons carrying on the business of providing registered offices for
LPs, lending, wiring funds, financial leasing, etc.
persons acting as a manager, administrator or promoter under the Mutual
Funds Act
persons carrying on any business, or undertaking any activity for
which a licence is required under the Securities Act, and
persons engaged in the activity of dealing in goods of any description
by way of business which involves accepting a total cash payment of
XCD 50 000 or more (approximately USD 18 500).
81. Sections 10 and 11 of the AML/CFT Regulations and the AML/CFT
Code require service providers to undertake customer due diligence (CDD)
measures prior to establishing a business relationship or executing an occa-
sional transaction.
5
In the case of a legal entity, the AML/CFT Code requires
identification measures of individuals who are the ultimate shareholders
owning twenty percent of the shares or more. However, section 4(1) of the
AML/CFT Regulations defines CDD to include identifying the identity of
each beneficial owner of the customer and third party, where either the cus-
tomer or third party or both are not individuals (emphasis added). Beneficial
ownership is determined without regard to whether shares are held directly or
indirectly, for example through a series of separate entities or arrangements.
Thus, the identification requirements under the Regulations are broader than
under the Code. In particular, the term beneficial owner is defined under the
Regulations as including any individual that is an ultimate beneficial owner
and any person that exercise ultimate control over the management of the
person. It is unclear whether the twenty percent test applies equally to the test
under the Regulations and how this is interpreted and applied in practice.
82. Section 10 of the AML/CFT Regulations also requires service provid-
ers to conduct ongoing monitoring of its customers and to obtain identifica-
tion information where there is a change in the identification information of
a customer, where there is a change in beneficial ownership of a customer
or when there is a change in the third parties or the beneficial ownership of
third parties. Section 5(4) of the AML/CFT Regulations provide that ongoing
monitoring of a business relationship means: (a) scrutinising transactions
undertaken throughout the course of the relationship, including where neces-
sary the source of funds, to ensure that the transactions are consistent with
the service providers knowledge of the customer and his business and risk
profile; and (b) keeping the documents, data or information obtained for the
purpose of applying customer due diligence measures up-to-date and relevant
by undertaking reviews of existing records.
83. The service provider must keep a copy of the evidence of identity
obtained pursuant to CDD measures, the supporting documents, data or
information obtained, a record of details of transactions, all account files and
all business correspondence relating to the business relationship or transac-
tion (AML/CFT Regulations, Sec. 17(2)).
5. Occasional transaction is defined in the AML/CFT Regulations as when the
transaction is carried out otherwise than as part of a business relationship and is
carried out as a single transaction over a certain sum (Sec. 3).
84. This information is accessible to the FSC immediately upon request,
or, if it is held at a location outside Anguilla, pursuant to the Guidelines on
Introduced Business issued by the FSC it must be made available within 72
hours. While there is no specific penalty for failure to do so, failure to comply
with the due diligence requirements of the AML/CFT Act, Regulations and
Code will be considered in assessing whether licensees should continue to
maintain a relationship with delinquent intermediaries/introducers. Repeated
noncompliance on the part of intermediaries/introducers will have an impact
on a licensees fit and proper status and its eligibility to continue to hold a
company management licence.
Nominees
85. Any person engaged in the business of acting as a nominee share-
holder of a company (whether domestic or foreign) is carrying out company
management business (see Service Provider section above) and must be
licensed under section 4(1) CMA. This results in the nominee being subject to
Anguillas AML regime. Specifically, a nominee is required to know his/her
customer, which in this case would require knowing who is the legal owner
of the share.
Bearer shares (ToR A.1.2)
86. Only IBCs can issue bearer shares in Anguilla, pursuant to the IBC Act.
87. The IBC Regulations on Custody of Bearer Shares (CBS Regulations)
require bearer shares to be in the custody of a custodian (Sec. 3(1)). A
bearer share that is held by any person other than a custodian is disabled
(unless it is held by the IBC itself and the IBC does not hold it on behalf of
another person).
88. Section 4(1) of the CBS Regulations places an explicit duty on the
custodian to identify the beneficial owners of the shares being held. Within
14 days from receipt of a bearer share, a custodian must send written notice
to the registered agent of the company stating that he is the custodian of the
share and has entered into a custody agreement with the beneficial owner
of the share, whom he has identified (Sec. 4(1)). The custodian has a duty to
ensure that the bearer share remains at all times within his custody and con-
trol. Transfer of a bearer share is not effective until the registered agent of the
company is given notice by the custodian (Sec. 7(3)).
89. A custodian must be licensed under the TCOBA or the CMA, or be
a foreign regulated person within the meaning of the AML/CFT Regulations
and the AML/CFT Code. A foreign regulated person is defined as a person
that is incorporated in, or if it is not a company, has its principal place of
business in, a country outside Anguilla; that carries on business outside
Anguilla that, if carried on in Anguilla would be a regulated business or
would result in the person falling within the definition of independent legal
professional; that, in respect of the business is subject to legal requirements
in its home country for AML/CFT purposes that are consistent with FATF
recommendations and is subject to effective supervision for compliance with
those legal requirements by a foreign regulatory authority. A foreign regu-
lated person would not be subject to Anguillas AML regime.
90. A custodian does not have to be resident in Anguilla. Currently 4 of
the 27 licensed custodians are not resident in Anguilla, and they hold bearer
shares for 61 companies. Where the custodian is not resident in Anguilla,
it is the responsibility of the registered agent of the IBC to verify that the
custodian maintains direct control facilities for the safekeeping of bearer
shares which are satisfactory to the FSC (Sec. 5). The Custody of Bearer
Shares Regulations do not expressly require that the custodian provide the
registered agent with identity and ownership information on the bearer share;
it only requires that the custodian inform the registered agent of its custodial
relationship and that it has identified the beneficial owner of the bearer share.
A registered agent has to be advised of any change in ownership of bearer
shares in order for the transfer to be effective. In addition, the registered agent
has an obligation under the AML laws to identify the owners of the company
for which he/she acts. However, as discussed in the AML section above, it is
not clear that this would require the registered agent to know all the ultimate
beneficial owners (as specified in the AML Regulations), or only those share-
holders that own more than 20% of a legal entity. Consequently, there may
be some instances where the registered agent does not have a duty to know
the owner of a bearer share and therefore information on the owner of bearer
shares may not be available in Anguilla in all cases.
Partnerships (ToR A.1.3)
91. Partnerships in Anguilla can be either general or limited; general
partnerships being governed by the Partnership Act and limited partner-
ships (LPs) being governed by the Limited Partnership Act (LP Act). Both
acts make clear that the rules of equity and common law apply in so far as
they are not inconsistent with the express provisions of the respective acts.
Partnerships are not separate legal entities in Anguilla, therefore property is
held by the partners exclusively for the purpose of the partnership. There are
currently 35 general and limited partnerships operating in Anguilla.
92. There is no statutory provision for the formation of a general partner-
ship, but the Partnership Act contains rules for determining whether a partner-
ship exists. The Partnership Act defines partnership as the relation that subsists
between persons carrying on a business in common with a view to profit.
93. An LP is formed by two or more persons entering into a Partnership
Agreement, which regulates the conduct of business of the partnership and
the rights and obligations of partners. An LP may undertake any lawful pur-
pose within or outside Anguilla.
94. A person may be both a general and limited partner and both a body
corporate and a partnership may be a partner (Sec. 3).
Ownership and identity information provided to the government
95. A general partnership carrying on business in Anguilla must obtain
an annual business license under the Trades, Business, Occupations and
Professions Licensing Act (TBOPL Act). The application for a licence under
the TBOPL Act requires an applicant to provide the full name, address, date
and place of birth, nationality and social security number, among other things
in the case of a natural person. For a corporate applicant, the application would
include the percentage ownership by Anguillan, identity of officers or direc-
tors, list of shareholders, including their nationality, identity of manager, and,
if a foreign based company, the name and address of the company.
96. Every LP must register by filing a statement with the Registrar of
Companies, which includes the name and general business address of the
partnership, the address of the registered office and the name and address of
the registered agent of the partnership as well as the full name and address
of each general partner. There is no requirement to list the names of limited
partners upon registration (Sec. 11). If any of the general partners is a body
corporate, registration must also include its certificate of incorporation or its
certificate of registration under the Companies Act.
6
A partner can change
any information by filing a statement with the Registrar within 30 days. If an
LP fails to register under this section, it is deemed to be a general partnership.
97. An LP must at all times have a registered office in Anguilla pro-
vided by a person who holds a relevant license (Sec. 6). It must also have a
registered agent in Anguilla who must also hold a relevant licence. Both the
registered office provider and the registered agent would be service provid-
ers for AML purposes, and would therefore be required to retain ownership
and identification information on the LP (see Anti-Money Laundering Laws
section above).
98. An LP must file with the Registrar an annual return signed by or on
behalf of the general partners certifying that the partnership has complied
with the requirement to notify the Registrar of any changes (Sec. 13).
6. Mutual funds may also be structured as general or limited partnerships, in which
case they are required to be licensed or registered as such under the Mutual Funds
Act.
Ownership and identity information held by the partnership
99. A general partnership is required to keep the partnership books at the
place of business of the partnership or the principal place of business if more
than one exists (Partnership Act, Sec. 25(i)). However, the act does not spec-
ify whether such books would include ownership and identity information.
