• Barbados Commits to the Fight Against Terrorism
• United States Government Issues Anti-Terrorism Executive Order
• Barbados Creates Emergency Economic Council
• Barbados Continues Anti-Money Laundering Campaign
• Government Portfolios Restructured
• Assignment of Ministers and Parliamentary Secretaries
• Indiscriminate Links between Emerging Financial Centres and Terrorism Unjustified
• Canada: Barbados Business Association and Barbados International Insurance Association Visit Ottawa and Toronto
• Barbados Investment and Regulatory Agencies

Barbados Enhances Security and Commits to Fight Terrorism

The current war against terrorism highlights the problems associated with high levels of interconnectivity and the distribution of power between the major actors in the international system. The once relatively "predictable" global environment is now riddled with uncertainties and hence most countries are reviewing and restructuring existing arrangements in an effort to sustain their positions in the global political economy. The immediate aim of these reviews and restructuring exercises is to improve on the less than adequate security systems that may presently assist terrorist networks, as well as revive the slump in consumer confidence initiated by the multiple attacks in the United States.

Barbados has responded to the terrorist attack in the United States by expressing its full support for the efforts underway to track terrorists and terrorist funds. Prime Minister Owen Arthur has issued a statement condemning the attack and supporting the call for the perpetrators to be brought to justice. The International Business and Financial Division is also reviewing its accounts to determine whether they are linked or appear to be linked to terrorist activity. This comes at a time when Barbados has already enhanced its application and renewal procedures to ensure that there is greater disclosure. The Minister responsible for International Transportation the Hon. Noel Lynch has also indicated that his Ministry has also moved speedily to upgrade security at both the air and sea ports and is currently compliant with new international standards in this area.

On September 28th 2001 the Minister responsible for Foreign Affairs, the Hon. Billie Miller outlined Barbados' foreign services initiatives. As a member of the United Nations, Barbados supported United Nations General Assembly Resolution #56/1. Barbados has therefore committed itself as a member of the United Nations to cooperate to bring to justice the perpetrators, organisers and sponsors of the terrorist attacks, and to redouble its efforts to prevent and suppress terrorist acts.

At the hemispheric level, Barbados has participated in a Consultation of Foreign Ministers of the Organisation of American States, which on September 21, 2001 adopted a resolution condemning the attack, and committing Governments to strengthen cooperation to prevent, combat and eliminate terrorism in the hemisphere. At that meeting, Ambassador Michael King of Barbados' Washington Mission made a comprehensive unequivocal statement condemning terrorism.
 

Emergency Economic Council Established

On September 28th 2001, Prime Minister Owen Arthur, who is also the Minister of Finance convened a meeting of public and private sector agencies in order to discuss the economic issues that would face Barbados in the wake of the current political and economic global crisis. At that meeting several initiatives were agreed upon:

• The Ministry of Economic Development was assigned the day to day responsibility for co-ordinating and managing the country's economic response to the crisis, supported by an institutional arrangement which draws upon all the skills and resources available across the social partnership. A committee of government officials will report to an Emergency Economic Council chaired by the Prime Minister and including the Minister of Economic Development, the Minister of Tourism and representatives of labour and business.
   
• The State will provide a lifeline for the productive sectors and the lifeline must ensure that viable economic enterprises survive and emerge from the catastrophe.
   
• With the threat of lay-offs in the private sector Government undertakes in the foreseeable future, to maintain public sector employment to ensure a satisfactory minimum level of domestic demand.
   
• There will be support for private and public sector investments with identified financing, which will over the next two years, create new, fresh productive capacity which can be pressed immediately into service once market conditions improve.
   
• Additional resources will be directed to tourism to assist in product upgrade, service upgrade, debt service support, and the carrying out of a strategic price discount programme.
   
• There will be an invocation wherever possible of protection and safeguard mechanisms, including some that have been removed recently, to give manufacturers and farmers the benefit of a larger, protected local market.
   
• The Central Bank in consultation with the Ministry of Finance will institute a regime to further reduce the burden on the cash flow of business concerns, and refine the various loan schemes of the Bank to provide additional concessions and greater access to such concessions by a wider range of businesses.

The following are excerpts from the speech delivered by the Prime Minister at the opening of the consultation:

Destruction of a Paradigm

Our world has in the past known global recessions induced by policy failures and by adverse market and business cycles. The dimensions of such recessions were easily within the capacity of economists to measure, and hence to devise workable responses.

What confronts us now is the spectre of global economic catastrophe which is due not to policy or market failures, but destruction of a paradigm.

We were getting used to functioning effectively in a new globalised economy, central to whose operations were the products of revolution in communication and information technology.

