Island Financial

Island Financial (1535)

PHILIPSBURG, St. Maarten - One of the Ministry of VSA’s top priorities is to ensure that everyone has access to affordable and quality healthcare. Having affordable health insurance is a critical part of having access to healthcare.

Besides being a barrier to accessing healthcare, being uninsured can also place huge financial strains on the family.

Unfortunately, during the time in office, Minister Lee has already signed off for quite a few uninsured people to be evacuated for emergency medical reasons. “I have seen the stress placed on families when family members without health insurance need to be evacuated for emergency reasons. Additionally, evacuating uninsured patients becomes a substantial financial burden for government, as government ends up covering these costs” explained Minister Lee

Based on conversations with Mr. Imran McSood Amjad from Nagico, they put together a highly competitive policy for uninsured people in St Maarten, especially focused on the sole proprietors such as bus drivers, taxi drivers, vendors, caretakers, domestic helpers and micro businesses. The policy by Nagico is called   SXM Medical.  

“By aggregating all the uninsured persons into one group, Nagico can offer highly competitive rates. While the policy is not national health insurance, it is certainly a temporary solution, hopefully this will help to reduce the number of uninsured people in St Maarten.” concluded Minister Lee.

So for less than 3 dollars per day, an individual can purchase a quality health insurance policy that includes medical treatment, medication, air ambulance, limited dental and limited vision expense benefits. Nagico has put together individual and family rates.

Within the first hour, after Minister Lee’s press briefing, Nagico reports that already 5 people inquired about signing up for the policy.

Minister lee also wants to extend a personal thank you to taxi driver Ash Hodge pictured in the photo receiving the policy. Mr. Hodge who the Minister has known for years, had originally asked the Minister how he could get affordable health insurance, starting this entire journey.

For those who are interested in the policy, they can contact Nagico Insurances at 5422739 or stop by their office on the C.A. Cannegieter street # 26.

PARAMARIBO, Suriname – The Caribbean Development Bank (CDB) on Tuesday launched its first project in Suriname.

The USD21.94 million intervention supports the Government of Suriname’s programme of reform to improve the quality of and expand access to Technical and Vocational Education and Training (TVET) at the Lower Secondary School level.

Through the Enhancement of Technical and Vocational Education and Training (E-TVET) Project, eight Practical Instruction Centres will be built and 101 classrooms and workshops constructed or upgraded. They will accommodate over 3,500 students at the Lower Secondary School level.

“CDB is very pleased to be commencing this partnership with the Government of Suriname. The competencies which Surinamese students will develop as a result of this Project will equip them to seek further education, to obtain sustainable employment and to enter into the workforce, thereby promoting and sustaining economic transformation and development,” said Patricia McKenzie, Vice President (Operations), CDB.

In Suriname, students assigned to TVET programming, particularly those who live in remote areas, have limited or no access to practical education – a key component of TVET. The E-TVET Project addresses this issue through the construction of the Practical Instruction Centres or hubs, which provide hands-on competency development for every student in TVET programming. The hubs will be outfitted with furniture, equipment and instructional resources that will allow for better preparation of students for further education or the workforce.

DEN HAAGThe countries in the Caribbean part of the Kingdom are making progress in improving their public finances, according to the Board of financial supervision (College financieel toezicht - Cft) in its Annual Report of 2015.

The Cft members are in the Netherlands from April 11 to 13 for a working visit.

They will meet with the chairmen and members of the First and the Second Chamber, the minister of Interior Affairs and Kingdom Relations (BZK) and they will visit the ministries of BZK and Finance, the Council of State and the National Audit Office.

The countries

The Annual Report shows that Curaçao has booked a surplus for the third year in a row, and that the deficit of Aruba, where supervision was introduced last year, has decreased beyond expectation, whilst Sint Maarten for the first time since 10-10-10 has realized a balance budget.

Sint Maarten however was given an instruction to settle its arrears and to reform its pension and health care system. Cft chairman Age Bakker: “Good progress is being made in achieving sustainability of public finances; nonetheless improving financial management still remains a major challenge.”

