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Remarks by Jean Paul Adam, Minister for Foreign Affairs on behalf of the Minister for Finance, Trade and investment, to the 6th Global Forum on transparency and exchange of information for tax purposes. Jakarta, Indonesia 21st November 2013

21.11.2013

Mr. Chairman,

Thank you for giving Seychelles the opportunity to address the Global Forum at this juncture- and on an issue which goes to the heart of the future governance of financial services, particularly in small states.

I would like to underline at the outset, the importance that Seychelles places on the work of this forum.

It is only through the observance of good practices, accountability and of transparency, that we can effectively develop our economies around financial services.

We fully subscribe to the principles of governance that are enshrined in the OECD peer review.

However, this same commitment to the principle of transparency and accountability impels us to also point out where an existing process does not adequately reflect the situation of a state under review.

I am addressing this forum to provide clarification to concerns that Seychelles has raised with regards to the recently completed Phase II review.

We greatly regret the overall outcome of this review and we are disappointed with its conclusion that Seychelles is non-compliant with the terms of the review.

We are making this point, not because we dispute the OECD process- but because Seychelles has consistently worked in cooperation with the OECD to implement the best practice with the resources at its disposal, and we are disappointed that these efforts are deemed to fall short of the expectations of the review.

In a number of areas in relation to financial governance, Seychelles has actually led the way in relation to enhancing regional cooperation relating to tackling financial crimes and money laundering.  We have been one of the frontline states in pursing the financial flows linked to piracy.  We have also intercepted a significant amount of illicit financial flows into our own jurisdiction, and worked with partners to bring the perpetrators to justice.

Seychelles will never hide from its obligations.

We believe in placing our commitments in the sunlight for all to draw their own conclusions.

In the same way that we do not believe that financial transactions should be carried out in the shadows, neither should our reviews be subject of secrecy or shame.

In 8 of the 10 areas under review, the peer review group has agreed that Seychelles has met the standard.

In the two areas, where we have been deemed non-compliant- we would like to note that Seychelles has responded to all requests, and in the period under review has taken significant measures to strengthen both its verifications, and its ability to enforce.

This has built on our actions during phase 1 which already recognized that the essential elements were in place.

Contrary to what is stated in the report, the Seychelles International Business Authority has taken action to sanction companies that have deemed to be non-cooperative in accordance with its laws and procedures, which have been benchmarked against many other jurisdictions.

Our delegation understands that the nature of international financial governance must balance the need for respect of individual states policy space, and the need for managing international financial risk.

When viewing Seychelles’ record through this lens in retrospect, it is difficult to pinpoint what Seychelles could have done differently to avoid such a rating, as our implementation does not differ greatly from a number of similar jurisdictions.

However, when looking ahead, we are clear on what must be done.

And it is in this spirit Mr. Chairman, that I address you today.

While Seychelles has objected to the conclusions of this review- we take the floor publicly today to brief you on the measures that we have adopted as swiftly as possible to address the issues raised.

Firstly, Seychelles has already committed to sign the Multilateral Convention and is making the necessary amendments which will allow it to do so to its domestic legislation by December 2013.

Secondly, proposed amendments to the International Business Companies Act have already been approved by the Cabinet of Ministers and have been gazetted and will be heard by our National Assembly before the end of the year.  This amendment will effectively eliminate the concept of bearer shares and will also strengthen the legislation providing for effective records to be kept by both the companies and the agents, and raise the sanctions applicable.

Mr. Chairman,

We have indicated our determination to act on these issues as quickly as practicable as a demonstration of the commitment of Seychelles’ to the OECD Global Forum.

We stand ready to answer any questions that our partners may have, while also reiterating our desire to work with as many partners as possible towards sharing and implementing good practices.  We have also requested additional technical assistance from the Secretariat and allow me the opportunity of this forum to warmly thank all the individuals that have helped and supported the process in so many ways.

Mr. Chairman, we should not champion a process that requires the minimum.

We must rather aim to adopt governance frameworks based on good practices and incremental improvements reflecting the capacity of individual states.

We must be champions of a process whereby all states contribute to simultaneously strengthen global governance through their own institutions.

We submit Mr. Chairman that Seychelles has done its utmost to contribute to this- and we are convinced that the measures that I have announced today will allow us to further address any gaps that may remain.

We look forward to an early follow up report to take into consideration Seychelles’ actions on this subject.

I thank you.

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