100. The general partners of an LP must maintain at its registered office
the partnership agreement and any amendment thereto; a register in writing of
all persons who are limited partners, showing their full names and addresses
and specifying in relation to each limited partner the amount that he has
agreed to contribute to the capital of the LP; the amount and date of each
contribution made to the capital of the LP; the amount and dates of any pay-
ments representing a return of his contributions or part thereof; and copies of
all documents filed with the Registrar of Companies. These documents must
be open to inspection by any general or limited partner (Sec. 14). The register
of all limited partners must be updated within 21 business days of any change.
101. In addition to a partnerships duties under the relevant statutes, a
partnership also has a duty under the common law to keep accurate accounts
of all money transactions relating to its business.
7
Trusts (ToR A.1.4)
102. The Trusts Act governs the creation and administration of trusts and
has its roots in English trust law. The Trusts Act allows for the creation of
commercial or charitable purpose trusts, unit trusts, spendthrift trusts, and
variant trusts. A trust is not a separate legal entity and trust property is there-
fore held or owned by a trustee and not the trust itself.
103. In Anguilla, a trust may be created by oral declaration, by an instru-
ment in writing, by conduct, by operation of law or in any other manner once
the intention of the settlor is clearly manifested, although a unit trust can only
be created by a written instrument (Sec. 4). A trust may also be created by a
service provider licensed under the TCOBA, but does not have to be.
104. Any person who has the capacity under the law of Anguilla to own
and transfer property may be the settlor of a trust. The settlor may also be a
trustee, beneficiary or a protector of the trust (Sec. 8).
105. A trust must have at least one trustee, who may be resident in or out of
Anguilla. The trustee owes a fiduciary duty to the beneficiaries, and also has
7. Scamell, E.H. and Banks, R.C., Lindley on Partnership (15th edn. 1984) at 579,
citing Lord Eldon in Rowe v Wood (1795) 2 Jac. & W. 558-559; and in Goodman
v Whitcomb (1820) 1 Jac. & W. 589, 593 and 3 V. & B. 36; and per Lord Davey
in Trego v Hunt [1896] A.C. 7, 26.
a duty to provide full and accurate information as to the state and amount of
the trust property and the conduct of the trust administration to the court, trust
settlor or protector, and any beneficiary of the trust who is of full age and capac-
ity (Sec. 27). A trustee, therefore, would have a duty to know the identity of the
settlor or any beneficiaries, however this is not expressly stated in the law.
106. Trust services provided by trust companies are governed by the
TCOBA (see Licensed Entities section above). Anyone providing trust ser-
vices as part of a trade or business would either have to be a trust company
licensed under the TCOBA, a domestic bank or an attorney at law and would
in all three cases be subject to the AML/CFT regime.
107. Sections 10 and 11 of the TCOBA expressly provide that licensed trust
business may only be carried on in or from within Anguilla by a domestic
company, a foreign company or, in limited circumstances, by an IBC that holds
a valid license issued under Part 3 of the TCOBA. In all cases, they would have
to be licensees under either the TCOBA, Banking Act or CMA and would
therefore be subject to Anguillas AML/CFT laws including on ownership and
identity information (see Licensed Entities section above).
108. One source of ownership and identity information in Anguilla is
the Register of Trusts, which the Trusts Act requires that the Registrar of
Companies keep. An application for registration of a trust must be accom-
panied by a certified copy of the instrument creating the trust as well as the
name of the trust, if any, the name of the settlor and the name of the benefi-
ciary or the purpose for which the trust is established (Sec. 66). However,
registration of a trust is optional in Anguilla and therefore ownership and
identity information on trusts should be available by other means (see below).
109. Anguillas AML/CFT regime in relation to trusts is the source of the
duty for a trustee carrying on a trade or business to have identity and owner-
ship information on the settlor, protector and enforcer of the trust. Sections 18
and 19 of the AML/CFT Code relate specifically to trusts. Section 18 requires
that the following identification information be obtained:
the name of the trust and its date of establishment
any official identifying number
identification information for each trustee of the trust, including
mailing address
identification information of each settlor, protector or enforcer of the
trust.
110. Settlor includes a person who established the trust and any person
who has, at any time subsequently settled assets into the trust (AML/CFT
Code, Sec. 18(2)).
111. However, the AML/CFT code only requires a service provider to
obtain identification information on the beneficiaries in situations where a
service provider determines that any business relationship or occasional trans-
action concerning the trust that it is required to identify presents a higher level
of risk. In such cases, the service provider is required to obtain identification
information on each beneficiary with a vested right and each beneficiary and
each person who is an object of a power, who the service provider determines
presents a higher level of risk (Sec. 4). The Anguillan authorities note that
the term higher level of risk means merely risk that is higher than minimal
and does not necessarily mean that the level of risk is high. This is a substan-
tial deficiency and Anguilla should update its legislation require a trustee to
obtain identification information on beneficiaries in all cases.
112. In addition, the Trusts Act requires that trustees provide, upon request,
full and accurate information as to the state and amount of the trust prop-
erty and the conduct of the trust administration. Anguilla advises that this
requirement would require all trustees to maintain such information as may
be necessary to comply with such a request, including information relating to
any other trustees, settlors and beneficiaries (Sec. 27). However, it is not clear
from Anguillas legislation or regulatory guidance exactly what information
this would require and whether it includes all identity and ownership informa-
tion on the trust, although a trustee does have a fiduciary duty as discussed at
paragraph 105 above which includes a duty for a trustee to know the identity
of the settlor and beneficiaries.
Foreign trusts
113. A foreign trust, meaning every trust not governed by the laws of
Anguilla, is enforceable in Anguilla except to the extent that it purports to do
anything contrary to the law of Anguilla or to confer any right or power or
impose any obligation that is contrary to the law of Anguilla (Sec. 63).
114. There are no prohibitions on a resident acting as a trustee, admin-
istrator, protector or otherwise in a fiduciary capacity in relation to a trust
formed under foreign law. The licensing requirement would apply under the
TCOBA as well as the POCA and the AML/CFT Regulations and Code.
115. In sum, Anguillan law does not require the registration of trusts
(although it is optional). However, Anguillan or foreign law trusts, where
significant elements of the trust such as a resident professional trustee, are
connected with Anguilla, would be subject to the AML/CFT regime, which
requires a trustee to have ownership information on the settlor. However,
such ownership information would not include information on beneficiar-
ies, except in cases determined by the service provider to present a higher
level of risk. In the limited case of a non-professional trustee, ownership and
information requirements exist pursuant to the common law, but are less
clear. It is also conceivable that a trust could be created under the laws of
Anguilla which has no other connection with Anguilla. In that event there
may be no information about the trust available in Anguilla.
Foundations (ToR A.1.5)
116. Foundations can be established in Anguilla under the Foundation
Act. A foundation can be established by one or more natural or legal persons
either by declaration of establishment or by will.
117. A foundation may be established for any purpose(s) which are capa-
ble of fulfilment and are not unlawful, immoral or contrary to public policy
(Sec. 5(1)). The purpose cannot include any prohibited activity in Anguilla
or the conduct of any financial services business, without a relevant license
(Sec. 5(2)). A foundation that holds such a license falls under the regulations of
the FSC and would be a service provider for AML/CFT purposes and therefore
subject to customer due diligence requirements (see AML/CFT section above).
118. A foundation must have a registered agent at all times in Anguilla
(Sec. 17). Such agent must be a regulated person, meaning he or she must be
licensed under either the CMA or the TCOBA.
119. A foundation must also at all times have a foundation council made
up of one or more persons, whether corporate entities or individuals. The
council has the responsibility to carry out the objectives and purposes of the
foundation.
120. Every foundation must have a secretary who is a regulated person resid-
ing in Anguilla. The secretary may also be the registered agent of the foundation.
If the foundation council includes at least one regulated person who is perma-
nently resident in Anguilla, it does not need to have a secretary. If the council
has only one member, that member cannot also be the secretary. The secretary is
responsible to the council for the implementation of the decisions and policies of
the council in compliance with the Foundation Act and the laws of Anguilla. A
foundation may also appoint a person to be guardian of the foundation.
121. Foundations can either be established within or outside Anguilla. For
foundations established in Anguilla, a declaration of establishment (declaration)
or a testamentary declaration of establishment must be filed with the Registrar
of Foundations (who is also the Registrar of Companies). Such declaration is
publicly available.
8
For an overseas foundation continuing in Anguilla, its arti-
cles of continuance must be filed with the Registrar of Foundations.
8. A foundation for non-commercial purposes is deposited rather than registered,
the difference being that for a non-commercial purpose foundation, the information
122. The declaration must set forth the following:
name of the foundation, its purpose and the initial property endowment
name and address of the founder(s)
the full names and addresses of the foundation council members
name and address of the registered agent
name and address of the secretary and guardian, if any,
provisions, if any, for the designation of beneficiaries
names and addresses of any designated beneficiaries.
123. The foundation has an ongoing duty to keep the foundation docu-
ments up to date. If the declaration of establishment is amended or a change
occurs in any of the specified facts that must be provided, the foundation
must within 14 days of such change, file or deposit with the Registrar a
notice, signed by the registered agent containing the details of the change.