The countries show an expected economic growth between 0.5% and over 1% this year, which is a slight improvement compared to 2015, which closed with a growth between 0.1% and 0.5%.

The public entities

All public entities have a balanced budget. In the area of financial management, the picture is diverse: Bonaire is working hard towards improvement and Sint Eustatius, which was given an instruction, has launched a comprehensive action plan so as to get both the managerial and the financial and administrative organization in order. Saba has its financial management under control.

Debt quota

The debt quota of Curaçao has increased in 2015 to 40% GDB, mainly because Curaçao is financing the construction of a new hospital, whilst Sint Maarten’s debt quota has stabilized at a 33% GDP level. Considering the low interest rate the countries are able to borrow against via The Netherlands, the countries are staying well within their interest burden margins.

The Cft recommends that the countries comply with the medium-term debt norm of 40% GDP. A band width of 5% can be applied in order to absorb economic shocks. With Aruba it is agreed that as of 2018 budget surpluses will be realized in order to reduce the excessive debt.

The Annual Report also comprises the findings of the committee in charge of evaluating the Kingdom law on financial supervision (Rijkswet financieel toezicht - Rft) and the Spies evaluation committee. In the Annual Report it is concluded that it is of the utmost importance that adequate follow-up is given to these findings.

PHILIPSBURG, St. Maarten - The St. Maarten Chamber of Commerce and Industry (COCI) is of the opinion that compliance with international standards applicable to Commercial registries, will not solely contribute towards a more secure business environment on St. Maarten, but will also contribute towards the country’s initiatives to combat money laundering and terrorism funding activities.

Compliance with (Financial Action Taskforce on Money laundering) FATF international standards set in February 2012 (Anti Money Laundering/ Combating the financing of Terrorism AML/CFT standards) will be achieved if all within the country implement and execute measures that will aid hereto.

Financial institutions, Insurance companies, Notaries and Lawyers have already commenced the implementation and execution of measures under the heading “Know your customer”. Share holder registers and Ultimate Beneficiary Ownership (UBO) records are already being maintained within the entities mentioned afore, yet a proper regulation and central registry hereon has not been provided for.

The Parliament of the European Union in its guideline of May 20, 2015, outlined the objective for its member states to have in place laws and administrative provisions through which the guideline requirements will be in effect by June 27, 2017.

The guideline is formulated with due consideration of the FATF recommendations, and seeks to have a more structured and organized approach towards the combatting of money laundering, terrorism funding and organized crimes.

The member states have committed themselves to have the appropriate laws and administrative provisions in place. Within the Kingdom, the Netherlands has currently on consultation a law amendment to the Chamber of Commerce Register law (Handelsregisterwet of 2007) and the Civil Code.

COCI Operations having received unanimous support from its Board of Directors has taken the stance that Country St. Maarten, being part of the Kingdom, must do its part. COCI shall have formulated law amendment proposals to be presented to the Government of St. Maarten, later this year for its consideration. COCI shall conduct prior consultations with stakeholders, to ensure input is incorporated in proposals to be presented to Government.

COCI is of the opinion that we must be proactive and undertake initiatives that will underscore the country’s intent to be compliant with international standards and demonstrate its commitment to combat crimes that adversely affect the integrity, stability and credibility of the financial sector, and so the country.

COCI advocates that country St. Maarten commits to adopt and have implemented the required supporting laws, to enable a central registry, with proper safeguards, to be maintained on shareholding and ultimate beneficiary ownership by June 2017. 

COCI will do its part and trusts that the Government will give due and timely considerations to its proposals, in the interest of St. Maarten.

PHILIPSBURG, St. Maarten - On Thursday March 31st, 2016 Social and Health Insurances (SZV) submitted it’s 2017 Budget to the Minister of Public Health, Minister Emil Lee for review and approval.

The proposed budget includes continued efforts to control costs and identify opportunities for efficiencies in managing the sustainability of the various funds in SZV’s portfolio.

SZV was very pleased to have had the budget submitted before the deadline of April 1st as dictated by the law, a historical moment as this deadline was not yet obtained in the past.

