The tip of the iceberg

We welcome the speedy move to bring this Bill to Parliament in order to bring local banks in conformance with the Foreign Account Tax Compliance Act of the United States. But as noted by the new president of the Bankers Association – Scotiabank Managing Director Anya Schnoor – several other pieces of legislation are outstanding.

There is a pressing need for enactment of: new insurance legislation; amendments to the Proceeds of Crime Act; revamped Financial Obligations Regulations; new cybercrime legislation, as well as measures to strengthen the Anti- Terrorism Act and the Electronic Transfer of Funds Crime Act.

“The signing of the intergovernmental agreement... is just the start of the process,” Schnoor pointed out on Wednesday.

The next step is the coming into force of the law and then, more crucially, implementation by law enforcement authorities.

In relation to the latter, this is where even more sustained effort is required outside of the Parliament.

Too often there is a feeling that all that is required are new laws on the books. But new laws are useless if State agencies do not have the capacity to enforce existing measures.

In relation to the insurance industry, new legislation has been needed since the Clico collapse of 2009 made it clear that the existing regime was not fit for purpose. The failure of the State to pass new laws in the wake of that $20 billion debacle has damaged the economy’s ability to recover. Who can have confidence in insurance companies if nothing has changed in relation to State regulation over the last seven years? While the Ministry of the Attorney General has done a good job of invoking anti-terror laws to empower the State to look into and freeze the assets of any entities with ties to known terror cells, the formulations within the anti-terror statutes themselves leave much to be desired. In the first place, they are convoluted and may be difficult to prove in practice.

Also, given the fast pace of changes which we have seen in the theatre of war, anti-terror legislation needs to be malleable in order to keep pace. At the very least, it requires regular updating or mechanisms which allow law enforcement agencies to adopt a more purposive approach.

As international bodies have pointed out repeatedly, there is a financial aspect to terrorism which is key in combating it. This is not only a question of enhancing surveillance measures, it is also about giving organisations like the Financial Intelligence Unit and the Police Service more capacity to go after the money. If the State is not in a position to effectively combat terrorist financing, not only does the financial sector suffer, but so too does the entire society.

It is also important for the State to properly police cybercrime if the financial sector is to have the level of security that is required for it to flourish. The days of cash are almost over. With most transactions done online or electronically, the very foundation of our system of commerce will soon depend on how well the State can prevent cyber infractions.

Imbert was yesterday adamant that political considerations should be removed from implementation of the tax agreement with the US.

“We are not playing politics here,” Imbert said. At the same time, he tabled a new provision in the Bill to insert a proclamation clause to give the State time to promulgate regulations.

Those outstanding regulations must be completed as a matter of urgency.

For now, whatever the fate of the Tax Information Exchange Agreement Bill, the State has much more work to do.