§ Mr. CousinsTo ask the Chancellor of the Exchequer what the recommendations are of the KPMG report on the state of financial regulation in the British overseas territories; and what steps have been taken to implement them. [20208]
§ Ruth KellyThe KPMG Review of Financial Regulation in the Caribbean Overseas Territories and Bermuda recommended: the establishment of independent regulatory authorities; the introduction of investigative powers to assist inquiries by overseas regulators; and the establishment of comprehensive anti-money laundering networks.
All the overseas territories now have comprehensive money laundering frameworks fully in place.
326WGood progress has been made in providing the legal basis for the introduction of powers to obtain information to assist foreign regulators. The Cayman Island, the British Virgin Islands, the Turks and Caicos Islands and Montserrat have already introduced relevant provision. Bermuda's existing regulatory powers are being strengthened. Anguilla has compulsory powers legislation in draft.
Considerable progress has been made in establishing independent regulatory authorities. The Turks and Caicos Islands have introduced legislation to establish an independent authority and legislation is in an advanced stage in the British Virgin Islands, Anguilla and Montserrat. Bermuda already has an independent authority for banking and securities; it is now proceeding to complete the process for the insurance sector by the end of 2001. Cayman expects to enact the relevant legislation in the first quarter of 2002.
The Caribbean Overseas Territories and Bermuda have made a commitment substantially to implement the remainder of the KPMG recommendations by the summer of 2002. They have agreed to publish further reports by February 2002 explaining how their implementation plans are progressing. This should place them in a strong position prior to their forthcoming examination by the International Monetary Fund under the Financial Stability Forum's initiative into offshore financial centres.
The overseas territories and Bermuda have pledged to play their full part in the international efforts to close off financial networks to terrorism as effectively as dealing with other types of serious criminal activity.
The UK Government will continue to work closely with the overseas territories both on closing off financial networks as well as on the implementation of the KMPG recommendations with the aim of helping them meet international standards in full.