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NEWS p6Ministers to decide 50% economic growth strategy

ECONOMY p10Challenges loom to bring pressure on growth target

BUSINESS p12What’s Your Target?

TAXATION p14Removal from ‘black lists’ will see DTAs in 2013

FUNDS p16Investment Managers: Regulatory Overload - AIFMD

BANKING p20State-run bank counting on expansion

EMPLOYMENT p22More new businesses with EU help to reduceunemployment

TOURISM p26Round the world bid to boost visitors

BUSINESS ROUND UP p28

GOVERMENT CHANGES p30Promises to bring power and right to know

Feb/March/April 2013 Volume 19/ Number 1

Published by GibraltarInternational Publications Ltd.G7 Cornwall's CentrePMB 104PO Box 561Gibraltar

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Contents

No part of this publication may bereproduced without the writtenpermission of the publishers. The publishers have tried toensure that all information isaccurate, but emphasise that theycannot accept responsibility forany errors or omissions. Thepublishers accept no responsibilityfor statements made bycontributors or for any claimmade in an advertisement.

© 2013 Gibraltar InternationalPublications Ltd.

GIBRALTAR INTERNATIONAL MAGAZINE

4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

Seek and you shallfind – hopefully!

EDITORIAL COMMENT

Where is demand for Gibraltar’s offering going tocome from? That’s the big question for 2013 as theLabour-Liberal Alliance moves into the second of itsfour-year term of office.

The priority is identifying markets to target, withMinisters Bossano (Employment & Inward Investment) andLicudi (Financial Services & e-Gaming) keen to map out thestrategy that will help deliver the government's pre-electionpromise of 50 per cent growth in the economy by 2015.

Bossano was the architect of that challenging 10.5 percent average year-on-year growth in Gross Domestic Product(GDP) - the national income from corporate profits, self-employed, employees and rent. He’s an economist withform at making fairly accurate Gibraltar growth predictions;on the night before the 2007 elections, former Chief Minister,Peter Caruana allegedly described Bossano as “a back of theenvelope economist”.

Yet Bossano admits to having no real idea yet wherebusiness will come from. Apart from inflation and what hecalls ‘organic’ growth, he sees half of the GDP improvementcoming via inward investment, particularly from BRICcountries (Brazil, Russia, India and China) – another of hismanifesto inputs. Licudi from personal experience has addedSouth Africa, to make it BRICS, and his new super sales teamfor insurance, funds and private client (investment) work hasquickly to identify market opportunities worldwide.

That will include the UK, from where most new businessalready originates, on the grounds that you can never tellpeople too often just how good an opportunity Gibraltarpresents. But other EU countries are likely to be identified,Switzerland and even Luxembourg, where one of Gibraltar’smost prominent lawyers was called pre-Christmas to advise onthe proposed transfer of some very large funds!

Government spending adds to GDP in the sense that ittaxes the extra wages and profits earned, but it must berevenue generating, not cost investment, such as the new airterminal originated by the previous government. (In additionto an annual £3m running expense, there’s understood to be£4m cost of servicing the loan to build the £80m terminal, thattheoretically could handle 2m passengers a year - but the sea-locked airstrip cannot.)

Tourism has been suggested as the one certainty of theterritory’s economy – they can’t take The Rock’s appeal away.Or can they? Continued political and actual skirmishes bySpain in the battle to break Britain’s 300 years hold of TheRock, have at times severely affected frontier crossings andBritish Gibraltar Territorial Waters, and now threatens the2007 Cordoba Agreement which allows flights approachingGibraltar to fly over Spain.

All very frustrating and probably borne as much out ofjealousy at Gibraltar’s obvious and growing economic success(compared to the neighbouring Campo’s comparative povertyand Spain’s economic woe), as it is of any claim to ‘rightful’ownership.

Continuing media and parliamentary coverage of theseevents may cause some potential investors to hesitate, but thatwould just be a waste of the opportunity to have a foothold ina mainstream, compliant EU jurisdiction – no matter whatSpain says.

Ray Spencer

By Ray Spencer

Gibraltar is depending oninward investment tomeet at least half of the

promised 50 per cent growth inits economy to reach £1.65bn in2015 by staying “one stepahead”.

“Organic growth” – natu-ral expansion of existing busi-nesses, plus the effect of inflation – will provide the balance, according to JoeBossano, veteran politician anda former Chief Minister. Hisbackground in economicsencouraged him to add theambitious 10.5 per cent year-on-year compound growthGross Domestic Product (GDP)commitment to the govern-ment’s Election Manifesto.

Changing priorityAs Minister responsible bothfor Employment and new business from overseas, his firstyear has been focused on theformer, but from this year hispriorities change.

By the end of the first quar-ter of this year, the governmenthopes to be able to say exactlywhere and what it will target tohelp obtain the planned eco-nomic success.

“I can’t say where it is com-ing from, because we have notidentified who the professionalcustomers are, but I can tell youthat there is no doubt in mymind that we can achieve it andit will be the inward investorthat will produce more thanhalf of the growth”, he told mein mid-December.

“The economy, even with-out inward investment, cangrow: I am confident that it willgrow the other 50 per cent”, hesaid.

Emphasising his commit-ment, Bossano declared: “Ithink I am the only guy inGibraltar that actually putsdown in black and white whatthe targets are. It’s easy to say‘if we are elected we will createeconomic growth’, but youmake a rod for your own backif you spell out by how much!”

Gilbert Licudi is Ministerfor financial services, account-ing for an estimated fifth ofGDP and 14 per cent of totalemployment. While he envis-ages it “growing in proportionto the GDP growth”, Licudiemphasises: “It is not a mathe-matical or scientific calculation– what we are saying is that wehave a target in relation to overall growth and a marketstrategy, because we see areas ofpotential growth and thereforeareas we can develop within thefinance centre, both in existingbusiness and new areas (whichwe have already started to tar-get).”

Funds ambitionChanged regulations last yearremoved the need for funds tohave Gibraltar administrators inan area Licudi sees has “poten-tial for significant growth – weare ambitious in the area offunds; it is clearly not going tohappen overnight, but it is nec-essary to have the logisticframework in place, which wehave now”.

