Home | Databases | WorldLII | Search | Feedback Consolidated Acts of Samoa 1996

Off-Shore Banking Act 1988

LAWS OF WESTERN SAMOA

OFF-SHORE BANKING

Arrangement of Provisions

-------------------------------------------

OFF-SHORE BANKING ACT 1988

1988, No. 6

AN ACT to provide for off-shore banking.

[17 February 1988]

BE IT ENACTED by the Legislative Assembly of Western Samoa in Parliament assembled as follows:-

PART I
Preliminary

1. Short title and commencement-(1) This Act may be cited as the Off-Shore Banking Act 1987.

(2) This Act shall come into force on such date as may be specified by the Head of State by Order.

2. Interpretation-In this Act, unless the context otherwise requires,-

"Banking business" means the business of banking in all its customary branches and departments including that of a Savings Bank and without limiting the generality of the foregoing also includes,-

(a) borrowing, receiving or taking up money at interest or otherwise on current, savings account, deposit account or other account and which according and subject to arrangement is repayable on the cheque, draft, order or authority of the customer;

(b) lending, giving credit at interest or otherwise with or without security to any person, company or corporation;

(c) discounting, buying, selling and dealing in bills of exchange, promissory notes, coupons, drafts, bills of lading, warrants, debentures, certificates, script, hire purchase agreements, and other instruments and securities whether transferable or negotiable or not;

(d) granting and issuing letters of credit and circular notes;

(e) buying, selling and dealing in bullion and specie;

(f) dealing in foreign or overseas exchange;

(g) acquiring, holding, issuing on commission, debentures, debenture stock, bonds, obligations, securities and investments of all kinds;

(h) negotiating of loans and advances;

(i) becoming surety for the payment of money or performance of contracts or obligations by any person, company or corporation;

(j) receiving money and valuables on deposits or for safe custody or otherwise;

(k) collecting and transmitting money and securities;

(l) managing property and transacting all kinds of agency business commonly transacted by bankers;

(m) carrying on such other business outside the customary scope of the business of banking as the Minister may from time to time authorise or approve in writing;

"Central bank" means the Central Bank of Samoa established pursuant to the Central Bank of Samoa Act 1984;

"Company" means a body corporate with legal personality recognised for most purposes as separate from that of its members, constituted, incorporated or formed under the laws of Western Samoa or in accordance with the laws of any other country or place, including public and private corporations;

"Dollars" means a unit of the currency of the United States of America;

"Holder" means, in relation to a licence, the person to whom it was issued;

"Licence" means a licence granted pursuant to Part II of this Act;

"Licensee" means any company holding a current valid licence pursuant to the provisions to this Act;

"Minister" means the Minister of Finance;

"Non-resident" means a person not ordinarily resident in and not domiciled in Western Samoa who does not engage in a trade or business in Western Samoa, and includes any company incorporated or registered under the International Companies Act 1987 and any trustee company registered under the Trustee Company Act 1987;

"Off-Shore banking business" means any banking business conducted in any currency other than the currency of Western Samoa transacted exclusively by, for, and in respect of non-residents;

"Person" includes any body of persons corporate or unincorporate;

"this Act" includes regulations made under this Act;

"residence" means ordinary residence or usual place of abode and the words "to reside" or "resident" shall have the corresponding meanings.

PART II
Licensing of Off-Shore Banks

3. Unlicensed off-shore banking prohibited-(1) No person shall transact any off-shore banking business from within Western Samoa unless he is the holder of a valid off-shore banking licence issued under this Part.

(2) Every person commits an offence against this Act who, not being duly licensed under this Part,-

(a) Acts as an off-shore bank, whether on his own account, in partnership or otherwise;

(b) Holds himself out as being licensed or otherwise entitled to act as an off-shore bank;

(c) Takes or uses any name, title, addition, or description implying or likely to lead any person to believe that he is licensed or otherwise entitled to act as an off-shore bank; or

(d) Carries on business as an off-shore bank's agent, or in any way advertises or holds himself out as an off-shore bank's agent.

(3) In any proceedings in respect of an offence under this section, the following shall, in the absence of proof to the contrary, be sufficient evidence of the matters contained therein:

(a) A certificate signed by the Minister to the effect that at the time of the alleged offence the defendant was not the holder of a valid off-shore banking licence.

(b) A certificate signed by the Minister to the effect that the defendant was at the time of the alleged offence acting as an off-shore bank, or holding himself out in such capacity.

4. Licensee to be body corporate-Except as otherwise specially provided herein, or in any other Act, no person other than a company shall be eligible to hold a licence under this Act.

5. Licences-(1) Every person who desires to obtain a licence under this Act shall make application to the Minister in the prescribed form.

(2) The following kinds of licences may be granted under this Act, namely:

(a) 'A' class off-shore banking licences; and

(b) 'B' class off-shore banking licenses.

6. 'A' class off-shore banking licences-(1) No person shall apply for or obtain or be eligible to hold an 'A' class off-shore banking licence under this Act unless he has at all relevant times an aggregate of his capital issued and paid up in cash and unimpaired reserves of not less than 10 million dollars or an equivalent amount in a currency approved by the Minister.