124. A foundation must keep a copy of its declaration and by-laws and any
amendment or change thereto. The secretary, or in the absence of a secretary,
the registered agent, must keep a register with the identification particulars of
the council members, guardian, beneficiaries, auditors, where applicable, and
any person having power of attorney by the foundation (Sec. 37). Note that
registered agents would also be a service provider for AML/CFT purposes
and would therefore be obligated to maintain up to date ownership and iden-
tity information regarding their clients and their clients beneficial owners.
Such records must be kept at the registered address of the foundation, or at
such other place as the council designates and must be open to inspection by
the registered agent and the council. If books are kept at a place other than the
registered address, whether within or outside Anguilla, the registered agent
must be notified of the location and must be furnished with such records on
request.
125. Where there is an obligation on any person to have information on
the identity of founders, members of the foundation council and any benefi-
ciaries, every record must be kept for a period of not less than 6 years after
the end of the period to which it relates (Sec. 6). Every record required to be
kept under section 37 of the Foundations Act must be kept for a period of not
less than 6 years from the end of the period to which it relates (Sec. 37(6)).
Further, pursuant to section 14 of the Companies Registry Act, documents
filed with the Registrar are retained for at least 20 years after dissolu-
tion. Although the AFA is not explicitly named as a Registry Act for the
in the application would not be made open to the public.
purposes of the Companies Registry Act, Anguilla advises that as a matter
of policy it applies the same retention requirements to documents filed under
the Foundations Act as it does to documents filed under the Registry Act.
Other relevant entities and arrangements
126. Under Anguillan law credit unions or friendly societies can also be
formed, pursuant to the Co-operative Societies Act and the Friendly Societies
Act respectively. Both provide small scale customer credit to members and both
are registered with and regulated by the FSC. There is only one credit union
in Anguilla. Neither credit unions nor friendly societies carry on international
business and their activities are restricted to that of their members, therefore
they are not necessarily relevant to this review.
Enforcement provisions to ensure availability of information
(ToR A.1.6)
127. Offences under the Companies Act are set out in Schedule 1. Failure
to maintain ownership records results in a fine of XCD 25 000, imprisonment
for six months or both. For a corporation making a false or misleading report
or return the penalty is XCD 25 000. For an OC failing to keep sufficient
accounting records, or records of minutes or failing to take reasonable care of
such records, the penalty is XCD 25 000 for a corporation and the same fine
and/or imprisonment for 6 months for an individual. When a company fails to
file financial statements with the Registrar the penalty is XCD 5 000 for both
a corporation and an individual. For a foreign OC that carries on business in
Anguilla without registering, the fine is XCD 10 000 for either a corporation or
an individual. A foreign company that fails to amend its documents or that fails
to file an annual return its XCD 5 000 for an individual or the corporation.
128. Offences under the IBC Act are set out under Schedule 1 of the Act.
An IBC that carries on a restricted business is subject to a fine of XCD 25 000
for a corporation and a similar fine, imprisonment for 6 months or both for an
individual. For failure to file notice of amendment with the registrar, failure to
state whether share certificates have been issued, failure to properly maintain
share register or keep it at its registered office or office of its registered agent,
or for failure to enter details of transfer of share into share register, the penalty
is XCD 5 000 for a corporation or an individual. For a person providing a reg-
istered office or acting as a registered agent without a licence, the penalty is
XCD 25 000 for a corporation and the same fine and/or 6 months imprisonment
for an individual. An IBC that fails to keep accounting records is subject to a
fine of XCD 10 000 for an individual or corporation. Finally, a person making
a false or misleading report or return is subject to a fine of XCD 25 000 for a
corporation and the same fine and/or 1 year imprisonment for an individual.
129. The AML/CFT laws impose strict penalties for failure to comply with
the requirements. Failure to carry out customer due diligence or ongoing mon-
itoring is punishable on summary conviction by a fine of up to XCD 100 000
(AML/CFT Regulations, Sec. 10). Failure to keep the necessary records,
including ownership information, is punishable on summary conviction by a
fine of up to XCD 50 000.
130. For bearer shares, the Custody of Bearer Shares Regulations do
not provide penalties for failure to comply, but direct that a bearer share is
disabled for any period during which it is held by a person other than a cus-
todian. However, a custodian would be subject to the AML laws and subse-
quent penalties, with the exception of a custodian who is a foreign regulated
person. Instead, a foreign regulated person would be subject to the AML
regime of his/her home country, which must be consistent with the FATF
Recommendations. The penalty for a foreign regulated person for not comply-
ing is to be disqualified as custodian by the FSC.
131. Under the LLC Act there is no penalty for a failure to keep records
and there is no specific penalty for failure to register. This could be an
impediment to availability of information. However, because an LLC must
have a registered agent who is a licensed service provider, it is difficult to
imagine a situation where an LLC would not be registered. There is a penalty
for a person knowingly making an untrue or misleading report or return of
XCD 25 000 for a corporation and the same fine and/or 1 year imprisonment
for an individual. The penalty for an LLC carrying on a prohibited business
or activity is XCD 25 000 for a corporation and the same penalty and/or 6
months imprisonment for an individual.
132. The Banking Act provides that any company that carries on a bank-
ing business without registering is subject upon summary conviction to a
fine of XCD 500 000, and 5 000 for each day of the violation. For a director
or manager the penalty is a fine of XCD 250 000 and/or imprisonment for
3 years. Any person, including a domestic bank, who carries on an offshore
banking or trust company business without a licence is liable upon sum-
mary conviction to a fine of XCD 25 000 and/or imprisonment of two years
under the TCOBA. An offshore bank that fails to have a registered office
and two agents is subject to a penalty of XCD 25 000. The penalty for failure
to change the address of its principal office or agent without prior written
approval by the Inspector of Trust Companies and Offshore Banks is a fine
of XCD 10 000.
133. Under the Protect Cell Companies Act, any person who makes a state-
ment or declaration that he/she knows or has reasonable grounds to believe is
false, deceptive or misleading in a material way, who fails to comply with a
condition or requirement to keep records, or who discloses ones status as a
PCC or for a protected cell representative who fails to perform his/her duty is
liable on summary conviction to a fine of XCD 5 000 or imprisonment for 12
months or both (Sec. 29).
134. For service providers, the Company Management Act provides that
any person, who with the intent to deceive or for any purpose of this Act,
makes any representation that he/she knows to be false or does not believe to
be true commits an offense and is liable upon summary conviction to a fine
of XCD 25 000, imprisonment or both.
135. Under the Insurance Act, a person who makes a representation he/
she believes to be untrue is guilty of an offence and liable on summary con-
viction to a fine of XCD 10 000 and 2 years imprisonment. Any person who
contravenes or fails to comply with the Act is liable to a fine of XCD 5 000
and/or imprisonment for 1 year. For failure to file for a licence with the FSC
the penalty is XCD 25 000 and/or imprisonment for 1 year.
136. Anguilla advises that the FSC Act is currently being revised with
emphasis on enhanced supervisory powers and a wider range of sanctions, as
recommended by the CFATF Mutual Evaluation Report of July 2010. Currently,
the Act provides for penalties for failure to make information available to the
FSC, which is punishable on indictment or summary conviction by a fine of
up to XCD 25 000 or, for individuals, imprisonment for up to 1 year (FSC Act,
Schedule 4). Providing information, making a representation or submitting a
return that he/she knows to be false or materially misleading or does not believe
to be true is punishable, on summary conviction, with the same penalty.
137. For general partnerships, the Partnership Act does not provide for
any penalties for failure to comply with its requirements. Anguilla advises
that failure to comply would give rise to a cause of action in tort for breach of
duty.
138. Under the Trades, Business, Occupations and Professions Licensing
Act (TBOPL Act), failure of a partnership to obtain a licence is punishable on
summary conviction by a fine of XCD 2 500 or imprisonment for a maximum
of 3 months, and, in the case of a continuing offense, a further fine of XCD 250
for each day the offence continues.
139. Under the LP Act there are penalties for failure to comply, the most
serious being for filing a false or misleading return or report, which is a fine
of XCD 25 000 for a corporation and the same fine and/or 6 months impris-
onment for an individual. For a general partner, failure to register a change of
registered office or registered agent or a change of other particulars results in
a penalty of XCD 10 000 for both a body corporate and an individual. Failure
to file an annual return results in a fine of XCD 5 000 for a corporation or
individual and failure to maintain records is penalized by an XCD 10 000
fine for an individual or a body corporate.
140. There are not specific penalties under the Trusts Act, however, a trust
can be enforced by a court and a trustee can be removed (Sec. 56).
141. A foundation that does not have a registered agent who is a regulated
person commits an offense under the Foundations Act and is liable to a pen-
alty of XCD 500 (the equivalent of the annual fee). The same penalty applies
in the case of a failure to keep accounts and records (Foundation Regulations,
Part 2(3), (4) and (5)).
142. The effectiveness of the enforcement provisions which are in place in
Anguilla will be considered as part of the Phase 2 Peer Review.
Determination and factors underlying recommendations
Determination
The element is in place, but certain aspects of the legal implementation
of the element need improvement.
Factors underlying
recommendations Recommendations
Ownership and identity information for
LLCs is not required upon registration
and an LLC is not expressly
required to maintain this information.