Many funds outside ofEurope – some in the Caribbean– were looking at the possibilityof having a European base withthe EU Alternative InvestmentFunds Directive (AIFD) cominginto force this year. It was veryclear to Licudi, from a Monacofunds-specific event, that fundmanagers were considering

“setting up parallel structures in Europe, not necessarily re-domiciling the existing struc-ture; the other [possibility] iswhere the fund is held under acompany, it simply re-domiciledto a new base in Europe such asGibraltar, so the whole company and fund comes toGibraltar.”

Although “we certainlydidn’t come away with a num-ber of cheques for funds inGibraltar”, the main outcomesaid Licudi, was “the creationof awareness, so Gibraltar is onthe radar.

Enticing decisionmakers“So when decision makers aredeciding where to go – particu-larly in Europe where tradition-ally funds have been located inplaces such as Luxembourg,Dublin and Malta – we are atleast on the paper of possiblelocations, and to be aware ofwhat advantages Gibraltar canbring to entice those decisionmakers.”

He’s drafting in three sen-ior executives, who “are prima-rily going to be engaged on

strategic analysis and develop-ment of policy in various areas, in particular on funds, insurance and private clients,and developing a marketingapproach.” Michael Ashtonjoined in January with 15 yearsinsurance sector experience andPaul Astengo, a Gibraltarianworking over 30 years in bank-ing, arrives in mid- February topromote private client work.The funds specialist is still to beannounced.

“The idea is to develop astrategy with them; we haven’tsaid you need to come in to doXYZ and this is your target. Ithas to be a joint strategy anddetermined fairly early on,” heasserted. “We are developing aplan, which will include eventsin relation to countries that wewant to specifically target; Ihave asked for a strategicapproach to be developed for2013 – early in [2013].”

Now it’s BRICSThe government has alreadysaid that fast-developing BRICcountries – Brazil, Russia, Indiaand China – will be targeted.Licudi has added South Africa,which following a visit to sign aTax Information ExchangeAgreement (TIEA) he felt“clearly is growing, vibrant,with numerous opportunities,and on the same time zone as Gibraltar (CET). HavingGibraltar as a base for SouthAfrica business for Europe is anideal location.”

The BRIC approach wasanother Bossano idea and“came from my input before theelection in reading what peoplewere saying, and analysing thedirection that the world was

NEWS


Ministers to decide 50%economic growth strategy

Continued page 8

Inward investment Minister JoeBossano set the GDP target andidentified the BRIC opportunity

going.” He perceived a shift inthe sources of wealth andBossano, who has had 40 years in politics, concluded:“Consequently, we needed to belooking for a customer baseoutside of our traditional areasso we could be one step ahead.”

Last year, as a result of invi-tations rather than specificallyseeking out opportunities, hevisited the former Russian stateof Azerbaijan and hosted areception for business peoplelooking at the EU as a potentialmarket. “It’s resulted in con-tacts that I have to go back to.The first trip that establishes acontact never produces any-thing other than an expressionof interest,” he noted.

India best prospectIn China in 2012, he presentedat a global economic summit,and found an opportunity tomeet participants; at a followingRio global economic sympo-sium on inward investment,Bossano met business leadersand academics.

In his view, India presents the best early opportu-nity for Gibraltar. After aCommonwealth Ministers con-ference in Delhi, he concluded:“Having been part of the BritishEmpire, as it were, the people inIndia can understand the busi-ness community and under-stand the way business works,something they are familiarwith from dealing with theUK.”

Bossano considered “sell-ing the jurisdiction to Indianbusinessmen and entrepreneursis an easier task… whereaswhen talking to the Chinese, orpeople from Azerbaijan, Braziland from Russia, they are peo-ple from a completely differentstructure and [ours] is not onethey are familiar with.”Like Licudi, Minister Bossanodeclared: “We are not lookingfor a given sector, effectively we

are putting our stall out andmaking people aware. I organ-ized a reception in Delhi andhad 80 businessmen turn up at24 hours notice, and some had come in deliberately fromMumbai overnight.” Somealready had business relation-ships with the UK, while otherswere interested in the possibili-ties of using Gibraltar as a placefor a home and for wealth planning.

However, 2013 sees a new phase in promotion ofGibraltar, with Russia being hisearly target.

“In the absence of anyother factor, I have to bringinward investment that will cre-ate jobs”, he said (see also storyPage 20). Bossano admitted:“There is a time lag betweengoing to get investment and itactually taking place – theremay be 18 months before start-ing the process - and in themeantime, the number requir-ing jobs is still growing.”

The new Labour / LiberalAlliance government said itwould establish a EconomicAdvisory Council to assist ChiefMinister Fabian Picardo and“to include people from differ-ent shades of political opinionto work with Government indeveloping Gibraltar.”

When asked about progress,a government spokesman toldme vaguely: “A Business Councilis already in place, but it is confined to commercial affairs,eg. Chamber, GFSB, etc.” Noinformation was forthcomingabout when meetings had takenplace, nor of outcomes.

However, the spokesmansaid progress had been made ona commitment to tax breaks forbusinesses using Gibraltar as ajurisdiction for research anddevelopment in the software /IT industries, which are nowestablished in Gibraltar, as wellas production by television, cinema and the music industry.“There are already discussionsin progress with interested par-

ties, but this is commerciallysensitive,” the spokespersonrevealed.

In a new year TV broad-cast, the Chief Minister admits:“Although Gibraltar is in a relative state of calm in thefinancial storms that ragearound the world, we are notimmune.”

The economic crisis,Picardo said, was starkly evi-dent across the frontier – highunemployment, and people losing their homes - in commu-nities such as La Linea andacross the region, “which areclosely intertwined with ours inmany ways.” He added: “Thedisastrous state of the Spanisheconomy therefore impacts onour business here and on someof our families too.”

Tax concernsIn June’s budget he warned thatthe better than expected rev-enue in 2011-12 from corpora-tion tax may not be sustainableand business tax in the currentyear is expected to fall.