Indeed we looked forward to successfully taking our place in a new world economy in which the ease and safety of international travel made possible the prospect for the sustained development of international tourism; in which information, goods and services, capital, technology and ideas would flow smoothly across nations, invigorating new economic activity in places where such activity could not have been previously contemplated. Such a concept underpinned, for example, our prospects to evolve and develop Barbados as a major financial centre for international business.

The Only Certainty is the Infinite Uncertainty

It is obvious that the only thing about which we can be certain is the infinite uncertainty which confronts us. We are not sure what will be the exact response of the international community to the terrorist threat, nor what its overall economic effect will be. We are not sure how long this crisis will last, what form it will take, how it will work itself out.

Barbados must therefore now prepare itself to cope with any economic eventuality, to institute measures that are flexible enough to enable us to adjust as events unfold, and to so protect the viability of our enterprises and our main productive sectors that once the global crisis lifts, we can resume our growth and development with renewed vigour.

Response of the International Community

Equally, the international financial community has traditionally required developing countries to rely heavily on policy responses to deal with economic crisis. But the situation that we face has not been caused by policy failure, recklessness nor financial excesses by developing countries.

Policy responses without the commitment of real financial resources will therefore not suffice. Barbados therefore stands ready to support a well-conceived response from the international financial community to the crisis at hand.
 

U.S. Government Issues Anti-Terrorism Executive Order

On September 24, 2001, the United States government issued a fact sheet outlining the steps taken by the administration to identify terrorists and their source of funds. The fact sheet issued by that government is outlined below.

"The President has directed the first strike on the global terror network today by issuing an Executive Order to starve terrorists of their support funds. The Order expands the Treasury Department's power to target the support structure of terrorist organizations, freeze the U.S. assets and block the U.S. transactions of terrorists and those that support them, and increases our ability to block U.S. assets of, and deny access to U.S. markets to, foreign banks who refuse to cooperate with U.S. authorities to identify and freeze terrorist assets abroad.

Disrupting the Financial Infrastructure of Terrorism

• Targets all individuals and institutions linked to global terrorism.
   
• Allows the Treasury Department to freeze U.S. assets and block U.S. transactions of any person or institution associated with terrorists or terrorist organizations.
   
• Names specific individuals and organizations whose assets and transactions are to be blocked.
   
• Identifies charitable organizations that secretly funnel money to al-Qaeda.
   
• Provides donors information about charitable groups who fund terrorist organizations.
   
• States the President's intent to punish those financial institutions at home and abroad that continue to provide resources and/or services to terrorist organizations

Authorities Broadened

The new Executive order broadens existing authority in three principal ways:

• It expands the coverage of existing Executive orders from terrorism in the Middle East to global terrorism;
   
• The Order expands the class of targeted groups to include all those who are "associated with" designated terrorist groups; and
   
• Establishes our ability to block the U.S. assets of, and deny access to U.S. markets to, those foreign banks that refuse to freeze terrorist assets.

Blocking Terrorist Assets

• The Order prohibits U.S. transactions with those terrorist organizations, leaders, and corporate and charitable fronts listed in the Annex.
   
• Eleven terrorist organizations are listed in the Order, including organizations that make up the al-Qaeda network.
   
• A dozen terrorist leaders are listed, including Osama bin Ladin and his chief lieutenants, three charitable organizations, and one corporate front organization are identified as well.
   
• The Order authorizes the Secretary of State and the Secretary of the Treasury to make additional terrorist designations in the coming weeks and months.

Other Actions in War on Terrorist Financing

This Executive Order is part of a broader strategy that we have developed for suppressing terrorist financing:

• A Foreign Terrorist Asset Tracking Center (FTAT) is up and running. The FTAT is a multi-agency task force that will identify the network of terrorist funding and freeze assets before new acts of terrorism take place.
   
• The President, the Secretary of the Treasury, the Secretary of State and others are working with our allies around the world to tackle the financial underpinnings of terrorism. We are working through the G-8 and the United Nations. Already, several of our allies, including Switzerland and Britain, have frozen accounts of suspected terrorists." For more information see: http://www.whitehouse.gov/news/releases/2001/09/resources.html

Barbados Continues its Anti-money Laundering Drive

On September 25, 2001 the G-7 Finance Ministers issued a statement concerning their economic and financial situation and their common cause in strengthening the international fight against terrorism. In that statement the G-7 indicated that they would also strengthen the international fight against the financing of terrorism. The statement issued a call on all nations of the world to cooperate in this fight. In particular, they called on the OECD Financial Action Task Force to encompass terrorist financing into its activities.

Barbados is not only committed to responding to this call but has the mechanisms in place to deal with implementing any international standards that are agreed by the international community. Barbados is currently engaged in a self-assessment and mutual evaluation process through the Caribbean Financial Action Task Force to ensure that it continues to meet the standards as envisaged by the United Nations and the Financial Action Task Force (FATF).