(2) An 'A' class off-shore banking licence shall license the holder to,-

(a) Establish, maintain and operate an business office in Western Samoa;

(b) Recruit and employ all necessary workers on appropriate terms and conditions;

(c) Transact off-shore banking business through its business office in Western Samoa, or through a Trust Company registered under the Trustee Companies Act 1987.

(3) An 'A' class off-shore banking licence may, subject to showing an established and satisfactory banking record, and subject to the special approval by the Minister endorsed thereon, licence the holder to transact on-shore banking business subject to and in accordance with any other Act in force at that time regulating on-shore banking.

(4) A person who has contracted to enter the service in Western Samoa of the holder of an 'A' class off-shore banking licence shall be entitled to the same treatment for immigration purposes as a person who has contracted to enter the service of the Government of Western Samoa.

(5) Notwithstanding the provision of any other enactment, a worker employed by a business licensed as an 'A' class offshore bank may,-

(a) At the written request or consent of the worker be paid in whole or in part, in a currency other than the currency of Western Samoa;

(b) Be required to work on Sundays, subject to the payment of at least double the ordinary rate of wages for such Sunday work;

(c) Be required to work on any public holiday, subject to the payment of at least triple the ordinary rate of wages for such day's work or at least double the ordinary rate of wages for such day's work with entitlement to a substituted day of rest therefor;

(d) Where it is expressly provided in the workers terms and conditions of employment, be required to work overtime to the extent therein indicated;

(e) both men and women, be employed between the hours of midnight and 6 o'clock in the following morning.

(6) An 'A' class off-shore banking licence shall, subject to this Act, be valid for a period of 5 years from the date of granting and may be renewed for further periods of 5 years each.

7. 'B' class off-shore banking licences-(1) A 'B' class off-shore banking licence shall-

(a) Where he has at all relevant times an aggregate of his capital issued and paid up in cash and unimpaired reserves of not less than 2 million dollars or an equivalent amount in a currency approved by the Minister, licence the holder to,-

(i) Transact only such off-shore banking business as may be specified in the licence;

(ii) Transact such specified business only in the currency or currencies specified in the licence;

(iii) Transact such specified business through a Trust Company registered under the Trustee Company Act 1987.

(b) Where he has at all relevant times an aggregate of his capital issued and paid up in cash and unimpaired reserves of not less than 250,000 dollars or an equivalent amount in a convertible currency approved by the Minister,-

(i) Prohibit the holder from soliciting or accepting any deposits of money or any other valuable thing from the general public;

(ii) Licence the holder to accept deposits of money or any other valuable thing only from those persons specified in the licence;

(iii) Prohibit the holder from issuing to any depositor a cheque book, or providing any cheque account facilities for the transaction of his offshore banking business;

(iv) Licence the holder to transact only such off-shore banking business as may be specified in the licence;

(v) Licence the holder to transact such specified business only in the currency or currencies specified in the licence;

(vi) Licence the holder to transact such specific, business only through a trustee company registered under the Trustee, Companies Act 1987.

(2) The holder of a 'B' class off-shore banking licence under paragraph (b) of subsection (1) of this section may, at any time during the term of the licence, apply to the Minister for permission to establish, maintain and operate a business office of the licence holder in Western Samoa.

(3) In determining whether to grant permission in respect of an application made under subsection (2), the Minister shall have regard to the public interest and such other considerations as the Minister thinks fit to take into account.

(4) The Minister, on being satisfied that permission should be granted in accordance with subsection (3), may grant permission upon such terms and conditions as he thinks fit.

(5) A 'B' class off-shore banking licence shall, subject to this Act, be valid for a period of 1 year from the date of granting and may be renewed for further periods of 1 year each.

8. Application for licence-(1) Every application for a licence under this Act shall be submitted to the Central Bank, and shall be accompanied by,-

(a) A certified copy of the Act, charter, memorandum of association and articles of association of the company, or other document or documents by which the company is constituted;

(b) The prescribed fee payable to the Central Bank;

(c) Such evidence as the Minister may require-

(i) That the laws of the jurisdiction under which the company is incorporated have been complied with;

(ii) Of the nature and character of the company's business;

(iii) Of the financial standing of the company;

(iv) Of the stock ownership of the company;

(v) Of the shareholding and management of the company, and

(vi) By referees, guarantors or other third parties.

(d) Notice of an address for service within Western Samoa; and

(e) Such other information as may be required by regulation.

(2) In addition, to the documents, information, and evidence which shall accompany an application under subsection (1) of this section, an applicant shall, if required to do so by the Minister, furnish to the Central Bank such additional documents, information, or evidence as the Minister may require.

(3) Every document, certificate or other written evidence submitted by an applicant under this section may be proved in evidence thereof in any Court by the production thereof by the officer of the Central Bank in whose custody the document, certificate or thing in writing is entrusted, in the absence of evidence to the contrary.

9. Minister may grant or refuse licence-(1) Where an application for a licence is made to the Minister, he may after due consideration of that application and at his discretion and in accordance with the advice of Cabinet either grant a licence or reject the application, or defer the application and direct that such enquiries as he considers necessary be made.

(2) In making his decision under subsections (1) and (4) of this section, the Minister shall have regard to the public interest.

(3) Where the Minister grants a licence and in accordance with the advice of Cabinet he may do so subject to such terms and conditions, if any, as he thinks fit.