Gibraltar’s 10 per cent corporation tax is less than halfthe UK’s present 23 per cent.Asked whether the move by UKand other EU nations to crackdown on “tax tourism” byinternational companies thatpay little or no tax when basedoutside of their area of principle sales, Licudi conceded:“Gibraltar offers financial serv-ices; I am sure there are manycompanies in Gibraltar that are

based here.”And he noted: “There is

clearly a drive in some countries– unfortunately driven by theeconomic crisis – where thereseems to be a need to stamp outwhat they might call taxdodgers, but there is a funda-mental difference between whatis considered a criminal offenceof tax evasion or fraud, andwhat is perfectly legitimate taxplanning, which might involve alower tax in one jurisdictionand higher taxes in another.”

A barrister, Licudi saidfinancial planning inevitablymeant “lots of people set up structures in Dublin,Luxembourg, Jersey, Guernsey,so Gibraltar is not unique.” Headded: “Gibraltar providesfinancial services and peoplecome here because it is anattractive jurisdiction.”

Change inevitableAsked about the tough targetof 50 per cent growth for the economy over four years, Licudi was sanguine.However, he pointed out:“We cannot be complacentand say we have establishedour model - we know thesorts of companies we wantto attract - we have to contin-ually re-invent ourselves.”

“Things evolve, thingsmove on, we have to continual-ly adapt to a changing world.We now have the ethic of Tax Exchange Information we didn’t have 4 years ago!”

NEWS


Continued from page 6

Paul Astengo (left) and Mike Ashton join the Finance Centre to promoteinternationally private client work and insurance respectively.

Afifth of Gibraltar’s Gross DomesticProduct (GDP) comes from its Port,combining a growing cruise ship

business and substantial bunkering – suchthat it is known as ‘a giant fuel fillingstation’ for ships – but now requiring“serious infrastructure investment” topermit expansion, according to Minister forthe Port, Neil Costa.

In an interview for a Guardian newspaper report on Gibraltar in lateDecember, Costa made clear: “If we are serious about radically increasing the num-ber of [cruise line] passengers that cometo Gibraltar, we need to change the infrastructural mechanisms thatwill allow a doubling of thatpassenger number.”

There is growing compe-tition too from neighbouringLa Linea and Algeciras Port,where new and expanded facilitiesare planned, and from the immanent opening of Tangier’s new port across the Strait of Gibraltar attracting liners with a similar ‘duty free’ offering and greater bunkeringcapacity.

Costa was upbeat on the 20 per cent or£240m annual contribution to the economyfrom tourism – such as hotels, land, sea andair visitors – which also is his responsibility.“My aim is to convert tourism intoGibraltar’s principal engine of economicgrowth”, he said.

Although the government was commit-ted to generate growth in the “critical” areaof financial services, he insisted: “Ultimately,the only asset that Gibraltar can always relyon is the Rock of Gibraltar and the inherentand magnificent opportunities in tourism”.And private sector money is needed theretoo, he conceded.

The fast-expanded remote gaming sector, accounting for more than 20 per centof GDP, is under threat from a planned UKtax from 2014 that could have “serious

consequences” for Gibraltar’s e-gaming sector, says Minister Gilbert Licudi, withreduced government income from duty, corporation tax, fewer employed andreduced social security payments inprospect.

Apparently not talking up the danger asa negotiating political ploy to oppose the UKplan, Licudi says he’s seen figures for each ofthe 26 licenced e-gaming companies on theextent of exposure to the UK – but theyremain confidential.

Attracting more gaming companies isnot the answer. “We have to be selective andcautious. We have built up over 15 years avery significant element of quality – notquantity – of major players. It’s not aboutnumbers.

“Malta has taken a different route withhundreds of licences – it is not a model wewant to emulate,” he emphasised.

Licudi explained: “I don’t foresee gaming having a bigger share of the economy. We have to be careful that wehave prudent economic management. Nomatter how popular or easy it might be toattract players in a particular sector, wedon’t want most of our eggs in one basket,because things change over time.”

Charged with attracting inward investment, Minister Joe Bassano says “itsquite obvious that one of the selling points isthat Gibraltar is an entry point”.Investment in Europort, the territory’s

largest group of offices, signified entry toEurope - promoting Gibraltar, not as inwardinvestment in order to access the market ofGibraltar, but in order to access Europefrom Gibraltar”.

The Rock can succeed, “because wehave got the EU next to us and that poten-tial has not been exploited. The development of Gibraltar has not beenbecause there has been a deliberate, targetedpolicy of growing the economy, it’s hap-pened by default,” Bossano said.

Listing advantages, he suggested: “Theunique situation for Gibraltar is first, wehave got all of the powers of a EU memberState in a town of 30,000 people – there isno other part of the EU that has that.Second, we have conditions of membership,which are unobtainable by anybody else

(and would not have been available tous if the border had been open and

Spain a member).”Gibraltar’s then isola-

tion, having to bring every-thing in by air and sea,enabled negotiated exceptions

from a raft of EU requirementsthat were market orientated. “That

cannot be changed without UKagreement since 1972. Theunique situation is the one that

makes possible the growth. I would not beable to sell, if Gibraltar did not have the situation [EU access]”, Bossano noted.

Being small also has advantages. Abusiness person arriving on a tighttimescale, could not get a meeting in the UK with a top decision-makersuch as David Cameron, unless offering10,000 jobs, but in Gibraltar Bossanodeclared: “If you come to offer 10 jobs,I can make that meeting happen with theChief Minister.

“We have to sell a reality – you can dofrom Gibraltar what you can do from otherplaces, but you can do it here more efficiently, quicker and you can make moremoney. The only way you can get people toinvest money is if you can persuade themthat the jurisdiction you are offering is goingto be more profitable for them,” Bossanoboasted.

Ray spencer

ECONOMY

Challenges loom to bring pressure on growth target


Fresh challenges are emerging that weren’t anticipatedwhen Gibraltar’s ambitious 50% growth target was setin late 2011. They will test the government’s resolve toattract more private investment

Construction8%

Other 10%Tourism 20%

Financial Services 20%

The Port 20%

e-Gaming 22%

Gross Domestic Product estimated sector contribution

BUSINESS

What’s Your Target?


Over the last few years, the processesfor mergers and acquisitions(M&As) have become more

complex and require a disciplinedapproach as credit markets have tightened.Done well, target screening can improvethe odds of a successful transaction.

