 |
 |
 |
 |
 |
 |
 |
 |
|
|||||||||||
|
|
|
|
||||||||
|
|
|
|
||||||||
|
Newsletter | Articles SEYCHELLES ABOLISHES EDA The Seychelles National Assembly voted in late July to repeal the Economic Development Act, 1995, better known as the EDA, which effectively removes it from the statute books. Although enacted in 1995, the Act was not put into effect after it attracted international controversy. Whereas the preamble of the EDA identified its object as 'to provide for the granting of incentives and concessions to qualified individuals desirous of investing in Seychelles for the purpose of ensuring a high level of sustainable economic growth in Seychelles' and thereby encouraging inward investment, the EDA attracted considerable adverse attention over concerns that it could be exploited to assist in money laundering or other illicit activities. Pursuant to the EDA an approved foreign investor who could invest not less than US$10,000,000 in Seychelles could, at the discretion of the Board established under the Act, be granted various concessions or incentives, including, without limitation, immunity from prosecution for all criminal proceedings whatsoever except criminal proceedings in respect of offences involving acts of violence and drug trafficking in Seychelles. Following US Treasury warnings to financial institutions several international banks then avoided Seychelles with respect to money transfers and offshore services. Such banks took those protective steps in the context of the adverse publicity and the present international climate as to the issue of money laundering. Last year, the Republic Bank of New York named Seychelles as one of the countries it would not transfer money to, after it was caught in a money laundering scandals involving Russians. There was no evidence that Seychelles was involved, though. However, this precipitated caution by a number of international banks on money transfers to Seychelles. The controversy clouded the fact that Seychelles enacted a comprehensive Anti-money Laundering Act in 1996, as well as the Mutual Assistance in Criminal Matters Act in 1997, based on the Commonwealth model. Seychelles adopted the Basle 40 recommendations on 'know your customer' principle and application by banks before opening accounts; imposed stringent screening of applicants in respect of offshore services, including offshore banking licences (in fact no offshore banking licence has been issued so far) and has cooperated with the G7 Financial Stability Forum, the OECD's Financial Action Task Force and the OECD standards on the competitive tax jurisdiction, etc, as to offshore industry standards and requirements. The Seychelles was not mentioned in the FATF report of June 2000 after the authorities embarked on a campaign of information with the OECD and international financial institutions. The recently formed Seychelles Association of Offshore Practitioners and Registered Agents (SAOPRA), comprising as members all of the Registered Agents and Licensed Trustees authorised under the regulatory legislation to provide offshore corporate and trustee services from Seychelles welcomed the repeal of the EDA and believes these measures will ensure industry integrity, without diluting the many attractive corporate and trust features associated with Seychelles offshore legislation. |