Although there are some obligations
for registered agents to maintain
ownership information under the AML
laws, this is not necessarily sufficient
to ensure availability of ownership
information in all cases.
Anguilla should ensure that ownership
and identity information is available for
all entities.
Anguillan law only requires a service
provider to obtain identity information
on beneficiaries of a trust in cases
of a higher level of risk for AML/CFT
purposes.
Anguilla should amend its legislation
to require a trustee to obtain
identification information on the
beneficiaries of a trust in all cases.
Ownership and identity information
may not be available in all instances in
the case of a bearer share held by a
foreign custodian.
Anguilla should ensure that ownership
and identity information on bearer
shares is available in all instances.
A.2. Accounting records
Jurisdictions should ensure that reliable accounting records are kept for all relevant
entities and arrangements.
General requirements (ToR A.2.1)
143. The Terms of Reference sets out the standards for the maintenance
of reliable accounting records and the necessary accounting record retention
period. It provides that reliable accounting records should be kept for all rel-
evant entities and arrangements. To be reliable, accounting records should;
(i) correctly explain all transactions, (ii) enable the financial position of the
entity or arrangement to be determined with reasonable accuracy at any time;
and (iii) allow financial statements to be prepared. Accounting records should
further include underlying documentation, such as invoices, contracts, etc.
Accounting records need to be kept for a minimum of five years.
Ordinary Companies and Protected Cell Companies
144. All OCs must keep accounting records that are sufficient to record
and explain the transactions of the company and will, at any time, enable the
financial position of the company to be determined with reasonable accuracy
(Companies Act, Sec. 126). Pursuant to the PCC Act, a PCC is also subject to
the accounting requirements in Sections 126 and 127 of the Companies Act.
These records must contain:
entries from day to day of all sums of money received and expended
by the company and the matters in respect of which the receipt and
expenditure takes place
details of all sales and purchases of goods by the company
a record of the assets and liabilities of the company.
145. If the accounting records of an OC or PCC are kept outside Anguilla,
it must keep at its registered office accounts and returns adequate to enable
the directors of the company to ascertain the financial position of the com-
pany with reasonable accuracy on a quarterly basis and a written record of
the place or places outside Anguilla where its accounting records are kept.
IBCs
146. An IBC must keep accounting records that are sufficient to record and
explain the transactions of the company and will, at any time, enable the finan-
cial position of the company to be determined with reasonable accuracy. Such
books and records must be kept at the registered office of the IBC or at such
other place as the directors may by resolution determine (IBC Act, Sec. 65).
147. An IBC must also keep a register of all relevant charges created by
the company, a charge being defined as any form of security interest, whether
fixed or floating, over property, wherever situated, other than an interest aris-
ing by operation of law (Sec. 76).
LLCs
148. An LLC must maintain records relating to the true and full informa-
tion regarding the status of the business and financial condition of the LLC.
This includes records relating to a true and full information regarding the
amount of cash and a description and statement of the agreed value of any
other property or services contributed by each member and that each member
has agreed to contribute in the future; and such other information regarding
the affairs of the LLC as is just and reasonable. This does not meet the stand-
ard in the Terms of Reference as it is not clear that such records would explain
all transactions and it is unclear what records would be considered just and
reasonable. The Anguillan authorities maintain that pursuant to generally
accepted accounting principles, the accounting records must be such that
an audit trail can be reconstructed and the transactions readily understood.
However, this is not expressly stated in the law.
General and Limited Partnerships
149. As a partnership is a fiduciary arrangement under the common law,
a partner has a duty to produce accounts for the benefit of all partners. In
addition, section 29 of the Partnership Act requires that partners keep true
accounts and full information of all things affecting the partnership and
render them to any partner or his/her agents.
150. The LP Act provides that a general partner of an LP is also bound
by the requirements of the Partnership Act (Sec. 10). Therefore, a general
partner in an LP is subject to the accounting requirement of Section 29 of
the Partnership Act. In addition, Section 9(5) of the LP Act provides that a
limited partner may inspect, take copies of and take extracts from the books
and records of the limited partnership and demand of and receive from a gen-
eral partner true and full information regarding the state of the partnership
business and its financial condition. These requirements lack specificity and
may not ensure that records consistent with the standards are kept in all cases
and therefore are not consistent with the standard envisaged by the Terms of
Reference. The Anguillan authorities maintain that the accounting records
must be such that an audit trail can be reconstructed and the transactions
readily understood, however this is not expressly provided in the law.
Trusts
151. All trustees are required by Section 27 of the Trusts Act to provide,
upon request, full and accurate information as to the state and amount of
the trust property and the conduct of the trust administration. This requires
that all trustees maintain the information necessary to comply with such a
request, including information relating to any other trustees, settlors, and
beneficiaries. However, this does not meet the international standard, as it
is not clear that such records would correctly explain all transactions, allow
financial statements to be prepared and enable the financial position of the
trust to be determined with reasonable accuracy at any time.
Foundations
152. The Foundations Act requires that foundations keep such accounts
and records as its council considers necessary or desirable in order to reflect
the financial position of the foundation (Sec. 37). This standard is ambigu-
ous, as it is unclear what records this would require. The Anguillan authori-
ties again maintain that the accounting records must be such that an audit
trail can be reconstructed and the transactions readily understood, however
this is not expressly stated in the law.
153. Such accounts may be kept at the registered address of the foundation
or at such other place as the council may designate and must be kept open to
inspection by the registered agent, the council members, and, where applica-
ble, its secretary, guardian or auditor (Sec. 37(3)). If the books are kept at a
place other than the registered address, the registered agent shall be notified
of the location where books are kept and upon request must be provided with
such books within a reasonable time. Where the records are kept outside of
Anguilla, the foundation must ensure that it keeps at its registered office
accounts and returns adequate to enable the council members to ascertain,
on a quarterly basis, the financial position of the foundation with reasonable
accuracy and a written record of the place or places outside Anguilla where
its accounting records are kept.
Mutual Funds
154. Pursuant to the Mutual Fund Act, every mutual fund must maintain
adequate accounting records and prepare financial statements in respect
of each financial year in accordance with generally accepted accounting
principles. If the fund is a company, it must keep such records mandated
by the Companies Act or if a partnership, the same as those proscribed by
the Partnership Act. These records must be made available to the FSC upon
request.
AML/CFT requirements
155. Service providers under the AML/CFT Code are required to retain
records relating to transactions with customers, including the name and
address of the customer, the currency and amount of transaction, the cus-
tomers account number, the date of the transaction, the details of the coun-
terparty and the nature and details of the transaction. It must also keep all
customer files and business correspondence relating to the relationship or
occasional transaction. Such records must contain sufficient details to enable
the transaction to be understood and to enable an audit trail of the movement
of funds (Sec. 36). However, the AML requirements will only apply in certain
cases, where a person subject to those rules is responsible for undertaking the
entitys recordkeeping generally.
156. In sum, Anguillas laws do not provide for adequate records in respect
of accounts in all cases. Specifically, the recordkeeping requirements for LLCs,
partnerships and foundations are unclear and should be revised in line to the
Terms of Reference.
Underlying documentation (ToR A.2.2)
157. Anguillan law does not require the retention of underlying documents
in line with the Terms of Reference for any entity. Anguillas AML/CFT
regime does require that Service Providers maintain supporting documents,
however this would only apply in limited cases where a service provider is
responsible for undertaking the entitys recordkeeping generally.
Document retention (ToR A.2.3)
158. Foundations in Anguilla have a document retention period of six years,
consistent with the standard. Additionally, in limited cases where accounting
information is retained pursuant to Anguillas AML/CFT regime information is
subject to a five year retention period. No other entities in Anguilla are required
to retain documents for the five year period envisaged by the standard and this
is a significant gap in its laws. Anguilla should revise its laws to require that
records of accounts, including underlying documentation, for all entities are
kept for a minimum of five years in line with the standard.
Determination
The element is not in place.
Factors underlying
There are currently no consistent
requirements on LLCs, partnerships,
trusts and foundations to retain
reliable accounting records.
Anguillas accounting record
requirements for LLCs, partnerships,
trusts and foundations should be
clarified to ensure that reliable
accounting records are required to be
maintained.
There are currently no express
requirements for any relevant entities
to retain accounting records which
include underlying documentation.
Anguilla should ensure that its laws
require that accounting records which
include underlying documentation
are kept for all relevant entities and
arrangements.
Most entities, with the exception of
foundations, are not required to retain
accounting records for a minimum
five year period aside from the limited
records required to be retained
pursuant to the AML laws.
Anguilla should ensure that its laws
require that accounting records
are kept for all relevant entities and
arrangements for a minimum of five
years.
A.3. Banking information
Banking information should be available for all account-holders.
Record-keeping requirements (ToR A.3.1)
159. The source of the record keeping requirements for banks and other
financial institutions is Anguillas AML/CFT regime. Such entities fall
within the definition of service provider for AML/CFT purposes and are
therefore subject to the AML/CFT Code and Regulations. The FSC is the
supervisory authority for AML/CFT purposes.
9
9. However, it is noted that domestic commercial banks are not regulated by the
FSC, and instead are regulated by the ECCB. This was flagged as a concern in
the recent CFATF report and Anguilla advises that it is developing legislation to
address this potential deficiency.