A well-defined process can also greatlyincrease the efficiency of a company’sM&A strategy, as many potential valuekillers are identified much beforesignificant organisational resources aredeployed to unproductive deals ortransactions.

Know your target- knowthe red flags and pitfallsTarget screening is the systemic first levelreview of potential acquisition candidatesto identify a refined list of companies forfurther due diligence and consideration.

For companies seeking to acquireother companies, there’s a large list ofpotential targets ranging from standalonecompanies to subsidiaries to divisions ofother companies or even carved out entities.

A disciplined target screening processcan create a focused list of targets whichare more likely to meet the needs of the acquirer.

Red flags - avoidingcommon pitfallsAs part of target screening and the initialevaluation process, many of our clients findit is important to give due consideration atan early stage to a few key factors that canundermine the potential value of a target orits strategic fit. Some examples include:lLook for financial and operational red flags.Is one customer driving significant revenue? If so, what is their creditworthi-ness? Are there any key suppliers or components that could be at risk? Is this anindustry where a transaction may causeemployees or customers to leave immedi-ately after announcement? While not all ofthese can be identified at an early stage,early identification can eliminate a target asa potential candidate.

lKnow the tax considerations.Analysing some tax consid-erations up front alsoallows you to introduce keystructuring decisions earlyon in the process.lUnderstand the capital requirements for the transaction.Beyond the initial purchase price, will thetarget require a significant cash infusion forworking capital and growth? If significantcapital is required is it financeable in a tightcredit market?

If you as the buyer are already carryingsignificant debt, how much cash reservesdo you need to keep to service that debt?What impact will this transaction have oncertain key credit covenants?l Think about liabilities that may not beon the books. Is there a major contingent liability lurkingbehind the scenes that could be a dealkiller?

A quick search of potential litigationor environmental claims may save signifi-cant time down the road if there is an issuenot disclosed in financial statements. lConsider deal risks holistically.What do you know about the individualswith whom you are negotiating?

High level background checks or

negative article and other internetsearches on the company andselected management could easilyflush out key risks or concernsabout a company’s or manage-ment’s background and reputation. lBeware of window dressing. In preparation for a sale manycompanies put their best foot forward. In some cases, adjust-

ments are made to paint the rosiest possiblepicture to the buyer universe. Cuttingthrough short-term increases in sales, profit or cash flow to understand if they aredriven by operational improvements orwindow dressing is key.

Benefits of screeningThe rewards of a well-executed targetscreening process can be invaluable. Ifscreening is done properly, CFOs and dealteams will be more focused, aware of viablealternatives, confident as to the benefitsand risks, and better equipped to respondto competitive M&A situations. Similarly,a good screening process can provide the board with a thorough acquisition storyconsistent with the company’s strategy.

Finally, a good process provides adeeper understanding of potential integra-tion pitfalls which can help maximize the probability of integration success. If not, companies may miss important considerations that can increase the poten-tial for integration failure.

By Eran Shay, Head of Financial AdvisoryServices, Deloitte Limited

Illustrative Screening Criteria

ProfitMarginRevenueCapacityMarket

Share

Client Base TechnologyGeographicCoverage

Availabilityfor M&A/Partnership

Medium List

ShortList

Double Taxation Agreements(DTAs) with several countries areexpected to be in place this year,

something the Gibraltar Finance Centrecommunity has long advocated toremoving perceived barriers to gaining newbusiness.

The DTAs complement TaxInformation Exchange Agreements (TIEAs)that the OECD Global Forum has promoted to eliminate “harmful tax practices” through developing practical taxco-operation between jurisdictions.Gibraltar has signed 23 TIEAs, so far andsays it is open to conclude still more.

The present Gibraltar government inits first year in office established an industry-led working group to explore the possibilities; now going into the second ofits four-year term, the Minister forFinancial Services, Gilbert Licudi revealed:“We have made an initial approach to anumber of countries, including the UK.”

He told me: “We are convinced thatDTAs would be useful; they are useful generally in [financial] planning - Malta,Jersey, Guernsey, for example, all have anumber of them.”

No reason why notBusiness areas that could benefit includebanking, insurance, pensions and privateclient work. “There is no reason in principle why we shouldn’t have them[DTAs] - no impediment - and it’s some-thing we need to explore,” Licudi said.

However, smaller jurisdictions can findit difficult to secure DTAs, because frequently they stand to benefit to a greaterextent than large countries. Despite any potential “imbalance”, Licudi takes comfort from the fact that “there is in anyevent, a greater drive for co-operation intax matters and that includes TIEAs, so thisis part of the co-operative process.”

He is also confident of makingprogress with some countries that haveGibraltar on an unofficial “black list” oftax havens, in particular Portugal and Italy.“We have TIEAs with both and they havepromised that we will be removed – but wewill have to wait and see,” he declared.

Spain, (for obvious wider political

reasons), is unlikely in the short term toremove The Rock from its ‘black list’;France, is also thought to operate such asecond-tier approval process that affectsGibraltar. But a practical change in attitudetowards Gibraltar and tax has been a longtime coming.

“Portugal has Gibraltar on an unoffi-cial black list DTA, most certainly,”Minister Licudi admitted to me in an exclusive interview. Gibraltar had beenencouraged when the Portuguese TIEA wassigned in 2009. “We were expressly toldthis was something that would be sortedout in terms of so called ‘tax haven’. It isunfortunate that it hasn’t been resolved yet,even though there has been co-operation,as with any other country with which wesign a TIEA,” Licudi stated.

He expressed concern to Portugal’sAmbassador in London early in December.“Our message was very clear. We werepromised that this would happen and ithasn’t happened yet – it needs to happenand there isn’t any reason why it shouldn’thappen.” Licudi emphasised.

Hold up purely administrativeThe government believes the hold up “ispurely administrative; that there isn’t, sowe have been led to believe, a politicalagenda, or an issue that Portugal is concerned about with Gibraltar.”

The TIEA was signed in 2009 andimplemented in 2011, and since thenGibraltar has substituted tax-exempt com-pany status for some businesses to a lowflat rate 10 per cent corporation tax for allbusinesses, and other measures taken to

encourage openness in tax matters.“We have had requests [from

Portugal] under that TIEA, so there hasbeen co-operation already in terms of taxinformation exchange. There are historicallinks from the finance centre in terms ofproperty held, investments and structuresusing Gibraltar successfully… and we havediscussed with Portugal those areas whereGibraltar offers services that can beimproved and provide further services toPortuguese nationals,” Licudi explained.

