FSA Issues Statement On OCCRP/News784 Article Of May 18th, 2020

The Financial Services Authority (FSA) is aware of an article published by the international investigative news agency, Organized Crime and Corruption Reporting Project (OCCRP) and local news online outlet, News784, which alleges that two international business companies (IBCs) incorporated in St. Vincent and the Grenadines (SVG) are part of a network or group of companies based in Estonia, against which there are allegations of fraud.

The relevant authorities in St. Vincent and the Grenadines including but not restricted to the Financial Intelligence Unit (FIU) and the National Anti-Money Laundering Committee (NAMLC), consider matters of this nature to be very serious and any possible misappropriation of funds from clients to be equally serious.

Investigations are ongoing in St. Vincent and the Grenadines to determine any potential culpability, in order for any ensuing appropriate action to be taken. St. Vincent and the Grenadines is also committed to giving full cooperation to any international regulatory agency in investigating matters of this nature.

IBCs are incorporated in St. Vincent and the Grenadines by the FSA, an autonomous governmental statutory body responsible for the regulation and supervision of the country’s international financial services and non- bank financial services. IBCs are not regulated entities but are duly registered entities which are required to abide with the provisions of its governing legislation, the International Business Companies (Amendment and Consolidation) Act.

IBCs are authorized to engage in any business activity, once legal, without additional approval from the FSA, except where their proposed business amounts to activities which are required to be licensed, such as banking, insurance or mutual fund business. These requirements for registration, as opposed to regulation, are similar to that which exists in numerous other jurisdictions, which offer international financial services.

There appears to be a growing trend worldwide where a number of IBCs are being established for the purpose of carrying out the business of Foreign Exchange (Forex) Trading and Brokerage and other related activities. Forex Trading and Brokerage is the activity of trading in currencies. It involves traders speculating on the future rate of a particular currency and hoping that they get the benefit of increases in currency rates. Forex Trading can be done from anywhere in the world with the only tools being an internet connection and a computer.

Until such time that appropriate legislation is put in place to address Forex activities, there is no legal prohibition against an IBC carrying out that activity or from so stating in its Articles of Incorporation. It is however fully expected that the IBC would obtain the appropriate licence to conduct such business in the jurisdiction where the activity occurs, notwithstanding that its incorporation or registration is in another country.

In recognition of the problem being caused by IBCs which engage in forex and related activities, the FSA has over the years publicly issued advisories and warnings via its website advising the public that any forex business undertaken by St. Vincent and the Grenadines IBCs is unregulated by the FSA and that clients should be aware of this and exercise caution when doing such business.

St. Vincent and the Grenadines continues to be vigilant in ensuring that international standards and best practices govern its international financial services and is committed to promoting safe and sound practices, as far as possible, by entities incorporated in its jurisdiction.

Submitted by:

Financial Services Authority

 June 5th, 2020

1 Comment

  1. Every time I promise myself to stop commenting on these news articles I meet some well educated multi-lettered individual who is trying to give us a lesson in “hoodwinkiddy”. So the FSA registers an IBC it cannot regulate in SVG. It is not necessary to tell us, what are the requirements for registration, since we are to dumb to understand anyway. But they proceed to give us a short lesson in forex-exchange and brokerages, since that, we would understand. We only need a computer and internet and no money I suppose? The IBC is governed by an act of who, when or where? Anyway the IBC is now able to go in another jurisdiction not obtain the relevant licenses or legal documents there and proceed to commit fraud tarnishing the “good name” of SVG. Which begs me to ask we know what they don’t need to engage in legal activities, what do they need for illegal ones. A gazillionaire, living on the North Pole sent out his homer pigeon to find places to invest. The pigeon returns and tells him that there is this beautiful little island, where he can register an IBC not be regulated and go in another jurisdiction and commit fraud. He says is that so, now there is somewhere I’d like to go invest. You see me if it’s one thing I’ve learned is that where there is dumb, there is always dumber, and before I appear any dumber, I will stick to my first promise.

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