160. Pursuant to the AML/CFT Regulations, all banks and other financial
institutions are required to maintain all records pertinent to accounts, includ-
ing related financial and transactional information. Specifically, Section 17
provides that the following records must be kept by all service providers
when they form a business relationship or carry out an occasional transaction:
a record containing details relating to each transaction carried out
by the service provider in the course of any business relationship or
occasional transaction;
all account files; and
all business correspondence relating to a business relationship or an
occasional transaction.
161. The Regulations further specify that the records must include suf-
ficient information to enable the reconstruction of individual transactions
(Sec. 17(3)) and that records must be kept in a form that enables them to be
made available on a timely basis when lawfully required.
162. The AML/CFT Code further provides that records relating to trans-
actions with customers must contain the following information concerning
each transaction:
the name and address of the customer;
if the transaction is monetary, the currency and the amount of the
transaction;
if the transaction involves a customers account, the number, name or
other identifier for the account;
the date of the transaction;
the details of the counterparty, including account details;
the nature of the transaction; and
the details of the transaction (Sec. 35).
163. The AML/CFT Code also requires that transaction records must con-
tain sufficient details to enable a transaction to be understood and enable an
audit trail of the movements of incoming and outgoing funds or asset move-
ments to be readily constructed.
164. A bank or financial institution (service provider) that fails to meet
these record keeping requirements is guilty of an offence and is liable, on
summary conviction, to a fine of XCD 50 000, in addition to any civil or
administrative penalties that may be imposed.
165. Both the AML/CFT Code and Regulations require that records of
transactions be kept for a period of no less than five years from the date of the
transaction (Sec. 18).
166. In sum, Anguillas AML/CFT regime covers all banks and financial
entities. It includes standards for maintenance and retention of account and
transaction records and requires their retention for the requisite 5 year period.
Determination
The element is in place.
COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION 45
B. Access to Information
Overview
167. A variety of information may be needed in a tax enquiry and jurisdic-
tions should have the authority to obtain all such information. This includes
information held by banks and other financial institutions as well as infor-
mation concerning the ownership of companies or the identity of interest
holders in other persons or entities, such as partnerships and trusts, as well
as accounting information in respect of all such entities. This section of the
report examines whether Anguillas legal and regulatory framework gives the
authorities access powers that cover the right types of persons and informa-
tion and whether rights and safeguards would be compatible with effective
exchange of information.
168. The Anguillan authorities power to access information for tax purposes
are derived from the International Co-operation (Tax Information Exchange
Agreements) Act of 2009 (ICTIEA Act), which allows the Anguillan authorities
to carry out the terms of its TIEAs. The Act designates the Permanent Secretary
of Finance of the Ministry of Finance as the Competent Authority for exchange
of information purposes. It gives the Permanent Secretary broad authority to
access information, including financial and accounting information in line with
the Terms of Reference.
169. There is no domestic tax interest requirement in Anguillan law. The
authorities can essentially access information from any person even if it is not
required to be held and even if they do not need it for their own tax purposes.
Because of their broad powers and sufficient penalties in place, Anguillan
authorities have the power to compel information.
170. Anguillan law provides for safeguards to protect confidential informa-
tion, such as information that is subject to attorney-client privilege. However,
Anguillas Confidential Relationships Act (CRA) and the ICTIEA Act seem to
conflict on the issue of confidentiality. This could impede access to informa-
tion, therefore the report makes a recommendation that this be clarified and
46 COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION
element B.1. is found to be in place but certain aspects of the legal implemen-
tation of the element need improvement.
171. The rights and safeguards that apply to persons in Anguilla appear to
be compatible with effective exchange of information and therefore element
B.2. is found to be in place.
B.1. Competent Authoritys ability to obtain and provide information
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information).
Ownership and identity information (ToR B.1.1) and accounting
records (ToR B.1.2)
172. Competent authorities should have the power to obtain and provide
information held by banks, other financial institutions, and any person acting
in an agency or fiduciary capacity including nominees and trustees, as well
as information regarding the ownership of companies, partnerships, trusts,
foundations, and other relevant entities including, to the extent that it is held
by the jurisdictions authorities or is within the possession or control of per-
sons within the jurisdictions territorial jurisdiction, ownership information
on all such persons in an ownership chain.
10
Competent authorities should
also have the power to obtain and provide accounting records for all relevant
entities and arrangements.
11
173. Section 5 of the ICTIEA Act provides that the Permanent Secretary
may require any person in Anguilla to provide any information that the
Permanent Secretary may require with respect to a request for assistance
by a requesting party. A person from whom this information is requested
has a statutory duty to provide such information within the time requested
(Sec. 6). A person is defined under the Interpretation and General Clauses
Act (s1) to include any corporation, either aggregate or sole, and any club,
society, association or other body, of one or more persons. This definition
is sufficiently broad to include all entities in Anguilla, including banks, and
financial institutions and any person acting in an agency or fiduciary capac-
ity, including nominees and trustees.
10. See OECD Model TIEA Article 5(4).
11. See JAHGA Report paragraphs 6 and 22.
174. The Permanent Secretarys powers under the ICTIEA Act also extend
to accounting information. The term information is defined broadly in
Section 1 to cover any fact, statement or record in any form whatever that is
relevant or material to tax administration and enforcement.
Use of information gathering measures absent domestic tax interest
(ToR B.1.3)
175. The ICTIEA Act is clear that its competent authority may access any
information from any person (Sec. 5). The competent authority may only
decline a request for information in limited circumstances, none of which
include a domestic tax interest requirement.
176. Further, the exercise of the competent authoritys powers is not
dependent on whether or not a person is required to have the information or
if the information is required to be held; the competent authoritys powers
extend to the actual holder of the information. No distinction is made as to
whether the person in possession of the information is required to be in
possession of it or not (see Section 5, ICTIEA Act).
Compulsory powers (ToR B.1.4)
177. Section 10 of the ICTIEA Act prescribes penalties for failure to
comply with a request for information. A person who fails to provide infor-
mation in compliance with a request made under the Act is liable on sum-
mary conviction to a fine of XCD 10 000 or to imprisonment for a term of 2
years, or both. The same penalty applies for a person who wilfully tampers
with or alters such information, or who without lawful excuse, destroys or
damages any information which the Permanent Secretary has directed that
person to provide.
178. If a bank or financial institution fails to comply with a request, it may
also be subject to criminal penalties under the AML/CFT regime and admin-
istrative sanctions and penalties under the FSC Act. Such penalties would
include a fine of up to XCD 25 000 or, for individuals, imprisonment for up
to 1 year (FSC Act, Schedule 4). Failure to carry out customer due diligence
or ongoing monitoring under the AML regime is punishable on summary
conviction by a fine of up to XCD 100 000 (AML/CFT Regulations, Sec. 10).
179. The ICTIEA Act is silent on the issue of search and seizure and there-
fore does not provide for this power. Anguilla advises that its policy makers
are considering amendments to the ICTIEA Act to expand the competent
authoritys powers. Because the ICTIEA Act contains penalties for failure to
provide information (including possible imprisonment), there are adequate
compulsory powers in place in Anguilla. Nonetheless, it is recommended that
search and seizure powers be added in any expansion of the current law.
Secrecy provisions (ToR B.1.5)
180. Jurisdictions should not decline on the basis of its secrecy provisions
(e.g., bank secrecy, corporate secrecy) to respond to a request for information
made pursuant to an exchange of information mechanism.
181. Anguilla, being a common law jurisdiction, respects the general
common law principles relating to confidentiality. Under the common law
applicable in Anguilla, banks and all other financial institutions have a duty
to keep the business affairs of their customers confidential except where
disclosure is under compulsion of law, where there is a duty to the public to
disclose the information, where the interests of the bank or other financial
institution require disclosure or where disclosure is made by the express or
implied consent of the customer. These common law principles do not prevent
the provision of information under legislation providing for the exchange of
information pursuant to an international agreement.
182. Anguillan law includes protections for information that is subject to
attorney-client privilege. Specifically, the ICTIEA Act allows the competent
authority to decline a request for assistance where Anguillas laws protect
such information from disclosure on the grounds that it constitutes or would
reveal a privileged communication (Sec. 4(1)(b)). Privileged communication
is defined at Section 1 as any information or other matter that comes to a
professional legal advisor in privileged circumstances if it is communicated
or given to him or her:
a. by, or by a representative of, a client of his or hers in connection with
the giving by the advisor of legal advice to the client; or
b. by, or by a representative of, a person seeking legal advice from the
advisor; or
c. by a person in connection with legal proceedings or contemplated
legal proceedings.
183. This standard would apply in the case of five of Anguillas 17 TIEAs,
which do not expressly define the term legal privilege. Anguilla advises
that they interpret part c) to include a scenario where a person not represent-
ing the client supplies information to the legal advisor in relation to (con-
templated) legal proceedings against a client of the legal advisor. This would
include, e.g., banks. The information that is given by this person, therefore,
will be treated as a privileged communication as it relates to legal proceed-
ings against a client of the legal advisor. This could be overbroad, however,
because it appears to include not only information communicated between an
attorney and a client but also between an attorney and another person who is
not the client in connection with legal proceedings. This will be the subject
of further review in Phase 2 of the Peer Review of Anguilla.