Achieving this milestone will enable the organization to swiftly move forward with the required steps to reduce the burden on the limited revenue, activate improvements with respect to transparency and accountability and improve services rendered to customers.

“Budgets are an important part of financial management. Receiving the 2017 budget in a timely manner is an important step in SZV’s development strategy, which allows for financial planning in a proactive manner. The board and management deserve recognition for submitting their budget on time; the first time in the history of SZV.” – Emil Lee, Minister of Public Health.

In 2015, SZV conducted an ‘Asset Liability Management’ study of the various funds. The effect of changes in the collection compliance, cost indexation and investment portfolio may have on the long term sustainability of each managed fund was investigated through this study.

With these results SZV has determined several measures and strategies that will help in maintaining the financial sustainability of each fund; this will be the main focus of the 2017 budget.

SZV is currently implementing strategies that may reduce shortages within the next four to five years. One of the main strategies is the automation of the healthcare sector and the SZV processes that are related thereto.

This will result in higher efficiency and combat fraud, which will consequently contain costs on the long run. Another main strategy is to invest in collection compliance which will lead to a significant increase of its revenue benefiting notable shortages.

“I’d like to thank our Supervisory Board for helping us submit the budget on time. Besides working on compliance to increase the revenues, we believe that embracing sustainability practices is crucial to long-term growth and positive development outcomes for the funds.

Our commitment is to assure the financial sustainability of all funds, by understanding, measuring, and managing the risks we take when investing locally and abroad.” – Glen A. Carty, Interim Director of SZV

With regards to the quality of service to customers, SZV is committed to invest in new ways to improve customer satisfaction and communication tools as well as reduce the administrative burden of our customers as much as possible.

WASHINGTON – The names of persons implicated in the leak of the so-called “Panama papers” on April 3 reads like a who’s who of the politically powerful in many parts of the world. 

Included among the persons whose family members and close associates have been identified are: British Prime Minister David Cameron, Ukrainian President Petro Poroshenko, Saudi Arabian King Salman bin Abdulaziz Al Saud, Pakistani Prime Minister Nawaz Sharif, South African President Jacob Zuma, Syrian President Bashar al-Assad, Chinese President Xi Jinping, Icelandic Prime Minister Sigmundur David Gunnlaugsson and Russian President Vladimir Putin.

It should be noted, however, that there has been no evidence of direct connections to companies and bank accounts by these people.  Neither has there been any evidence of illegal behaviour or wrong doing specifically by them.  Some media are feeding a frenzy because mentioning well-known names helps to create and sustain a story that suggests impropriety.

The so-called “Panama Papers” is 11 million files leaked from the Panamanian law firm, Mossack Fonseca, to an organization called the International Consortium of Investigative Journalists (ICIJ) which has widely publicised much of the material.  The law firm has denied any wrongdoing, and said it has fallen victim to “an international campaign against privacy”.

The resignation of Iceland’s Prime Minister, Sigmundur Gunnlaugsson, has helped to fuel the story, even though he has not stood down over an illegality.  His resignation followed demonstrations based on the allegation that he concealed millions of pounds offshore.  Prime Minister David Cameron has also been compelled to talk about his family’s private business after his father was among those named in the Panama Papers.

The Caribbean will not be immune from the excitement that is being generated by the leaking of the papers.  It seems that many of the companies, quite legitimately established by Mossack Fonseca, were registered in the British Virgin Islands.

From all that has emerged so far, it seems that many of the persons who have been identified in the Panama Papers were not evading tax or laundering money.  The majority appeared to have been planning their taxes, including by the use of legitimate vehicles for avoiding the payment of tax.   Tax avoidance in not illegal.  Tax evasion is. But, increasingly there is a tendency to blur the two by those who advocate against low-tax or no tax jurisdictions, claiming that they are ‘tax havens’.

Already, one high-tax European Union country, France, has announced that it is putting Panama back on its list of “uncooperative countries”.  One official of the Organization for Economic Cooperation and Development (OECD), Angel Gurria, has also sharply criticised Panama in the wake of Panama Papers.   Gurria stated publicly that “Panama is the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities”.