(4) If terms and conditions are imposed under subsection (3) the Minister may, from time to time, vary or revoke any of those terms of conditions or impose any additional terms or conditions.

(5) The Minister need not give his reasons for any decision or direction made under this section.

(6) No decision or direction made by the Minister under this section shall be reviewed or questioned in any Court by way of appeal, prerogative write or otherwise howsoever.

10. Licence fees-(1) The Head of State, acting on the advice of the Minister, may from time to time make regulations prescribing:

(a) The fee payable for an application for,-

(i) An 'A' class off-shore banking licence;

(ii) A 'B' class off-shore banking licence.

(b) The administration charges which will apply where an application for a licence is refused;

(c) The fee payable upon the grant of a licence or the annual renewal thereof.

(2) The Central Bank shall pay all money and fees received under this Act into the Public Account in accordance with such directions as the Financial Secretary may from time to time make.

(3) Where an application for a licence is refused, any application fee, less the prescribed administration charge, shall be refunded.

(4) In any case, where a prescribed annual fee has not been paid by the Licensee by the due date, the amount shall be recoverable in any Court of competent jurisdiction as a debt due to the Government.

(5) Every Licensee who makes default in paying a prescribed annual fee imposed upon him in respect of a licence under this Act by the due date commits an offence for which he is liable upon conviction to a Fine not exceeding an amount equal to treble the amount of the unpaid fee.

11. Licence renewal-(1) A licence may, not later than 6 months in the case of an 'A' class off-shore banking licence and 3 months in the case of a 'B' class off-shore banking licence prior to the expiry of his licence, apply to the Minister for a renewal of the licence.

(2) An application for a renewal of the licence shall be in the prescribed from submitted to the Central Bank and accompanied by,-

(a) The prescribed annual fee payable to the Central Bank;

(b) Particulars of any material changes or alterations in the particulars submitted pursuant to subsections 8(1)(a) and (c) and 8(2) which have taken place since the grant of the licence; and

(c) Such other additional documents, information or evidence as the Minister may require.

(3) Where an application for renewal of a licence is made pursuant to subsection (1) the Minister may, after due consideration of that application and at his discretion and in accordance with the advice of Cabinet either grant the renewal or refuse the application or defer the application and direct that such enquiries as he considers necessary be made.

(4) The provisions of subsections (4), (5) and (6) of section 9 shall apply in the case of a renewal as if it were an application for a new licence.

(5) A licensee under this Act shall have no right of renewal of his licence or any expectation recognisable or enforceable under law as to the renewal of his licence

12. Licence not transferable-(1) In this section "transfer of control" in relation to a licensee, shall include,-

(a) The sale, transfer, or other disposition whatsoever of the shares in the capital of the company, or any issue or allotment of any new shares in the capital of the company or the happening of any other matter or event whatsoever, the effect of which is to transfer directly or indirectly the effective ownership management, and control of the company; and

(b) Any of the events referred to in paragraph (a) of this subsection occurring to any holding company of the licensee or any holding company of any holding company of the licensee.

(2) A licensee shall not transfer the licence or assign, any interest therein and any such purported transfer or assignment shall be void and of no effect.

(3) A licensee shall not transfer control of the holder of the licence without prior written approval of the Minister.

13. Prohibited activities-(1) A licensee shall not,-

(a) Transact any banking business with any person who is a resident of Western Samoa other than a company incorporated or registered under the International Companies Act 1987 or a trust company registered under the Trustee Companies Act 1987;

(b) Transact any banking business in the currency of Western Samoa;

(c) Engage in any advertising or soliciting of banking business within Western Samoa;

(d) Hold a licence or use or operate under a name which-

(i) So closely resembles or is identical to the name of any company, firm, business house or other financial entity or institution whether within or outside Western Samoa as is likely to mislead or deceive;

(ii) Is calculated to suggest falsely the patronage of or connection with some person or authority whether within Western Samoa or not; or

(iii) Is calculated to suggest falsely that such licensee has a special status in relation to or derived from the Government of Western Samoa or has the official backing of or acts on behalf of the said Government or of any department or official thereof or is recognised in Western Samoa as a national or central bank;

(e) In the conduct of off-shore banking business from within Western Samoa, use a name other than the name under which he is licensed under this Act;

(f) Transact any business otherwise than in accordance with the terms and conditions of the licence and this Act.

(2) A holder of a 'B' class off-shore banking licence under the lie category established in paragraph (a) of subsection (1) of section 7 shall not,-

(a) Grant any advance or credit facility against the security of its own shares;

(b) Accept any deposit of money or any other valuable thing less than 100,000 dollars;

(c) Accept any deposit of money for a period of less than 90 days;

(d) Grant or permit to be outstanding unsecured advances or unsecured credit facilities of an aggregate amount in excess of 5,000 dollars or of one per centum of the sum of the paid up capital and unimpaired reserves of such licensee, whichever is the greater, or give any financial guarantees in excess of such amount without security or incur any other liability in excess of such amount without security-

(i) To or on behalf of any one of its directors, whether such advances, facilities, guarantees or other liabilities are obtained by or on account of such director jointly or severally;

(ii) To or on behalf of any firm, partnership or company in which it, or any one or more of its directors is interested as director, partner, manager or agent, or to or on behalf of any individual, firm, partnership or company of whom or of which any one or more of its directors is a guarantor; and for the purpose of this paragraph a director includes a wife, husband, father, mother, brother, sister, son or daughter of a director.