184. Anguillas domestic laws conflict on the issue of secrecy. Subject to
enumerated exceptions, the Confidential Relationships Act (CRA), applies to
all confidential information with respect to business of a professional nature
that arises in or is brought into Anguilla and to all persons who come into pos-
session of that information at any time thereafter, whether within or outside
Anguilla. Confidential information is defined as information concerning any
property, or relating to any business of a professional nature or commercial
transaction that has taken place, or that any party concerned contemplates
may take place, that the recipient thereof is not, otherwise than in the normal
course of business or professional practice, authorised by the principal to
divulge.
185. While the CRA specifically excepts information provided pursuant
to the Banking Act or the FSC Act, it does not expressly exclude informa-
tion provided pursuant to the ICTIEA Act (CRA, Section 2(2)). Therefore,
it is possible that someone who divulges information pursuant to a request
from the competent authority would violate the CRA by providing such
information.
186. Further, the fact that both the Banking Act
12
and the FSC Act
13
contain
specific exclusions to their respective confidentiality provisions for information
provided pursuant to the ICTIEA Act makes this omission more troublesome.
187. Section 7 of the ICTIEA Act provides an absolute defence to any
claim brought against a person in respect of any act done in good faith in
compliance with a direction from the competent authority to provide infor-
mation. Anguilla contends that this would clearly provide a defence against
any claims arising under the common law, or any legislation imposing
12. Section 32 of the Banking Act, which applies to the domestic banking sector,
prohibits the disclosure of information by persons who have acquired that infor-
mation, including employees or agents of the Eastern Caribbean Central Bank
(ECCB), except inter alia, when lawfully required to make disclosure by any
court within Anguilla; or under the provisions of any law of Anguilla. Such law
would include the ICTIEA Act and therefore the competent authoritys powers
under the ICTIEA Act would override secrecy provisions in the Banking Act.
13. Section 24 of the FSC Act provides that no Board member, Commission
employee or other person acting under the authority of the Commission shall
disclose protected information to any other person. However, this prohibition
does not apply, to a disclosure required or permitted by any court of competent
jurisdiction in Anguilla or required or permitted by any other Act (including the
ICTIEA Act).
restrictions on the disclosure of confidential information. They also advise
that they made a policy decision to locate the exception to the CRA within
the act requiring the disclosure, rather than the CRA itself. However, because
the laws are not clear, there remains a conflict between the ICTIEA Act and
the CRA which could be an impediment to the exchange of information con-
sidered confidential under the CRA. Anguilla should clarify its laws in this
regard. According to the Anguillan authorities, a bill for an Act to amend
section 7 of the ICTIEA Act has been drafted. As amended, section 7 will
provide that a disclosure made pursuant to the ICTIEA Act does not consti-
tute a contravention of the CRA or any law in effect in Anguilla.
188. Anguilla further advises that it does not decline to respond to
a request for information made pursuant to an exchange of information
mechanism on the basis of its secrecy provisions. This was also concluded by
CFATF in its 3
rd
Round Mutual Evaluation of Anguillas AML/CFT regime.
Determination
The element in place, but certain aspects of the legal implementation of
the element need improvement.
Factors underlying
Anguillas Confidential Relationships Act
does not expressly provide an exception
for information provided pursuant to its
ICTIEA Act or its tax treaties.
Anguilla should ensure that the
competent authority has the express
power to access all information,
including confidential information.
B.2. Notification requirements and rights and safeguards
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.
Not unduly prevent or delay exchange of information (ToR B.2.1)
189. Rights and safeguards should not unduly prevent or delay effective
14
For instance, notification rules should permit excep-
tions from prior notification (e.g., in cases in which the information request is
of a very urgent nature or the notification is likely to undermine the chance of
success of the investigation conducted by the requesting jurisdiction).
14. See OECD Model TIEA Article 1.
190. Pursuant to Section 6 of the ICTIEA Act, a person on whom notice
has been served under Section 5 shall provide the information within the
period specified in the notice, which shall be 28 days, from the day the notice
is served. The Permanent Secretary has the authority to allow for more
time at his discretion, and may extend the period of time in the notice if he
believes that the circumstances warrant it. In addition, information obtained
by the Permanent Secretary pursuant to a notice must be kept confidential
and may not be provided to the requesting party for 20 days. The Anguillan
authorities maintain that the Permanent Secretary uses these 20 days to
review the information to assess whether or not the information obtained
falls within any of the grounds for declining a request, with a goal of pre-
venting or minimising incidents of judicial review and to safeguard against
potential liability for improper disclosures. They also note that the 20 days
will be factored in when seeking to meet the time limits under its TIEAs and
would not cause undue delay. Whether the Permanent Secretarys discretion
or requirement to retain information for 20 days would delay the exchange
of information in practice should be monitored in the Phase 2 peer review of
Anguilla.
191. The ICTIEA Act does not require that the competent authority notify
the taxpayer who is the subject of a request for information. Anguilla advises
that the competent authority could notify such person at his discretion.
192. Judicial review of a decision of the competent authority is available in
Anguilla. A person aggrieved by a decision made by the competent authority
has a right to seek review of the decision by the High Court of Anguilla under
the ICTIEA Act (Sec. 12).
Determination
COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION 53
C. Exchanging Information
Overview
193. Jurisdictions generally cannot exchange information for tax purposes
unless they have a legal basis or mechanism for doing so. This section of the
report examines whether Anguilla has a network of information exchange
that would allow it to achieve effective exchange of information in practice.
194. Anguillas policy has been to negotiate EOI agreements based on
the OECDs Model TIEA, rather than double tax conventions. Over the past
2 years, Anguilla has actively pursued a course of negotiating TIEAs, con-
cluding 17 agreements since 2009.
15
Six of these agreements are currently in
force and Anguilla anticipates that the remaining agreements will soon come
into force. Also, a DTC applies between Anguilla and Switzerland which
is an extension of a former DTC (1954) between the United Kingdom and
Switzerland. This agreement is not to the standard. Anguilla was not aware
that the treaty existed and recently its Executive Council has made a request
to the Government of the United Kingdom that the extension of this DTC to
Anguilla be terminated with immediate effect. The DTC with Switzerland is
not further considered in this section, which will focus on whether Anguillas
TIEAs allows it to effectively exchange information.
195. The legal authority to exchange information in Anguilla derives from
its TIEAs, which have been brought into force by the ICTIEA Act. Anguilla
also automatically exchanges information with EU countries pursuant to the
EU Savings Directive, which is implemented in domestic law by bilateral
agreements with each EU member state pursuant to the Reporting of Savings
15. Anguilla is entrusted to sign tax information exchange agreements, double taxa-
tion agreements and ancillary agreements by the UK Government with countries
which are members of the G20, OECD and EU, as well as all jurisdictions which
are on the OECDs white list of jurisdictions which have substantially imple-
mented the international standard. Entrustments to cover jurisdictions other than
those mentioned above can be granted by the UK Government on an ad-hoc basis.
54 COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
Income Information (European Union) Law (2007) Revision and was given
effect by the Mutual Legal Assistance (Tax Matters) Act (2006).
196. Anguillas TIEAs are based on the OECD Model TIEA and follow it
closely. Therefore, Anguillas 17 TIEAs meet the international standard for
C.1. Exchange-of-information mechanisms
Exchange of information mechanisms should allow for effective exchange of information.
Foreseeably relevant standard (ToR C.1.1)
197. The international standard for exchange of information envisages infor-
mation exchange to the widest possible extent. Nevertheless, it does not allow
for fishing expeditions, i.e. speculative requests for information that have no
apparent nexus to an open inquiry or investigation. The balance between these
two competing considerations is captured in the standard of foreseeable rel-
evance which is included in paragraph 1 of Article 26 of the OECD Model Tax
Convention set out below:
The competent authorities of the contracting states shall
exchange such information as is foreseeably relevant to the car-
rying out of the provisions of this Convention or to the adminis-
tration or enforcement of the domestic laws concerning taxes of
every kind and description imposed on behalf of the contracting
states or their political subdivisions or local authorities in so far
as the taxation thereunder is not contrary to the Convention. The
exchange of information is not restricted by Articles 1 and 2.
198. All of Anguillas TIEAs use the word foreseeably relevant in the
scope of the agreement, consistent with the OECD Model.
199. Six
16
of Anguillas TIEAs provide that the contracting parties are not
obligated to provide information that is either older than a legally required
time period for retention or where the information is in fact no longer kept.
Of these six, two provide specific time periods: five years in the case of
Anguillas TIEA with Germany and six in its TIEA with Australia.
16. TIEAs with the Netherlands, Denmark, New Zealand, the UK, Germany and
Australia.
In respect of all persons (ToR C.1.2)
200. For exchange of information to be effective it is necessary that a
jurisdictions obligation to provide information is not restricted by the resi-
dence or nationality of the person to whom the information relates or by the
residence or nationality of the person in possession or control of the informa-
tion requested. For this reason, the international standard for exchange of
information envisages that exchange of information mechanisms will provide
for exchange of information in respect of all persons.