A suite of legislation has been enacted over a period of time with the objective of meeting the 40 recommendations of the Caribbean FATF and the FATF. These include:

• The Proceeds of Crime Act Cap 143 of the Laws of Barbados
   
• The Mutual Assistance in Criminal Matters Act Cap 140A of the Laws of Barbados
   
• The Money Laundering (Prevention and Control) Act No. 38 of 1998 of the Laws of Barbados

Provisions which help to combat money laundering are also contained in the Financial Institutions Act, No. 16 of 1996, the Offshore Banking Act Cap 325, the Exempt Insurance Act Cap 305A, Bi-lateral Investment Treaties, Double Taxation Agreements and Exchange of Information Agreements.

Barbados has had the benefit of an Australian expert provided by the United Nations for one year to assist it in establishing its Financial Intelligence Unit.

It is for these reasons that Barbados has not been included in the list of countries which the Financial Action Task Force (FATF) characterised as non-cooperative. The Barbados Anti-Money Laundering Authority through its operational arm, the Financial Intelligence Unit has been working closely with the Central Bank of Barbados, the Office of the Supervisor of Insurance and the International Business and Financial Services Office in its efforts to ensure that licensed financial institutions establish systems and procedures for effectively implementing the provisions of the Money Laundering Prevention and Control Act. These systems and procedures include the keeping of records, the introduction of know-your customer procedures, the reporting of unusual transactions and the adequate training of staff.

The Financial Intelligence Unit has also been instrumental in assisting various agencies in developing anti-money laundering guidelines and know-your-customer rules, which are required to effectively combat money laundering. The Anti-Money Laundering Authority has also established a comprehensive programme for sensitising financial institutions about their obligations under the legislation. The Unit has also taken the matter to the public to ensure that all Barbadian businesspersons are involved in the effort to detect money-laundering activity in Barbados.

The International Business and Financial Services Division, which has supervisory and regulatory responsibility in respect of International Business Companies and International Societies With Restricted Liability has from October 1, 2001 introduced new application forms which are designed to ensure greater disclosure of information.
 

Indiscriminate Link between Terrorism and Emerging
Financial Centres Unjustified

More international media houses should act responsibly and follow the sober and deliberate approach taken by the United States government in addressing the issue of terrorist funding. The threat of terrorism is a serious one and it is unfortunate that some would seek to trivialise the problem facing the international community with hysteria and by putting an undue focus on areas that might not be objectively either the only source or the critical source of the problem. One journalist has questioned the existence of Barclays Bank Plc in the Caribbean without making the effort to research the history of the bank, which came to the region as one of the appendages of the British Empire. Let us hope that we will see more objective reporting in the future. For more information, see http://www. itio.org
 

Government Portfolios Restructured

The Prime Minister has engaged in a strategic re-ordering of the business of Government through a restructure of portfolios. This has also resulted in a re-allocation of Permanent Secretaries. This Ministry is now styled the Ministry of Economic Development and continues to be headed by Minister Reginald Farley. The Minister's portfolio includes:

• Economic Affairs
• Corporate Affairs and Intellectual Property
• Telecommunications
• Industry
• International Business and Financial Services
• Energy
• Barbados Investment and Development Corporation
• The Advisory Committee on International Business

There are two Permanent Secretaries assigned to this Ministry, Mr. Bentley Gibbs and Mr. Carson Brown. The Ministry bids farewell to Mr. Lionel Weekes and thanks him for his contribution to the Ministry. Mr. Weekes moves on to the Ministry responsible for labour and social security.
 

Canada: Barbados Business Association and Barbados International Insurance Association Visit Ottawa and Toronto

The Barbados International Insurance Association attended the CRIMS conference and hosted clients and colleagues to a cocktail reception. The event was a resounding success. The Canada: Barbados Business Association carried its annual promotional tour to Toronto this year. Over 150 persons attended the event, which was held on September 14, 2001 including persons with operations already located in Barbados as well as those that are interested in establishing new businesses in Barbados. The presentations included:

• International Tax Planning - Wade M. George, Partner, International Tax Services, Ernst & Young, Bridgetown & Rick Whitley, Partner, International Tax Services, KPMG, Toronto
• The OECD Harmful Tax Practices - Paul Tadros, Partner - US International Tax Services, PriceWaterhouseCoopers LLP
• Using a Barbados IBC as part of an eBusiness tax strategy, Karen Wensley, Ernst & Young
• Private Wealth Planning in Barbados - Penny Ettinger, Managing Director, Bayshore Bank & Trust
• Captive Insurance Companies, Vinston Hampden, AON Barbados
• Nicholas Crichlow - MARSH Barbados

For further information contact http://barbados.org/business/cbba

Barbados Investment & Regulatory Agencies