(3) Every person who acts in contravention of this section commits an offence and is liable on conviction to a fine not exceeding 1,000 dollars for each day during which the offence continues.

14. Business presence or representation in Western Samoa-(1) A licence shall not be granted to any company having its head office outside Western Samoa unless such company notifies and designated to the Minister,-

(a) A principal office in Western Samoa, authorised to represent the company, to accept legal service and to sue and be sued in the name of the company; or

(b) (i) by name, an official or agent of the company subject in his personal capacity to jurisdiction in Western Samoa who is to be the authorised agent of the company in Western Samoa; and

(ii) by name an officer or agent of the company subject in his personal capacity to jurisdiction in Western Samoa who, in the absence or inability to act of the officer named under paragraph (b)(i) of this subsection, to be the authorised agent of the company in Western Samoa.

(2) Every company which holds a licence and which has its head office outside Western Samoa shall forthwith notify the Minister of any change of,-

(a) Its principal office (if any) maintained in Western Samoa under this Act; or

(b) Either or both of the officers designated pursuant to subsection (1)(b)(i) or (ii).

(3) Every person who fails to comply with the provisions of subsection (2) commits an offence and is liable on conviction to a fine not exceeding 1,000 dollars for every day during which the offence continues.

15. Name to contain words "bank" or "off-shore bank"-Every licensee shall use as part of its description or title the word "bank" or one or more of its derivatives in any language.

16. Qualified workers and management-(1) No person shall apply for or obtain or be eligible to be employed as a director, manager, secretary or other worker of any licensee under this Act, without the express prior approval in writing of the Minister if,-

(a) He has been a director of, or directly concerned in the management of, a licensee which has had its licence cancelled in accordance with section 33 or has been wound up by a Court;

(b) He has been sentenced by a Court in any country to a term of imprisonment for an offence involving dishonesty and has not received a full pardon for that offence; or

(c) He is or becomes bankrupt, suspends payment to or compounds with his creditors.

(2) Every person who acts in contravention of the provisions of subsection (1) commits an offence and is liable on conviction to a fine not exceeding 5,000 dollars.

(3) Prima facie evidence of a previous conviction, for the purposes of proceedings under subsection (2) hereof, may be given,-

(a) By the production of the original judgment or conviction purporting to be signed by the judge or scaled by the Court who made or issued it without evidence of such signature having been made or of such seal having been impressed or any other evidence relating thereto;

(b) By the production of a written copy or extract of the judgement or conviction purporting to be certified by the Registrar of the Court who made or issued it without evidence of such certificate having been made or any other evidence relating thereto.

(4) Prima facie evidence of the absence of a full pardon, for the purposes of proceedings under subsection (2) hereof, may be given by a certificate by the Registrar of the Court in which the conviction or judgement was issued stipulating that no appeal is outstanding and that no pardon has been entered in the records of the Court Registry in respect of the conviction or judgement.

17. Notification of changes- (1) A licensee shall, within 3 months after the making of an alteration in the act, charter, memorandum of association, articles of association or other document by which the licensee was constituted a company, furnish to the Minister through the Central Bank particulars in writing of the alteration verified by a statutory declaration made by a senior officer of the company authorised to do so.

(2) A licensee shall forthwith notify the Minister through the Central Bank in writing; of any material change in the particulars set out in the application for issue or renewal of licence or in the documents, information, or evidence accompanying that application or in any documents, information, or evidence, if any, given under section 8 or 11 of this Act.

(3) Where a reconstruction of the licensee has occurred or where the licensee makes an arrangement or enters into an agreement for,-

(a) the sale or other disposal of its business by amalgamation or otherwise; or

(b) the purchase or other acquisition of the business of any other licensee,

such licensee, shall forthwith upon the occurrence or the said reconstruction or upon the making or entering into of the said arrangement or agreement inform the Minister through the Central Bank in writing thereof.

(4) Where any particulars or information is received under this section, the Minister having regard to the nature of such particulars or information and not withstanding the fact that the financial institution concerned is a licensee, may direct that institution in writing to apply for another licence within such time and in such form as the Minister may determine.

(5) The issue of a directive pursuant to subsection (4) shall not affect the validity of any licence subsisting at the date of such directive and granted to the financial institution to which the said directive is issued.

(6) Every licence to which subsection (5) refers shall be or full force and effect until,-

(a) It is cancelled by the Minister by order under section 33, or

(b) Another license is granted to the financial institution concerned upon an application made pursuant to a directive under subsection (4),

and thereafter the licence referred to in subsection (5) shall cease to have effect.

(7) Every person who fails to comply with any or the provisions of subsections (1), (2) or (3) or with any requirement of the Minister under subsection (4) commits an offence and is liable on conviction to a fine not exceeding 1,000 dollars for every day during which the offence continues.

PART III
Accounting Records, Business Inspections, and Audits

18. Keeping of accounting records-(1) In this section,-

"Accounting records", in relation to a company includes such working papers and other documents as are necessary to explain the methods and calculations by which accounts of the company are made up;

"Accounts" means profit and loss accounts and balance sheets, and includes notes (other than directors' reports) attached to, or intended to be read with, any of those profits and loss accounts or balance sheets.