201. All of Anguillas TIEAs contain a provision concerning jurisdictional
scope which is equivalent to Article 2 of the OECD Model TIEA. In ten of
Anguillas TIEAs the provision is identical to the Model. In six
17
other TIEAs
there is additional language regarding citizenship and nationality; specifically
that the agreement will be applied without regard to whether the person to
whom the information relates is a resident, national or citizen of a Party, or
whether the person by whom the information is held is a resident, national or
citizen of a party. This is additive and not restrictive.
Obligation to exchange all types of information (ToR C.1.3)
202. Jurisdictions cannot engage in effective exchange of information if
they cannot exchange information held by financial institutions, nominees or
persons acting in an agency or a fiduciary capacity. Both the OECD Model
Convention and the Model Agreement on Exchange of Information, which
are the authoritative sources of the standards, stipulate that bank secrecy
cannot form the basis for declining a request to provide information and that
a request for information cannot be declined solely because the information
relates to an ownership interest.
203. Anguillas 17 TIEAs all contain Article 5(4)(a) and (b) from the Model
TIEA which provide that information held by banks, financial institutions,
agents and fiduciaries must be exchanged as well as information regarding
ownership. In addition, TIEAs with the UK, France, Canada, the Netherlands,
Denmark and Ireland also provide that a competent authority has the authority
to obtain and provide information regarding the legal and beneficial owner-
ship of companies.
Absence of domestic tax interest (ToR C.1.4)
204. The concept of domestic tax interest describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes. An
17. Australia, UK, the Netherlands, Denmark, New Zealand and Ireland.
inability to provide information based on a domestic tax interest require-
ment is not consistent with the international standard. Contracting parties
must use their information gathering measures even though invoked solely
to obtain and provide information to the other contracting party. All of the
exchange of information agreements concluded by Anguilla allow informa-
tion to be obtained and exchanged notwithstanding that it is not required for
any domestic tax purpose.
Absence of dual criminality principles (ToR C.1.5)
205. The principal of dual criminality provides that assistance can only be
provided if the conduct being investigated (and giving rise to an information
request) would constitute a crime under the laws of the requested country if
it had occurred in the requested country. In order to be effective, exchange of
information should not be constrained by the application of the dual crimi-
nality principle. None of the exchange of information agreements concluded
by Anguilla apply the dual criminality principle to restrict the exchange of
information.
Exchange of information in both civil and criminal tax matters
(ToR C.1.6)
206. Information exchange may be requested both for tax administration
purposes and for tax prosecution purposes. The international standard is not
limited to information exchange in criminal tax matters but extends to infor-
mation requested for tax administration purposes (also referred to as civil
tax matters). All of the exchange of information agreements concluded by
Anguilla provide for the exchange of information in both civil and criminal
tax matters.
Provide information in specific form requested (ToR C.1.7)
207. All of Anguillas TIEAs follow Article 5(3) of the Model, providing
that the requested party, to the extent allowable under its domestic laws, shall
provide information in the form of depositions of witnesses and authenticated
copies of original documents.
208. Further, the ICTIEA Act provides that, where a request stipulates, the
Permanent Secretary shall obtain the information in the form of depositions
of witnesses or original documents or copies of original documents as the
laws and administrative practices of Anguilla permit (Sec. 11).
In force (ToR C.1.8)
209. Exchange of information cannot take place unless a jurisdiction has
exchange of information arrangements in force. Where exchange of informa-
tion agreements have been signed the international standard requires that juris-
dictions must take all steps necessary to bring them into force expeditiously.
210. Of Anguillas 17 TIEAs, only six are in force (see Annex 2). With
regard to the remaining 11 of 17 TIEAs signed to date, Anguilla advises that as
at May 2011, had completed all of its internal procedures necessary for bringing
nine of them into force and is now waiting for action from the other parties.
In effect (ToR C.1.9)
211. For information exchange to be effective the parties to an exchange
of information arrangement need to enact any legislation necessary to comply
with the terms of the arrangement. Anguilla has enacted domestic legislation,
specifically the ICTIEA Act, to give effect to its arrangements for exchange
of information for tax purposes.
212. Additionally, there are some issues concerning the ability of Anguillas
authorities to use their information gathering measures in order to respond
to a request for information when such information would be considered
confidential.
Determination
C.2. Exchange-of-information mechanisms with all relevant partners
The jurisdictions network of information exchange mechanisms should cover
all relevant partners.
213. Ultimately, the international standard requires that jurisdictions exchange
information with all relevant partners, meaning those partners who are inter-
ested in entering into an information exchange arrangement. Agreements
cannot be concluded only with counterparties without economic significance. If
it appears that a jurisdiction is refusing to enter into agreements or negotiations
with partners, in particular ones that have a reasonable expectation of requiring
information from that jurisdiction in order to properly administer and enforce
its tax laws it may indicate a lack of commitment to implement the standards.
214. The policy of Anguilla with respect to expanding its EOI network
has been to focus on jurisdictions which are either OECD or G20 members. It
has signed agreements with 17 jurisdictions, 15 of which are OECD member
countries. Anguilla should continue to develop its EOI network, including
with jurisdictions with foreign direct investment into Anguilla.
215. It is noted that Anguilla does not have an information exchange
agreement with its main economic partner, the United States. However, com-
ments were sought from the jurisdictions participating in the Global Forum,
and in the course of preparation of this report, no jurisdiction advised that
Anguilla had refused to negotiate or enter into an agreement.
Determination
Factors underlying
Anguilla should continue to develop its
EOI network with all relevant partners.
C.3. Confidentiality
The jurisdictions mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received.
216. Governments would not engage in information exchange without the
assurance that the information provided would only be used for the purposes
permitted under the exchange mechanism and that its confidentiality would
be preserved. Information exchange instruments must therefore contain
confidentiality provisions that spell out specifically to whom the information
can be disclosed and the purposes for which the information can be used. In
addition to the protections afforded by the confidentiality provisions of infor-
mation exchange instruments countries with tax systems generally impose
strict confidentiality requirements on information collected for tax purposes.
217. The text of Article 26(2) of the OECD Model Tax Convention reads:
Any information received under paragraph 1 by a Contracting
State shall be treated as secret in the same manner as information
obtained under the domestic laws of that State and shall be dis-
closed only to persons or authorities (including courts and admin-
istrative bodies) concerned with the assessment or collection of,
the enforcement or prosecution in respect of, the determination
of appeals in relation to the taxes referred to in paragraph 1, or
the oversight of the above. Such persons or authorities shall use
the information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions.
Information received: disclosure, use, and safeguards (ToR C.3.1)
and all other information exchanged (ToR C.3.2)
218. Twelve of Anguillas 17 TIEAs contain the language in the Model
TIEA regarding confidentiality. Four of Anguillas TIEAs diverge slightly
from the Model language, but would still protect confidentiality of information
in line with the international standard. Specifically, the Anguilla-Netherlands
TIEA provides that information can only be disclosed to persons or authori-
ties (including courts and administrative bodies) concerned with the purposes
specified in Article 1 and further, cannot be used for purposes other than those
stated in Article 1 without the express written consent of the requested party.
219. Four of Anguillas TIEAs, with France, Portugal, Ireland and Germany,
provide that information supplied to a requesting party can never be disclosed to
any other jurisdiction, even with written consent as contemplated in the Model
TIEA. In addition, Anguillas TIEA with Germany further specifies that infor-
mation shall be kept confidential and shall be protected in the same manner as
information obtained under the domestic laws of the Contracting Parties.
220. As for Anguillas domestic laws, Section 9 of the ICTIEA Act pro-
hibits a person who is notified or required to take any action or required to
supply any information from disclosing the notification or receipt of a request
or supplying the information to another person, except in accordance with
the agreements or the arrangement or where the disclosure of information
is a privileged conversation. The Act provides a penalty for contravention of
this provision of a fine of XCD 10 000 or imprisonment for 2 years or both on
summary conviction.
221. The confidentiality provisions in Anguillas agreements and its
domestic law do not draw a distinction between information received in
response to requests and information forming part of the requests themselves.
As such, these provisions would apply equally to all requests for such infor-
mation, background documents to such requests and any other document
reflecting such information.
Determination
C.4. Rights and safeguards of taxpayers and third parties
The exchange of information mechanisms should respect the rights and
safeguards of taxpayers and third parties.
222. The international standard allows requested parties not to supply
information in response to a request in certain identified situations where an
issue of trade, business or other legitimate secret may arise. Among other rea-
sons, an information request can be declined where the requested information
would disclose confidential communications protected by the attorney-client
privilege. Attorney-client privilege is a feature of the legal systems of many
countries.
223. However, communications between a client and an attorney or other
admitted legal representative are, generally, only privileged to the extent
that, the attorney or other legal representative acts in his or her capacity as
an attorney or other legal representative. Where attorney-client privilege is
more broadly defined it does not provide valid grounds on which to decline
a request for EOI. To the extent, therefore, that an attorney acts as a nominee
shareholder, a trustee, a settlor, a company director or under a power of attor-
ney to represent a company in its business affairs, information resulting from
and relating to any such activity cannot be declined to be exchanged because
of the attorney-client privilege rule.
Exceptions to requirement to provide information (ToR C.4.1)
224. All of Anguillas TIEAs contain a provision similar to Article 7 of
the Model TIEA providing that a jurisdiction can refuse to exchange certain
information. Eleven of Anguillas TIEAs contain an Article 7 provision that
is identical to the Model. Five of Anguillas TIEAs differ from the Model in
that they do not provide a definition of legal privilege.