Italy presents a similar situation,although the TIEA with Gibraltar was onlysigned in October. However, Licudi wasemphatic: “Again we have been led in effectto believe that there is absolutely no impediment, nor reason in practice or inprinciple, why we should be considered asa black listed jurisdiction.”

No discussion had yet taken place withFrance, but Licudi reasoned: “Ultimately, itis up to each country to decide what criteria they use; my understanding, is thatthose countries that still have a black list –it’s not many, quite frankly – look on twobasis; is there a taxation regime that isessentially mainstream, and is the countryco-operative from the point of view of anyinvestigations.”

Fighting tax fraudWhilst Gibraltar waits to see whether bothItaly and Portugal will stand by theirundertakings to remove the ‘tax haven’label, Minister Licudi assured that his government was not simply “goingthrough the motions” with regard to international tax and money launderingrequirements.

“When at the OECD conference, Imade clear to the 82 countries present -sending out the message - that tax evasionis wrong and everybody has to fight taxfraud by every means possible. When wetalk of co-operation on tax exchange andtransparency, we cannot just mean payinglip service to those principles,” he said.

Gibraltar had demonstrated that itmeant what it said. “We are not simply saying we want to be regarded as mainstream and onshore in Europe andtherefore be removed from whatever blacklist is in place,” Licudi asserted. It wasimportant for practical measures to be inplace, “so that transparency means transparency and co-operation means co-operation in practice.”

Ray Spencer

TAXATION

Removal from ‘black lists’ will see DTAs in 2013


Financial Services Minister Gilbert Licudi raisestax black list issue with Joao de Vallera,Portugal’s Ambassador to London.

FUNDS

Investment Managers: Regulatory Overload - AIFMD


Few investment managers woulddisagree that the current global state ofaffairs has translated into one of the

most challenging periods in the history ofthe investment industry. Not only is this theworst economic downturn since the GreatDepression of 1929, but investmentprofessionals are also facing anunprecedented amount of new wide-reaching legislation as regulators attempt toavoid another financial crisis of thismagnitude.

Alternative Investment FundManagers Directive2011/61/EU (AIFMD)Implementation date: 22nd July 2013.Official purpose: “To establish commonrequirements governing the authorisationand supervision of AIFMs in order to provide a coherent approach to the relatedrisks and their impact on investors and markets in the EU.”Types of investment managers affected: All EU investment managers, non-EU investment managers who manage EU fundsand non-EU investment managers who market funds in the EU.

AIFMD is the new piece of regulationwhich is most concerning to investmentmanagers, especially those who are based inthe EU or who intend to market their fundswithin the EU. As from 22nd July 2013, all alternative investment fund managers (AIFMs) will need to comply withAIFMD should they fall within its scope.

AIFMD applies to all AIFMs that manage alternative investment funds (AIFs):

(a) whose assets under management,including any assets acquired through theuse of leverage, in total exceed €100 million; or

(b) whose assets under management intotal exceed a threshold of €500 million

when those AIFs are unleveraged and haveno redemption rights exercisable during aperiod of 5 years following the date of theinitial investment in each AIF.

Any investment manager that does notfall below these thresholds will have tomandatorily comply with the AIFMD.Investment managers that fall outside thescope of AIFMD will have to register withthe relevant competent authority and willneed to provide such competent authoritywith some information on itself and thefunds it manages. However, such so-called “small AIFMs” may choose to opt-in andobtain full authorisation under the AIFMDfor example to take advantage of the passporting provisions of the directive.Investment managers must pay particularattention to the following implications ofAIFMD:

Depositary costsThe depositary is the key independent partyin AIFMD and is charged with protectingthe investors in the AIF. The depositary hasthree major roles as safe keeper of assets,monitor of cash, and overseer of NAV calculation and fund administration.

The depositary is liable for the loss ofassets and financial instruments in its control unless the loss is out of the depositary’s reasonable control and was unavoidable.

This liability goes beyond negligenceand is more resemblant of strict liability.These increased responsibilities for deposi-taries will translate into increased depositarycosts and larger total expense ratios whichwill ultimately be passed on to the investors.

Capital requirementsSelf-managed AIFs must have an initial cap-ital of at least €300,000. Where an AIFM isappointed as external manager of AIFs, theAIFM must have an initial capital of at least€125,000.

Where the value of the portfolio of theAIFs managed by an AIFM exceeds €250million, the AIFM must have additional capital of 0.02% of the amount exceeding€250 million, up to but not greater than €10million.

DelegationAIFMs can delegate certain tasks subject to specific procedures being followed.Delegation of portfolio and/or risk management is limited only to authorisedand supervised asset managers. The AIFMmay not delegate its functions to the extentthat it becomes a letter-box entity. TheAIFM will still be liable towards the AIF and the investors notwithstanding any delegation.

The directive requires that the AIFMcarries out substantially more functions than it delegates. This means that the common model where a self-managed funddelegates the day-to-day management to aninvestment manager and other functions toservice providers (such as valuation), whilstretaining overall control and supervision,will not be compatible with AIFMD. Thesemodels will need to undergo significantrestructuring and insource enough functions in order to comply.

Private placementManagers with non-EU funds face uncertainty over which distribution channels will be available to them onceAIFMD comes into force. According toAIFMD, such non-EU funds may be marketed under the private placementregimes of each EU jurisdiction until 2018.After 2018, such managers will have to relysolely on the so-called ‘third country provision’ which will first be available asfrom 2015. These provisions require the signing of supervisory and exchange of information cooperation agreementsbetween all the jurisdictions involved which

Continued on page 18

Aaron Payas, anAssociate at HassansInternational Law Firmreports on the impact ofthe Alternative InvestmentFund Managers Directive,on investment managers

FUNDS


may result in this route to market beingunworkable or even unavailable for somecountries.