(2) A licensee shall,-

(a) Keep such accounting records as correctly record and explain the off-shore banking transactions and financial position of the company in relation to such business;

(b) Keep its accounting records in such a manner as will enable true and fair accounts of the off-shore banking business of the company to be prepared from time to time; and

(c) Keep its off-shore banking business accounting records in such a manner as will enable the accounts of the company to be conveniently and properly audited.

19. Annual Report and Audit-(1) A licensee shall submit to the Minister through the Central Bank within 6 months of the end of its financial year audited accounts in the form prescribed by regulation.

(2) For the purposes of subsection (1) the audit shall be carried out by a competent auditor approved for the purpose by the Minister in accordance with section 24.

20. Quarterly statements and other returns-(1) Subject to subsection (3), every licensee shall in relation to its operations from within Western Samoa submit to the Minister through the Central Bank in such form as the Minister may from time to time approve, the following statements,-

(a) Not later than 21 days after the last day of the quarter to which it relates, quarterly statement of assets and liabilities and a return providing an analysis of customers' liabilities to the bank in respect of loans, advances, and other assets of the bank at the close of the last business day of that quarter;

(b) Such other returns as may be prescribed.

(2) Subject to subsection (3) the Minister may require a licensee to submit to the Central Bank such further information as may be necessary for the proper understanding of any statement or return furnished by that licensee under subsection (1) and such information shall be submitted within such period and in such manner as the Minister may require.

(3) No statement, return or information shall be required under subsection (1) or (2) as the case may be, with respect to the affairs of any particular customer of a licensee.

(4) The period within which any statement or return is required to be submitted under this section may be extended by the Minister where he considers that there are circumstances justifying an extension.

(5) Every licensee which fails to comply with any of the 'provisions of subsection (1) or subsection (2) or with any requirement of the Minister thereunder commits an offence and is liable on conviction to a fine not exceeding 1,000 dollars for every day during which the offence continues.

21. Inspection-The Central Bank shall, during the normal office hours of the licensee, have the right to inspect,-

(a) The licensee's accounting records; and

(b) The licensee's register of shares; and

(c) The licensee's record of transactions; and

(d) Any other record kept by the licensee in the course of his off-shore banking business; and

(e) The premises where the licensee carries on his off-shore banking business.

22. Supply of information-(1) A licensee shall furnish to the Minister through the Central Bank such information in respect of its off-shore banking business conducted in Western Samoa as the Minister may from time to time direct.

(2) A direction under this section shall not require information to be furnished with respect to the affairs of an individual customer.

23. Official examinations-(1) The Minister may at his .discretion from time to time appoint one or more qualified persons to make examinations under conditions of secrecy of the books and affairs of any licensee.

(2) The Minister may at any time appoint one or more qualified persons to make a special examination under conditions of secrecy of the books and affairs of any licensee,-

(a) Where he has reason to believe that such licensee may be carrying on its business in a manner detrimental to the interest of its depositors and other creditors or may have insufficient assets to cover his liabilities to the public or may be, either in Western Samoa or elsewhere, contravening any of the provisions of this Act; or

(b) If the licensee suspends payment or informs the Minister of his intention to do so.

(3) Every licensee of which an examination has been ordered under subsections (1) or (2) hereof shall produce to the person or persons appointed at such times and in such places as such person or persons may specify (being times and places which, in the opinion of such person or persons, would not be detrimental to be conduct of the normal daily business of the licensee) all books, accounts and documents in the possession or custody of such licensee or of which it is entitled to possession or custody relating to its business, and shall give, within such times as such person or persons may specify, such oral information concerning the licensee's business as may be required.

(4) As soon as may be practicable after the conclusion of an examination under this section the person or persons appointed to carry out the examination shall submit a full report on such examination to the Minister who shall forward a copy thereof to the head office of the licensee concerned.

(5) The Minister may order that all expenses of and incidental to a special examination under subsection (2) shall be paid by the licensee examined. A licensee shall not be required to pay expenses of an incidental to an examination under subsection (1).

(6) Every person commits an offence and is liable on conviction to a fine not exceeding 1,000 dollars for every day on which the offence has continued who,-

(a) Refuses or fails or neglects to produce any book, account, document or information required under subsection (3) hereof;

(b) Knowingly produces any book, account, document or information required under subsection (3) hereof which is false in any material particular.

(7) The licensee commits an offence and is liable on conviction to a fine not exceeding 5,000 dollars where any book, account, document or information produced under subsection (3) hereof is false in any material particular.

24. Annual audit-(1) Every licensee shall appoint annually an approved auditor whose duties shall be to make to the shareholders of that licensee a report upon the annual balance sheet and accounts, and in every such report the auditor shall state whether, in his opinion, the balance sheet is full and fair and properly drawn up, whether it exhibits a true and correct statement of the licensees affairs, and, in any case in which the auditor has called for explanation or information from the officers or agents of the licensee whether this is satisfactory.

(2) The report of an approved auditor under subsection (1) shall be read together with the report of the directors of the licensee at the annual meeting of shareholders and copies of that report shall be sent to the Minister, together with copies of the balance sheet and profit and loss account, and if any default is made in complying With the requirements of this subsection, the licensee concerned commits an offence and is liable on conviction to a fine not exceeding 5,000 dollars.