But, neither of the spokesmen for France or the OECD dealt with the fact that high tax jurisdictions force companies and persons to seek low tax jurisdictions to plan their financial affairs and that no illegality has so far emerged from the events in Panama.

For its part, the Panamanian government has pointed out that it has been removed from the ‘grey list’ of the Financial Action Task Force (FATF), the multilateral body that makes rules to counter money laundering and terrorism financing.  In other words, it was judged to be compliant with FATF rules.

The government has also pointed out that half of offshore companies that were established by Mossack Fonseca are registered in the British Virgin Islands – “a jurisdiction that operates under British legislation.”  The government also stressed that all of the 10 banks named in the Panama Papers as doing business with the law firm hit by the hack were based in Europe, not Panama.

Significantly, the government further noted that the US state of Delaware allowed great anonymity for company owners.  “The tactic to ignore other jurisdictions and focus solely on Panama is unfair and discriminatory,” the statement said.

It is clear from all this that ‘high tax’ jurisdictions and others have branded Panama without establishing that there is any evidence of money laundering or tax evasion.  The fact is that establishing vehicles for tax planning, including avoidance, is not illegal.  Panama has been very strong in resisting the imposition of rules by the OECD’s Global Forum on automatic Information exchange.  It is now paying the price for its attempts to be independent.

In this connection, the observations of Dr Bruce Zagaris, a renowned US Tax lawyer is pertinent.  He made the remarks at a meeting of the Permanent Council of the Organisation of American States that I chaired on March 30.   He pointed out that the Global Forum is a sham by which the OECD strictly controls the agenda, the delegates and the information distributed to attendees, and, in terms of tax policies, the large countries have blocked efforts to have a universal organisation such as the United Nations make policy.

It is interesting that the Russian President Vladimir Putin whose name has been bandied about in relation to the Panama Papers has pointed out that his name is nowhere in the records.

Caribbean jurisdictions have worked hard with scarcer resources than Panama to comply with all the imposed rules and regulations, and to protect their standing in providing financial services. But, as events in Panama show, innuendo is all that is needed if facts confront assertions.

LONDON – A few days ago the leader of the British Labour Party, Jeremy Corbyn, called on the British Prime Minister to consider taking direct control of Britain’s Caribbean overseas territories. His remarks – not without irony, as of all of the members of the British Parliament, he is among those with the strongest track record as an anti-imperialist – respond to the the global furor over the so called Panama Papers.

These are the 11.5m files taken from the database of the Panama based offshore law firm, Mossack Fonseca & Co, which were sent in 2014 in digitized form on an unsolicited basis from an anonymous source to the German newspaper, the Süddeutsche Zeitung. They were subsequently shared with the International Consortium of Investigative Journalists (ICIJ) in Washington and then researched by about 100 newspapers and broadcasters worldwide.

The documents’ contents link national leaders, politicians, their families, close associates, leading business people, individuals subject to UN sanctions, global figures in sports and entertainment, and narcotics-traffickers and other criminals, to companies and legal vehicles registered in or operated through low or no tax offshore financial centers such as the BVI or Bermuda.

In part they indicate how the global elite and the world’s wealthy use these and other jurisdictions to reduce or obviate their tax liability, hide or launder money, or to obscure the origin or ownership of their assets.

Beyond the facts, however, the leaked documents raise broader questions. They shine a light on growing wealth inequality, the role of an ever growing army of intermediaries such as Mossack Fonseca dedicated to helping the very wealthy, and the questionable morality of the individuals and companies that seek to avoid the scrutiny of the societies in which they reside or operate.

That said, while the offshoring of wealth and assets may be morally dubious, hypocritical, and sometimes criminal, it is for the most part legal.

As such it is a reflection of just one of many contradictions between every government’s interest in encouraging domestic growth and employment by ensuring that investment, money and assets are able to flow freely, and the need for sovereign states and political systems to respond to electorates that want them to exert greater control over those who do not contribute appropriate levels of tax in the countries in which they operate.