Changes in contractualarrangementsManagers will need to revise all agreementswith each service provider to ensure thatthey can meet, as AIFMs, the requirementsunder AIFMD. In addition, there have beenindications that a single entity will not beable to simultaneously hold a MiFID and anAIFM licence, which means that someinvestment managers may need to considerrestructuring their firm or group of entities.Tax residency must also be taken into consideration if the fund management shiftsfrom one jurisdiction to another.

RemunerationThese new requirements form part of awider EU initiative to set conditions onremuneration to combat excessive risk taking and to harmonise remuneration provisions across financial sectors.Investment managers will need to revise

their remuneration policies to ensure compliance.

Operational changesGeneral changes to the investment manager’s operations will also be requiredto comply with new rules relating to risk management, leverage, calculation methodologies, regulatory reporting andothers.

SummaryInvestment managers should be running afull gap analysis to identify the areas inwhich they would not be compliant withAIFMD. Once authorised, AIFMs will beable to passport their services and markettheir AIFs freely within the EU. In addition,many are of the opinion that the AIFMDproduct may create its own brand and reputation similar to the UCITS product inthe retail sector.

Such branding may enhance investorconfidence in the AIFMD product making itmore appealing to investors. However,becoming AIFMD authorised carries theburden of compliance plus the significantadditional costs.

ConclusionIn light of all the new legislation already, orsoon to be, in force, it is unclear how investment managers will tackle the regulatory challenge, whether it be throughthe appointment of compliance officers,training individual asset managers withinthe firm or by engaging third party compliance advisers. It will be crucial however that they keeptheir costs down and be operationally efficient if they intend to be competitive intheir particular market. In economic terms,the barriers to entry of this industry arebeing raised higher than ever which meansthat new firms or latecomers will struggle togain market share whilst the biggest andmost efficient investment managers willthrive.

Full articleThis article is a short version of a larger one.For the full article, please visit the Hassanswebsite www.gibraltarlaw.com or simplysearch for “Aaron Payas RegulatoryOverload” in your internet browser.

www.gibraltarlaw.comwww.gfia.gi



Business people strapped for cash toexpand their operations andindividuals unable to find a mortgage

are being promised a helping hand by the130 years old Gibraltar Savings Bank (GSB),when its role is expanded from March.

Fabian Picardo, Chief Minister, openednew premises for the Bank at Main Street inearly December and said expansion of services at a time when other banks werereducing showed how “different the performance of Gibraltar is to the rest of the EU.”

In January, a government statementadded: “The Savings Bank will indeed beexpanding its deposits-taking function andthis will include the provision of interest-bearing current accounts and businessaccounts free from any bank charges, including free cash handling services.”

The development meets a December2011 Socialist/Liberal Alliance electionManifesto commitment to widen the Bank’sservices beyond deposit taking to include“loan facilities for small businesses to helpthem expand and see them through periodsof difficulty” by operating “a loan guarantee

scheme for small business.”Low initial deposits to open current

accounts at the Bank - not to be confusedwith the US-based Gibraltar Savings Bank ofNew Jersey - means access to balances bydebit card, and future on-line banking.

According to reports, some investors arehaving difficulty in opening accounts withGibraltar’s three existing retail banks.

Other retail banks on The Rock -Barclays, NatWest and Jyske – are closelymonitoring SBA developments, fearing itmay have an ‘unfair’ advantage. They faceUK head office-imposed restrictions on interest rates and conditions for their lendingto business. Some have reached a quota for‘acceptable’ lending at certain government-sponsored housing projects.

The government claims “the SavingsBank is more highly regulated (with its ownAct of Parliament) than any Bank that is regulated by the Financial ServicesCommission (FSC).” It went on: “Unlikeany other bank, however, the repayment ofall moneys deposited in the Gibraltar SavingsBank, together with interest thereon, is fully guaranteed by the Government.”

In response to GSD Opposition ques-tions, the government insists GSB will besubject to the same ‘Know Your Client’ andanti-money laundering requirements as anyother bank in Gibraltar.

Daniel Feetham, acting GSD andOpposition Leader, is concerned to see thatGSB “has an experienced and independentmanagerial team with a fully staffed compli-ance function,” issues that an independentregulator would examine before allowingexpansion of GSB services.

The Opposition Manifesto promisedGovernment funded home loans for firsttime buyers unable to raise mortgages frombanks, but committed only to “promoting alocally owned and controlled bank, withsuch Government participation as may benecessary”.

Gibraltar Savings Bank had £330m indeposits at end-March 2011: 10-YearAccumulator Bonds’, were launched lastyear, guaranteed by Government for depositsof £100 or more and paying 2 per cent inter-est in Year 1, increasing by 1 per cent eachyear, “as part of the continuing expansion ofthe role of the Gibraltar Savings Bank.”

BANKING

State-run bank counting on expansion

Gibraltar is fighting for a bigger shareof EU funds to help launchbusinesses, having achieved 20 in

2012 - the highest level yet of any year. Butthere could have been more start-ups if theterritory’s £3m allocation was greater.

With private sector entrepreneurs put-ting up £7m - 70 per cent of the total - 70new jobs have been created in areas thatpromote a green economy, jobs for long-term unemployed, and include catering andtelecoms. EU money covers a third of capital needed for the structure, premises,etc., and another Euro fund provides moneyto support trainees’ wages.

However, Employment Minister JoeBossano argues Gibraltar should get more ofthe funds, which come via the UK as the EUmember. “This [financial] year we haveused to the full our allocation and as the UKhas failed to use up all of the money available to it, rather than send it back [tothe EU], they should give us a bigger

amount,” he maintains.In all, nearly 400 new businesses were

registered last year providing some100 morejobs so far.

But despite increasing the number ofGibraltar residents working in the last 12months, Bossano says unemployment stillremains at 7 per cent, “because there were agroup of people who no longer sought workwhen there was no prospect of getting a joband who did not bother to register as unemployed.”

He explained: “In a small place likeGibraltar, if we get someone a job, the nextday I get three other guys turning up lookingfor work, because they’ve just met a matewho had gained that job.”

There are 19,000 full time jobs recorded by the government in Gibraltar,plus 1,000 part time, “but that includes, say,8,000 cross border workers, which distortsthe overall result on [local] unemploymentand understates the real extent of the issue”,

Bossano emphasises.When including people without a job

guarantee at the end of their training, theunemployed total was over 1,000, doublethat previously thought. “The real pressureof the labour market in Gibraltar is not simply the local worker, but everyone whocomes across [the border]”, he said.