(3) If a licensee fails to appoint an approved auditor under subsection (1) or, at any time, fails to fill a vacancy for such auditor the Minister may appoint an approved auditor and shall fix the remuneration to be paid by that licensee to such auditor.

(4) The duties and powers conferred on examiners appointed under section 23 are hereby conferred also in relation to approved auditors.

(5) For the purposes of this section, an approved auditor is an auditor who is a member of one of the professional bodies for the time being approved for such purposes by the Minister.

(6) No person having an interest in any licensee otherwise than a depositor, and no director, officer or agent of any licensee shall be eligible for appointment as an approved auditor for that licensee; and any person appointed as such auditor to any licensee who subsequently acquires such interest or becomes a director, officer or agent of that licensee shall cease to be such auditor.

(7) Where, in the case of a licensee incorporated outside Western Samoa, the Minister is satisfied that a report upon the annual balance sheet and accounts of such licensee has been duly made by an auditor in accordance with the law of the country in which such licensee is incorporated, and a copy of such report together with the report of the directors of such licensee is sent to Minister, he may by notice in writing exempt any such licensee from the provisions of this section.

25. Use of information by Minister and Central Bank-(1) The Minister, the Central Bank and any officials or officers thereof shall not reveal any information to any person other than to an officer of the Government or public officer for the purposes of enabling him to carry out his duties as such officer and any such officer to whom such information is revealed shall similarly not reveal it to any person other than such a person as is referred to herein.

(2) Any statement or return and any information obtained by an inspection under section 21 or submitted by a licensee under section 23 shall be regarded as secret, save that the Minister may publish consolidated statement aggregating the figures in the statements or returns.

26. Breaches of professional secrecy-(1) Every person commits an offence who,-

(a) Divulges any information, in Western Samoa or elsewhere, in relation to-

(i) Any off-shore banking business in Western Samoa;

(ii) The transfer of money and property into or out of Western Samoa in the course of any off-shore banking business; or

(iii) The account of any person with a licence or any item of such an account or the fact of any person having, or having had such an account, which he has become aware of in his capacity as an officer, employee, or authorised agent of a licence, or as an officer or employee of an approved auditor; or

(b) Attempts to induce others to breach professional secrecy in relation to any such matters.

(2) An offence under subsection (1) of this section may be committed either during or after the termination of the official or employment relationship or the exercise of the profession.

(3) Notwithstanding subsection (1) of this section, it shall not be an offence under this section to divulge such information,-

(a) To the Central Bank pursuant to section 21 of this Act or if directed to do so by the Minister pursuant to section 22 of this Act;

(b) To the person on whose behalf the off-shore banking business is being carried out;

(c) In Western Samoa to an officer or employee of the same licensee in the performance of his duties as an officer or employee;

(d) To an officer or employee of a bank or other such financial institution outside Western Samoa, if all the persons concerned in the banking business or in whose name the account stands, consent in writing to his doing so;

(e) To an officer or employee of the licensee outside Western Samoa, so long as the names of the persons concerned in the banking business and any information which might identify them and the names in which accounts stand and the balance therein, are not divulged; or

(f) With the prior written approval of the Minister, to the Government of or to a public officer of any other country, provided such information is used only as part of-

(i) an amount representing the total assets of the licensee in Western Samoa; or

(ii) An amount representing the total sum of money transferred to Western Samoa from that country or from Western Samoa to that country and the currencies in which such money was transferred-

and the amounts of individual banking transactions, the names in which accounts stand, and the balances therein are not divulged.

(4) For the purposes of subsection (3)(b) of this section, all the persons concerned in off-shore banking business and in whose names accounts stand shall be deemed to have consented to an officer or employee of a licensee divulging to an officer or employee of a bank or other such financial institution outside Western Samoa such information of the off-shore banking business being carried out as is essential to the carrying out of that banking business, but the consent deemed to be given pursuant to this subsection shall not apply to any other particulars.

(5) Nothing in this section shall prevent the Supreme Court from requiring any person to give evidence or produce documents in any proceedings in the Court of any facts relevant in those proceedings which the person could otherwise be required to give or produce.

(6) Every person who commits an offence under this section shall be liable upon conviction to imprisonment for a term not exceeding 5 years, or to a finer of 50,000 dollars or both.

27. Breach of secrecy by officer or employee deemed to be breach by licensee-(1) For the purposes of section 26 of this Act, an offence by an officer or employee of a licensee or of an auditing company, as the case may be, or by a person after termination of his employment as an officer or employee of a licensee or of an auditing company, as the case may be, whether such offence occurs in Western Samoa or elsewhere, shall be deemed also to be an offence by that licensee or by that auditing company.

(2) Notwithstanding subsection (1) of this section an offence under section 36 of this Act by a person after termination of the official or employment relationship or the exercise of the profession with a licensee or an auditing company shall not be deemed also to be an offence by the licensee or by the auditing company, as the case may be, can prove, on the balance of probabilities, that it has taken all reasonable steps to prevent an offence by the person.

PART IV
Taxation

28. Profits and dividends-Notwithstanding anything contained in any other enactment,-

(a) No income tax, nor any other direct or indirect tax or impost, shall be levied in Western Samoa upon the profits or gains of a licensee, or upon any interest earned by a licensee, or paid to a depositor by a licensee, in respect of the off-shore banking business it does from within Western Samoa.