18
However, in this case,
one would look to Anguillas domestic laws. As discussed in section B.1.5 of
this report, Anguillas competent authority may decline to supply informa-
tion that is subject to attorney client privilege (ICTIEA Act). This provision
could be overbroad, and should therefore be the subject of further review in
the Phase 2 Review of Anguilla (see Section B.1.5 above).
18. TIEAs with Ireland, Germany, the United Kingdom, Portugal and the Netherlands.
In addition, although Article 7 of the TIEA with France is not identical to the Model
it does contain the identical definition for legal privilege.
Determination
C.5. Timeliness of responses to requests for information
The jurisdiction should provide information under its network of agreements
in a timely manner.
Responses within 90 days (ToR C.5.1)
225. In order for exchange of information to be effective it needs to be pro-
vided in a timeframe which allows tax authorities to apply the information to
the relevant cases. If a response is provided but only after a significant lapse
of time the information may no longer be of use to the requesting authori-
ties. This is particularly important in the context of international cooperation
as cases in this area must be of sufficient importance to warrant making a
request.
226. All but one of Anguillas TIEAs contain a provision similar to
Article 5(6)(a) and (b) of the Model, and would therefore require a response
within 90 days. Anguillas TIEA with Portugal provides that the requested
party shall use its best endeavours to forward the requested information to
the requesting party with the least reasonable delay.
Organisational process and resources (ToR C.5.2)
227. It is important that a jurisdiction have appropriate organisational
processes and resources in place to ensure a timely response. A review of the
practical application of these processes and the resources available will be
conducted in the context of Anguillas Phase 2 review.
Absence of restrictive conditions on exchange of information
(ToR C.5.3)
228. Exchange of information should not be subject to unreasonable,
disproportionate or unduly restrictive conditions. There are no aspects of
Anguillas exchange of information agreements that appear to impose restric-
tive conditions on exchange of information. Anguillas domestic laws have
generally been aligned to allow for the exchange of information without
restrictive conditions, with exceptions noted throughout this report. Whether
these actually restrict exchange of information in practice is an issue more
appropriately considered in a Phase 2 review of Anguilla.
Determination
The assessment team is not in a position to evaluate whether this element
is in place, as it involves issues of practice that are dealt with in the
Phase 2 review.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 63
Summary of Determinations
and Factors Underlying Recommendations
Determination
Factors underlying
Jurisdictions should ensure that ownership and identity information for all relevant entities
and arrangements is available to their competent authorities (ToR A.1)
The element is in
place, but certain
aspects of the legal
implementation of
the element need
improvement.
Anguillan law only requires
a service provider to obtain
identity information on
beneficiaries of a trust in
cases of a higher level of risk
for AML/CFT purposes.
Anguilla should amend
its legislation to require a
trustee to obtain identification
information on the
beneficiaries of a trust in all
cases.
Ownership and identity
information for LLCs is not
required upon registration
and an LLC is not expressly
required to maintain this
information. Although there are
some obligations for registered
agents to maintain ownership
information under the AML
laws, this is not necessarily
sufficient to ensure availability
of ownership information in all
cases.
Anguilla should ensure
that ownership and identity
information is available for all
entities.
Ownership and identity
information may not be
available in all instances in the
case of a bearer share held by
a foreign custodian.
that ownership and identity
information on bearer shares
is available in all instances.
64 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
Determination
Factors underlying
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities
and arrangements (ToR A.2)
The element is not in
place.
There are currently no
consistent requirements on
LLCs, partnerships, trusts and
foundations to retain reliable
accounting records.
Anguillas accounting
record requirements for
LLCs, partnerships, trusts
and foundations should be
clarified to ensure that reliable
accounting records are
required to be maintained.
There are currently no express
requirements for any relevant
entities to retain accounting
records which include
underlying documentation.
Anguilla should ensure that its
laws require that accounting
records which include
underlying documentation are
kept for all relevant entities
and arrangements.
Most entities, with the
exception of foundations,
are not required to retain
accounting records for a
minimum 5 year period aside
from the limited records
required to be retained
pursuant to the AML laws.
that its laws require that
accounting records are kept
for all relevant entities and
arrangements for a minimum
of 5 years.
Banking information should be available for all account-holders (ToR A.3)
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information) (ToR B.1)
The element is in
place, but certain
aspects of the legal
implementation of
the element need
improvement.
Anguillas Confidential
Relationships Act does not
expressly provide an exception
for information provided
pursuant to its ICTIEA Act or
its tax treaties.
Anguilla should ensure that
the competent authority has
the express power to access
all information, including
confidential information.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information (ToR B.2)
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 65
Determination
Factors underlying
Exchange of information mechanisms should allow for effective exchange of information
(ToR C.1)
The element is in
place.
The jurisdictions network of information exchange mechanisms should cover all relevant
partners (ToR C.2)
The element is in place. Anguilla should continue to
develop its EOI network with
all relevant partners.
The jurisdictions mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received (ToR C.3)
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties (ToR C.4)
The jurisdiction should provide information under its network of agreements in a timely
manner (ToR C.5)
The assessment team
is not in a position to
evaluate whether this
element is in place, as
it involves issues of
practice that are dealt
with in the Phase 2
review.
ANNEXES 67
Annex 1: Jurisdictions Response to the Review Report
19
The Government of Anguilla would like to thank the Global Forum
Secretariat, particularly Ms. Amy ODonnell and Mr. Mikkel Thunnissen, as
well as the Peer Review Assessment Team, Mr. Michael Nugent of Australia
and Mr. Luis Antonio Gonzalez Flores of Mexico, for their work on the
Anguilla Peer Review Report. Anguilla appreciates the professionalism,
thoroughness and courtesy with which phase 1 of the peer review process
was conducted. Anguilla thanks its peers, who took the time to review and
comment on the Anguilla report. The amendments arising from those com-
ments enhance the clarity of the Anguilla report and its consistency with the
reports of other jurisdictions.
The Government of Anguilla finds the Peer Review Report an extremely
useful document, setting out very clearly the areas in which there are defi-
ciencies, as well as recommendations to address these deficiencies. One of
these deficiencies relates to confidentiality and the need for clarification of
the issue of whether Anguillas Confidential Relations Act might apply to
information required to respond to a request. The legislative amendments
necessary to put the matter beyond doubt have already been drafted and
Anguilla anticipates they will be finalised and considered by the legisla-
ture in the near future. Another of these deficiencies relates to accounting
information and underlying records. Anguilla accepts that the requirements
regarding accounting records are not explicitly embedded in our laws in a
way that meets international standards. Anguilla will therefore make every
effort to correct this and ensure that accounting records meet the necessary
requirements.
Anguilla embraces the opportunity to enhance its information exchange
regime and demonstrate its commitment to upholding the standards set by
the Global Forum.
19. This Annex presents the Jurisdictions response to the review report and shall not
be deemed to represent the Global Forums views.
68 ANNEXES
Annex 2: List of all Exchange-of-Information Mechanisms
in Force
Jurisdiction
Type of EoI
Arrangement Date Signed
Date Entered Into
Force
1 Norway TIEA 14.12.09 10.4.11
2 Faroe Islands TIEA 14.12.09 N/A
3 Greenland TIEA 14.12.09 N/A
4 Netherlands TIEA 22.7.09 N/A
5 Sweden TIEA 14.12.09 N/A
6 Denmark TIEA 2.9.09 10.4.11
7 New Zealand TIEA 11.12.09 N/A
8 Ireland TIEA 22.7.09 N/A
9 Iceland TIEA 14.12.09 N/A
10 Finland TIEA 14.12.09 10.4.11
11 United Kingdom TIEA 20.7.09 17.2.11
12 Belgium TIEA 24.9.10 N/A
13 Germany TIEA 19.3.10 11.4.11
14 Canada TIEA 28.10.10 N/A
15 Australia TIEA 19.3.10 17.2.11
16 Portugal TIEA 28.2.11 N/A
17 France TIEA 27.12.10 N/A
18 Switzerland DTC 1.1.61 8.63
ANNEXES 69
Annex 3: List of all Laws, Regulations
and Other Relevant Material
Anguilla Foundations Act
Anguilla Foundations Regulations
Anti-Money Laundering and Terrorist Financing Code
Anti-Money Laundering and Terrorist Financing Regulations
Banking Act
Company Management Act
Confidential Relationships Act
Co-operative Societies Act
Co-operative Societies Rules
Custody of Bearer Shares Regulations
Financial Services Commission Act
Friendly Societies Act
Friendly Societies Regulations
Insurance Act
International Business Companies Act
International Co-Operation (Tax Information Exchange Agreement) Act
Limited Liability Company Act
Limited Partnership Act
Mutual Funds Act
Partnership Act
Proceeds of Crime Act
70 ANNEXES
Protected Cell Company Act
Securities Act
Trades, Businesses, Occupations and Professions Licensing Act
Trusts Act
Trusts Companies and Offshore Banking Act

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PEER REVIEW REPORT PHASE 1: LEGAL AND REGULATORY FRAMEWORK ANGUILLA OECD 2011

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