No restriction on staffingBossano denies pressure on businesses toemploy only Gibraltarians. “Any EUnational can come across the border and runfrom shop to shop, bars and constructionsites offering themselves for work – andthere is nothing we can do about that,” headmitted.

“But we are saying to employers thatwe expect them to accept that it is in thepublic interest and in their own interest, toincrease the level of the working population,because the more people in jobs here the less

EMPLOYMENT

More new businesses with EU help to reduce unemployment

Continued on page 24



money we [as the government] are spendingon social assistance and the more spendingpower the consumer has in Gibraltar.”Whilst some jobs were specialist and theskill not available locally, others – such assupport staff – were on hand and should betaken on with training as required.

Employers had responded well; around450 trainees this year are covered byBusiness Partnership Agreements, “wherethe provider has a contract to provide jobsat the end of the training and so far, no-onehas reneged on that commitment”, Bossanoadded.

People despairing of getting employ-ment have turned up. “I finished up withsome 500 more people working and 500more people, who were already unemployedbut not registered. I employ one guy andtwo turn up. It’s a nightmare scenario,” hedeclared ruefully.

“That hidden labour market - some ofwhom logically must have been in the blackeconomy (otherwise they would have beenbegging in the streets, but doing odd jobshere and there, wherever they could) – is anelement that is reducing and we have now

got to a point where we have peaked; I hope.” This year, he expects less unemployment.

Graduates jobless tooAmongst the unemployed, however, are 68graduates in a territory that generously supports eligible school leavers paying allmajor costs to attend UK universities: half ofthe 400 youngsters reaching 16 last summertook up the offer!

“We should provide, in terms of man-power planning, for 400 job seekers everyyear, minus 150 retirees – so we expect themarket to grow by 250”, he declared.

And Bossano claimed: “Gibraltar expe-riences possibly the largest churn orturnover of labour in any economy in theEU – out of something of the order of15,000 jobs in the private sector there is aturnover of 5,000 – 33 per cent pa. Giventhat there is a flow of labour in and out, itmeans that even with zero growth, jobsbecome vacant.”

Bossano predicted: “By the end of ourfirst term of office in 2015, I aim to getunemployment down to the level I left it in1996 [when he was Chief Minister], to atotal of 330, which represents just under 3%of the resident population.”

EMPLOYMENT


Betting on more peopleVictor Chandler, Gibraltar’s pioneer of e-gaming 14 years ago, and already the territory’s largestemployer after the government, is in the midst of a “huge” recruitment drive to bring his total localstaff to 500 by the end of this year.As chairman of BetVictor, he recently said: “Most people have got bases elsewhere, but we focus

on keeping people here. It’s more expensive than having offices in Eastern Europe, for example, butI believe in keeping my directors nearby and being able to talk to them.”At the peak of the Victor Chandler operation in the first decade there were 350 staff, mostly from

Gibraltar, but with the growth of internet use, the number went down to 280 two years ago. Today, hehas a significant number of employees crossing the border from Spain.Product and software development is fuelling the expansion. “We try to recruit people from

Gibraltar, as that’s cheaper, but when you need such a spread of different talents, it’s impossible,”Chandler stated.Known as “the gentleman’s bookmaker”, Chandler noted: “It’s the same as anyone that’s produc-

ing cutting edge IT; you’re looking for people that can innovate and that can produce new things.”


Gibraltar is to become the focal pointthis year for a “Formula 1 type ofround-the-world race for power

boats” that promises to provide a significantbusiness gain for The Rock, attracting anexpected 0.5m visitors over the six monthsfrom July.

The ‘Circumnavigation Challenge’, pitsAmerica against Britain, in a bid to breakthe eleven years old New Zealand-heldworld power boat record of 61 days.

With an eight-strong crew, Portsmouth’sAlan Priddy, Captain of “Accomplish More”and instigator of the Challenge, leavesEuropa Point on November 2nd, aiming tocomplete the 23,850 nautical miles race “infar less than 40 days - certainly well beforeChristmas”, he told Ray Spencer.

The 90ft-long, single hull aluminumvessel will be based at Ocean Village Marina– one of the local sponsors – for five monthsof trials and at least another month afterachieving the hoped-for record. Hundreds ofthousands of spectators are expected to seethe craft that’s about the same length as a

Boeing 737 jumbo jet.According to research by Priddy, who

boasts 37 boating world records, 3,000 people will watch the race start, swelling to5,000 visitors for the planned finish in earlyDecember.

The visitor influx will bring substantialnew business to Gibraltar adding world-wide awareness of its location at the end ofthe Iberian peninsular - but problems mayarise in meeting demand for hotel rooms.The new tourist attraction will be includedon new ‘Rock Experience’ tours that another local Challenge sponsor, BlandGroup International, will aim at cruise linevisitors.

Priddy’s £2.5m project will be the foundation from 2015 of an all-comers bi-annual world challenge – five countrieshave already shown interest – and this eventalso will use Gibraltar as the focal point.

The American challenger has a smallercatamaran boat leaving on the same day andtime from Puerto Rico and is expected tocall en-route at Gibraltar to refuel. Both

craft must pass through the Suez andPanama Canals, cross the Tropic of Cancerand the Equator.

Accomplish More is being built shrouded in secrecy at Hayling Island beforebeing moved to and registered in Gibraltar,giving the project an appropriate strapline,“British – from start to finish”.

With a support team of 25 workingmuch as with Formula 1 racing cars,Priddy’s route takes in Puerto Rico, Panama,Acapulco, Honolulu, Guam, Singapore andOman.

It will be his second attempt at thisworld record – in 2002 he failed shortlyafter leaving Gibraltar having battledstorms, mechanical problems, illness, injury- and pirate attacks!

TOURISM

Round the world bid to boost visitors

Alan Priddy will start his second world recordattempt from Europa Point.


BUSINESS

New InvestorServices FirmADM Investor ServicesInternational (ADMISI) haveappointed Chad Thomson tomanage their recently openedGibraltar branch.