(b) No income tax, nor any other direct or indirect tax or impost, shall be levied in Western Samoa in respect of any dividends or earnings, or upon any interest earned by a licensee or paid to a depositor. by a licensee, attributable to the shares or securities of a licensee that are beneficially owned by another licensee or by a person who is not a resident of Western Samoa.

29. Exemption from stamp duty-(1) Bills of exchange and promissory notes payable on demand and any other document, instrument or certificate executed by for or in connection with an off-shore banking business licensed under this Act and relating to off-shore banking business shall be exempt from stamp duty.

(2) Every instrument chargeable with duty executed by or for a licensee, and not exempt under the provisions of subsection (1), may be presented for stamping within an extended period of 4 months after and exclusive of the day of execution thereof (or in the case of an instrument executed out of Western Samoa, within 4 months after it has first been received in Western Samoa) without penalty.

30. Exemption from currency and exchange control-(1) Off-shore banking business conducted by and in accordance with a licence under this Act shall be exempt from any currency and exchange control restrictions or regulations.

(2) No foreign exchange levy shall be imposed or be payable in respect of off-shore banking business conducted by and in accordance with a licence under this Act.

PART V
Suspension, Cancellation and other Enforcement of Licence Conditions

31. Suspension of licence-(1) A licence may be suspended by the Minister for such period as the Minister deems fit where a licensee,-

(a) Fails to notify the Minister pursuance to section. 17 of this Act;

(b) Fails to maintain accounting records in accordance with section 18 of this Act;

(c) Fails to submit annual audited accounts in accordance with section 19 of this Act or quarterly reports pursuant to section 20 of this Act;

(d) Fails to supply information pursuant to section 22 of this Act; or

(e) Fails to comply with any directive issued by the Minister under this Act.

(2) Where the Minister intends to suspend a licence under subsection (1) of this section, he shall give the licensee notice of his intention and a reasonable opportunity to show cause why the licence should not be suspended.

(3) Where a licence is suspended under this section the licensee shall return that licence to the Minister forthwith.

(4) The Minister shall give notice in writing to the licensee and through such means as he deems fit to creditors, depositors, directors, shareholders, employees of the licensee and relevant banking authorities elsewhere of the suspension of the licence.

32. Enforcement of examination findings-(1) If, the opinion of the Minister and examination under section 23 shows that the licensee concerned is carrying on its business in a manner detrimental to the interests of its depositors and other creditors, or has insufficient assets to cover its liabilities to the public, or is, either in Western Samoa or elsewhere, contravening any of the provisions of this Act, the Minister may take such one or more of the following steps from time to time as may seem to him necessary,-

(a) Require the licensee forthwith to take such measures as he may consider necessary in relation to its business;

(b) Appoint a person who, in his opinion, has had adequate training and experience to advise the licensee in the proper conduct of its business and fix the remuneration to be paid by the licensee to such person; or

(c) Unless he is satisfied that the financial institution is taking adequate measures to put its affairs in order, make an Order under section 33 cancelling the licence.

(2) If a licensee refuses or fails to take any measure required by the Minister under paragraph (a) of subsection (1) hereof, it commits an offence and is liable on conviction to a fine not exceeding 500 dollars in respect of every day during which the offence continues.

(3) Every person who knowingly refuses or fails to take any measure required by the Minister under paragraph (a) of subsection (1) hereof, commits an offence and is liable on conviction to a fine not exceeding 1,000 dollars.

33. Licence may be cancelled-(1) The Minister may cancel a licence if the licensee,

(a) Does not within 6 months after the issuance of his licence commence off-shore banking business;

(b) Fails to comply with the terms and conditions of his licence;

(c) Fails to comply with any directive issued by the Minister under this Act;

(d) Is in breach of any duty or obligation imposed upon him by this Act or commits an offence under this Act;

(e) Ceases to carry on off-shore banking business under his licence;

(f) If in the opinion of the Minister the licensee concerned is carrying on off-shore banking business in a manner detrimental to the public interest, or to the interest of the depositors of the financial institution constituting the licensee; or

(g) If the licensee goes into liquidation or is wound up or otherwise dissolved.

(2) When the Minister intends to cancel a licence under subsection (1) of this section he shall give the licensee notice of his intention and a reasonable opportunity to show cause why the licence should not be cancelled.

(3) The Minister shall give notice in the manner and to the parties referred to in section 31(4) of the cancellation of the licence.

34. Appeal against suspension enforcement action or cancellation-(1) Any person affected adversely or any body or person representing some relevant aspect of the public interest may, within 1 month after the date of the decision appealed from, to the Supreme Court, from;-

(a) Any decision to suspend a licence under section 31(1);

(b) Any decision by the Minister to enforce examination Findings Under section 32(1); and

(e) Any decision to cancel a licence under section 33(1).

(2) In determining an appeal under this section, the Court shall regard to,-

(a) Whether or not the decision is expedient for the protection of the public or any identifiable body or group of the public;

(b) Any report that may be made by the Central Bank;

(c) Whether or not the decision is appropriate in relation to the licensee's act or omission, the purpose of the regulation or requirement, and the character and personal history of the management and employees of the licensee;

(d) Whether or not any act or omission by the licensee occasioned damage to any other person and the extent to which there has been any restitution;

(e) The means of the licensee so far as appear they or are known to the Court; and

(f) Any other relevant matter.