Unfortunately, when it comes to the Panamanian connection with the Caribbean, what seems to be lost in relation to the sometimes extraordinary revelations, is that the Caribbean offshore financial services being made use of, are legal, have mostly been developed with the active encouragement of successive British governments to facilitate the global role of the City of London, and underpin the economic stability of many small Caribbean nations.

That aside, the Panama papers raise many longer term issues that are more significant than the naming and shaming of individuals.

The first is that much of what is happening globally is being driven by an army of wealth management intermediaries – the lawyers, bankers, tax accountants, and other assorted advisers – who see huge business opportunity in advising the super-rich on ways that enable them to avoid taxes, debts, legal judgments, and other obligations that ordinary citizens, including the moderately wealthy cannot avoid. As with the counter-narcotics industry, the arms trade, NGOs and many other industries, once institutionalised such service roles become self-perpetuating, skewed and expanded in their purpose, and need to be better regulated and policed on an international basis.

A second emerging issue, despite the willingness of the Caribbean Overseas Territories to find ways to accommodate international requirements on information exchange and beneficial ownership, is that their role is being eclipsed by more opaque locations like Wyoming and Delaware in the US, Luxembourg in Europe, and Singapore, to say nothing of the rarely spoken about small nations like the Maldives or the Marshall Islands. The reality is that without all countries, dependent and independent, agreeing multilaterally to cease to offer offshore financial services, the desire of the powerful, wealthy and the criminal to hide their monetary affairs offshore will always be facilitated by one or another country.

A third is that the Panama Papers raise serious questions about regional cyber security. Mossack Fonseca have said that the leaked material became public because its site was hacked by someone in Europe.  If this proves to be the case, it raises all sorts of new issues about the security of offshore financial centres and the ability of governments, lawyers, banks and other intermediaries to protect all of their client’s secrets.

The fourth is the inability of Mr Corbyn and other politicians to understand the consequences of the nuclear option of imposing direct rule on nations like the BVI and Bermuda. They fail to think through the long term consequences at an international and regional level of such a response, or the probability that such actions would lead the overseas territories to accelerate their desire for independence; an outcome that could diminish present levels of co-operation with the UK and others.

And finally, while much of what has been made public may be distasteful, immoral and damaging, the impact is only likely to be felt in the most democratic of societies. It is no surprise that in Iceland the revelations have resulted in the resignation of the Prime Minister, but elsewhere the issue is likely to serve only to maintain the influence and power of those allegedly involved or who they protect, in the certain knowledge that if they were ever to lose office, the information would be used against them.

It is also worth observing that at the other end of the spectrum, it is likely that many of so far unnamed companies and individuals, who are of no interest to the international media, were using the services of Mossack Fonseca for perfectly legitimate reasons to structure international deals, establish family trusts, to create cross border joint ventures, and for other activities that are perfectly normal, unless they involve the use of criminal proceeds, tax evasion or fraud.

Despite this, the angry response to the emergence of a new wealthy elite, paying little tax will not go away, especially so in austerity hit developed nations that have sought to increase their revenue from their middle classes in order to deliver social services for all.

This is not to argue that what has been happening is correct let alone just, but to suggest that if governments like the UK, US and others willingly establish such facilities in order to gain economic advantage for their enterprises and financial centres, it is hardly surprising that aggressive tax advisers, political autocrats and the super-rich, will seize the opportunity to use such offshore anonymity to increase their wealth and power.

SAN JUAN, Puerto Rico – Gov. Alejandro Garcia Padilla announced Saturday that he has declared a state of emergency at the Government Development Bank aimed at ensuring that Puerto Ricans continue to receive essential government services.

The governor said he issued an executive order Friday to halt the erosion of the bank’s dwindling liquidity by only allowing withdrawals to fund necessary costs for health, public safety and education services. The order does not call for a moratorium on the bank’s principal or interest payments. Garcia said the government bank is in talks with creditors regarding a nearly $423 million payment due in May.

