Curacao International Banking License
Banks and other financial institutions in Curaçao are licensed under the National Ordinance on the Supervision of Banking and Credit Institutions of 1994. Licenses are issued by the Bank of Curaçao and Sint Maarten (the central bank). See Law of Offshore for details of the licensing and supervisory process; see Offshore Legal and Tax Regimes for details of the taxation of offshore banks.
The central bank distinguishes between ‘Consolidated International Banks’ which are normally owned or controlled by world Top 1,000 banks and which are subject to adequate consolidated supervision through their parent company, and ‘Non-Consolidated International Banks’ which are normally owned or controlled by a non-banking organization, and for which the central bank acts as the primary supervisor.
The central bank further distinguishes between onshore banks, which are licensed to do business with both local and foreign parties, and offshore banks, which are licensed for external business only. Offshore banks are known as International Credit Institutions and are exempt from foreign exchange controls. An offshore bank can operate either as an NABV (Netherlands Antilles Besloten Vennootschap), a Netherlands Antilles limited company (NV) or as a branch. In 2009, there were 12 onshore financial institutions and about 40 offshore financial institutions in the Netherlands Antilles, with assets amounting to about NaF80bn.
Due to its proximity to South and Central America, the Netherlands Antilles have inevitably been used both for physical drug-running and for money-laundering. The Government is working with Dutch officials to establish legislation that will improve the ability of law enforcement officials to investigate drug-related financial transactions and accounts, and to require (local, but not offshore) financial institutions to investigate the origins of large cash deposits; although the Government of the Netherlands Antilles co-operates well with investigations into drug-related crime, these legislative controls are not yet in place at the time of writing. Parallel legislation to give the Dutch authorities command and control over a newly-established Antillean-Aruban Coast Guard (which they had asked for) has been defeated twice in the Antillean parliament.
In 2008, the Curaçao International Financial Services Association, Ernst and Young Tax Advisers and Amicorp Inc submitted a report on the possibilities of developing Islamic finance in the Netherlands Antilles to the State Secretary of Finance, Alex Rosaria.
According to the feasibility report, entitled: ‘The Netherlands Antilles: A New Mecca for Islamic Financing?’ there are certain immediate actions that the local financial center can take in order to accommodate Islamic financing.
However, the report clearly indicated that if the Netherlands Antilles wishes to become an important player in Islamic financing in this hemisphere, more profound changes and adaptations are needed in the country’s legal and regulatory framework.
The reason for the completion of such a study is clear, according to Rosaria:
“If we are serious about being in the top-ten international financial centers of the world, we can not, not be involved with Islamic financing,” he announced, going on to observe that the Netherlands Antilles is currently negotiating a Double Taxation Agreement with one of the most important players of Islamic financing, the United Arab Emirates.
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