(3) In determining any appeal under this section the Court may, if it thinks fit,-

(a) Exercise any of the powers conferred on the Minister by this Part;

(b) Order any party to pay to any other party such costs and expenses (including expenses of witnesses) as it considers reasonable, and may apportion any such costs between the parties or any of them in such manner as it thinks fit;

(c) Cancel or amend any decision to which the appeal relates;

(d) Confirm any such decision.

(4) The decision of the Court on appeal proceeding brought before it under this section shall be final and conclusive.

PART VI
Miscellaneous

35. Protection of the terms "bank" and "off-shore bank" -(1) Except with the approval of the Minister in writing, no person, other than the holder of a valid off-shore banking licence issued under this Act, shall-

(a) Use the word "bank" or "off-shore bank" or any of its derivatives in any language in the description or title under which such person is carrying on business from within Western Samoa; or

(b) Make or continue to make any representation in any billhead, printed form, letter, paper, notice, advertisement or in any other manner whatsoever that such person is carrying on offshore banking business from within Western Samoa.

(2) Every person who contravenes this section commits an offence against this Act.

(3) In this section the term "printed form" includes a form of which copies are produced by cyclostyling, or by any duplicating or reproduction process, whether letterpress, photographic, lithographic multigraphic, or stencilling, or any other similar process.

36. General penalty for office-Every person who commits an offence against this and any regulations issued hereunder for which no penalty is provided otherwise than in this section is liable upon conviction to imprisonment for a term not exceeding 1 year or to a fine not exceeding 10,000 dollars or to both, and, of the offence is a continuing one, to a further fine not exceeding 500 dollars for every day on which the offence has continued.

37. Application of International Companies Act to winding up-(1) The provisions of Part IX of the International Companies Act 1987 shall, so far as they are applicable and with the necessary modifications, apply with respect to the winding up of companies licensed under this Act.

(2) The Supreme Court shall have jurisdiction in every such winding up.

38. Civil remedies not affected-Nothing in this Act shall affect any civil remedy that any person may have against a licensee in respect of any matter.

39. Off-shore banking not an authorised trustee investment-A deposit of lodgement of any kind or any other form of security arrangement with an off-shore bank licensed under this Act shall not constitute an authorised investment for co-operative societies, credit unions, industrial and provident societies, and trustees other than a trustee licensed under the Trustee Companies Act 1987 (except where otherwise expressly authorised under the trust settlement or by other Act).

40. No other business licence required-Except as provided by this Act, no other business licence shall be required to operate as an off-shore bank in Western Samoa.

41. Choice of measures-A holder of a valid licence under this Act may conduct his off-shore banking business (including his books and accounts relating thereto) in accordance with his licence without restriction as to the measurement system to be adopted or as to decimalisation.

42. Risk management- Notwithstanding the provisions of any other enactment, the holder of a licence under this Act may carry out off-shore banking business without restriction by gaming laws or other laws applicable to specific risk management or risk taking arrangements.

43. General Central Bank controls-(1) The Central Bank shall not, otherwise than is expressly provided under this Act or Under the terms and conditions of any licence under this Act,-

(a) Require licensee to keep certain specified reserve ratio against deposits and other similar liabilities incurred or assumed by the licensee in his off-shore banking operations;

(b) Specify or regulate interest and credit arrangements under off-shore banking operations carried out by the holder of a valid licence under this Act;

(c) Make any determination fixing-

(i) The maximum amount of the working balances which licensees may hold in foreign currency generally or in any specified currency; and

(ii) The maximum amount of indebtedness in foreign currencies generally or in any specified currency which licensees may incur;

(d) Require licensees to supply any information regarding the licensee's off-shore banking business or that of any related company in Western Samoa or elsewhere, otherwise than under and for the purposes of this Act.

(2) The Central Bank of Samoa Act 1984 is hereby consequently amended and modified in accordance with this section.

44. Regulations-(1) The Head of state, acting on the advice of Cabinet, may from time to time make regulations for all or any of the following purposes,-

(a) Prescribing forms to be used for the purposes of this Act, and the matters to be specified in such forms,

(b) Prescribing forms of applications and other notices under this Act;

(c) Providing for such matters as are contemplated by necessary for giving full effect to the provisions of this Act and for its due administration;

(d) Prescribing banking hours for the conduct of off-shore banking business;

(e) Empowering, within a period not exceeding 2 years from the date of commencement of this Act, Western Samoa resident businesses to employ non-citizens and non-residents required to provide efficient services to the holders of licences under this Act, subject to and on the following conditions-

(i) Any person employed under such regulations shall be entitled to the same treatment for immigration purposes as a person who has contracted to enter the service of the Government of Western Samoa;

(ii) Any person employed as a barrister or solicitor must obtain a practising certificate under the Law Practitioners Act 1976;

(iii) Any person employed as a public accountant must obtain a practising certificate under the Public Accountants Act 1984.

45. Consequential amendments-The enactments specified in the Schedule to this act are hereby amended or modified in the manner indicated in that Schedule.

SCHEDULE

Section 45: ENACTMENTS AMENDED

----------------------------------------------------------------------------