The order is the first taken under the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act enacted last week, which gives the governor emergency powers to deal with the fiscal crisis, including the ability to declare a moratorium on all bond payments.

“The GDB’s financial condition has continued to deteriorate and, absent the measures ordered in this executive order, there is an imminent risk of a drastic decrease in GDB’s liquidity in the immediate term. This, in turn, would jeopardize the provision of essential services by the commonwealth,” the order states.

It notes that the government and creditors are in discussions to address the government’s immediate liquidity challenges and to assure its debt service is sustainable over the long-term.

Because restructuring could take time, “the commonwealth has a duty to take any and all actions reasonable and necessary to protect the health, safety and welfare of its residents by ensuring the continuation of essential services,” the order adds.

The governor’s declaration of an emergency at the government bank was attacked by political opponents. House Minority Leader Jennifer Gonzalez said it is the first in a series of “dictatorial actions” the governor is planning to take after approving the debt moratorium law.

Resident Commissioner Pedro Pierluisi, Puerto Rico’s sole Congressional representative, called the declaration an “illegitimate exercise of power.”

“This governor and legislature have created a crisis without precedent on the island,” he said.

Without debt restructuring, Puerto Rico will be forced to default as it faces nearly $2.5 billion in bond payments from May through July, government officials have said.

The U.S. House Natural Resources Committee next week will consider legislation that will provide bankruptcy powers to Puerto Rico while subjecting it to the authority of a federal oversight board. The U.S. Supreme Court is also reviewing federal court rulings that said a local bankruptcy law enacted by the commonwealth is unconstitutional.

Garcia announced in June that Puerto Rico’s nearly $70 billion debt was not payable. Since then, a deal has been struck with creditors to restructure much of the Puerto Rico Electric Power Authority’s nearly $9 billion debt. (AP)

PHILIPSBURG, St. Maarten - Earlier this week, Minister in charge of Finance, the Honorable Richard Gibson confirmed that the budget subsidy for the St. Maarten Carnival Development Foundation has been approved.

However, the Minister was not in a position to say how much, as this the responsibility of the ministry of TEATT.

The Minister, who was at the time responding to a question put to him, also addressed matters pertaining to the various foundations on the island.

More now via PodCast.

PHILIPSBURG, St. Maarten - As of April 8 ,2016 Benjamin & Parker (This email address is being protected from spambots. You need JavaScript enabled to view it." target="_blank">This email address is being protected from spambots. You need JavaScript enabled to view it.), Certified Risk Auditors  and Tax Specialists, will give free online consultation on business Cost Reduction and Efficiency improvement for 2 weeks.

Business enterprising has become a new science with emphasis on reduction of financial waste and cash flow improvement. The mentioned components go hand in hand to secure cash inflow.

Compliance of Tax obligations and a sustainable operation business cycle are the fundamental conditions to have a healthy business health.

Business owners must recognize conditions, characteristics and indicators which are the operation alert warnings, when results are negatively influenced by internal factors. 

In order to assist the clients or potential clients Benjamin & Parkers outlines the conditions for recognition purposes to make the stakeholders conscious of the developing scenarios within their corporate structure that are costing them financial resources short term and long term:

Conditions

  • Irrational growth of HR infrastructure (too many employees, no benefits)

  • Risk management guidelines not in place

  • Centralized Management Logistics Supervision tools not in place.

    Short term impact results

  • Consistent and uncontainable cost growth

  • Poor cost triggers detection tools

  • Untimely Corporate actions

  • Unsupervised personnel procedure deviations

  • Costs recovery difficulties.

    Untreated conditions develop into major financial problems.

    Conditions

  • Financial resources absorption by Corporate costs.

  • Major capital investments to attempt cost recovery

  • Persistent inefficient workflows fuelling consistent Cash deficits.

    Long term impact results

  • Irrecoverable financial losses

  • Further deterioration of financial position

  • Uncertain financial capacity to secure business continuity 

    Any businessman that recognizes these business conditions, can be sure that company is in need of a REC Audit, to diagnose the company cash flow triggers and improve the operation structure in order to enhance cash money streams.

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