ADMISI is a full serviceinvestmentbrokeragecompany,with a 75yearcorporatehistory inLondonand the internationalinvestment markets. Thecompany has membership toover 20+ global exchangeswith offices in Chicago, NewYork, Kansas, Mumbai, HongKong, Singapore, and Taipei.

Chad Thomson stated:“The draw of Gibraltar for thecompany is the increasinggrowth in the Finance Sector,

especially the Funds Industry.We provide high qualitywholesale brokerage,specialising in executionservices, utilising leadingtrading technology backed upby a 24 hour dealing facility.”

He points out: “Thestrength lies in the company asa counterparty. Although aleading investment brokeragecompany, we are not ownedby a bank or larger financialservices firm.”

ADMISI is part of theADM Group, net sales for2012 were $89 billion.www.admisi.com

Isolas launchesmobileweb AppIsolas Law Firm hasannounced the launchof the mobileoptimised version oftheir website.

The web app is designedto add value to the client andpartner experience. Barrister& Business DevelopementManager, Selwyn Figuerasstated: “From the verybeginning, our focus has beenon usability, on ensuring easeof use and that clients and

partners alike be ableto contact a relevantlawyer within three

thumb taps of arriving on thesite.

The site seamlessly blendsinto the desktop version andautomatically displays theright version depending on theOS the visitor is using.” Headded: “Mobile web traffic isset to surpass desktop internettraffic by the end of Q1 2013,a staggering statistic when youconsider how far mobile hashad to come and the relativelyshort space of time in which ithas gone from frustratinglyslow and practically useless, toa key feature of our dailylives.”www.gibraltarlawyers.com

ROUND UPBusiness


BUSINESS

Google Street ViewFollowing their previousannouncement last year thatthe Google car had takenphotos of Gibraltar, U.S. basedcompany Google are pleased toannounce that the Street Viewimagery is now available to beviewed.

Gibraltar joins over fortyother countries available inStreet View. Tourists, businesstravellers, and locals can nowexplore the scenery and seepoints of interest.

Local businesses, fromhotels and restaurantsto shops, can alsobenefit from the StreetView technology byembedding GoogleMaps directly into theirsite for free, helpingthem to promote theirbusinesses.

Street View is alsoused in many countriesto help disabled peoplecheck wheelchair accessibility.www.maps.google.co.uk/streetview

Europa Trust supportsNelson Mandela charityEuropa Trust Company Ltd isproud to announce that it haschosen The Nelson MandelaChildren’s Fund as its charityfor the year.

The Nelson MandelaChildren’s Fund is aninternational, non-profitorganisation.

It was set up by NelsonMandela in 1995, a year afterhe became president of South

Africa. He wanted to create afund for children thatpromoted child health, withthe aim of giving them abetter future.

He commited one third ofhis Presidential salary for fiveyears to ensure theinternational continuation ofthe fund and as his charitablelegacy for children.www.europa.gi www.mandela-children.org.uk/

New terminal’s internetappealFlight information, airlinetimetables and detailed layoutmaps are amongst features on apioneering, user-friendly

Gibraltar Airport terminalwebsite and Smartphonemobile version just launched.

Intended for passengersand airport users generally,local firm Piranha Designsworked with governmentairline business consultantStuart Finlayson and TerminalDirector, Terence Lopez, to listairlines serving The Rock,retail and catering facilitiesand reduced mobility travelinformation.

The site lists theterminal’s corporate area forprivate jet travellers, withseparate entrance, dedicatedsecurity processing, and“various lounges designed tomake your stay as comfortableas possible”.

The airport handled387,219 passengers last year,1 per cent above 2011.www.gibraltarairport.gi

the ambience��

Wedding! Conference! Banquet!Themed Event! Corporate Evening!

Product Launch! Summer Ball! Christ-mas Party! New Years Extravaganza!Whilst enjoying dinner you will not fail to see ‘The

Khaima’, our brand new Moroccan style marquee andTHE new venue in Gibraltar for company events, wed-dings, dinners and a host of other uses. We are partic-ularly proud to have already hosted, to some acclaim,a number of important Gibraltar events this summerand you too can use this superb venue summer orwinter. So, whether it be a summer wedding for 200or a Christmas party venue for your company or or-ganisation Gibraltar now has a truly unique venue.Ask to see it for yourself or for a full infopack e-mail us at [email protected]

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CONTACTS

Association of Pension Fund Administrators (APFA)

Steven Knight, Chairman, Tel: + (350) 200 40466Email: [email protected] of Trust & Company Managers (ATCOM)

Marc X. Ellul, Chairman, Tel: + (350) 200 70921Email: [email protected] Bar Council

David Dumas, Chairman, Tel: + (350) 200 59026 / 79075Email: [email protected] [email protected] Association of Compliance Officers (GACO)

Ivan Perez, Chairman, Tel: + (350) 200 73520Email: [email protected] Bankers’ Association (GBA)

Emma Perez, President, Tel: + (350) 2000 2000Email: [email protected] Betting & Gaming Association (GBGA)

Freddie Ballester, Chairman, Tel: + (350) 200 40595Email: [email protected] Gibraltar Chamber of Commerce (GCC)

Nicholas Russo, President, Tel: + (350) 200 78376Email: [email protected] Gibraltar Finance Centre Council (GFCC)

Peter Montegriffo, Chairman, Tel: + (350) 200 79000Email: [email protected]

Professional Bodies based in GibraltarGibraltar Federation of Small Business (GFSB)

Stuart Rodriguez, Chairman, Tel: + (350) 200 47722Email: [email protected] Gibraltar Funds & Investments Association (GFIA)

James Lasry, Chairman, Tel: + (350) 200 64740 Email: [email protected] Insurance Association (GIA)

Chris Johnson, Chairman, Tel: + (350) 58452000 Email: [email protected] Insurance Institute (GII)

Derren Vincent, President, Tel: + (350) 200 51801Email: [email protected] Society of Accountants (GSA)

Freddie White, President, Tel: + (350) 200 45502Email: [email protected] of Trust & Estate Practitioners (STEP)

Peter Isola, Chairman, Tel: + (350) 2000 1892Email: [email protected] Gibraltar HR Forum

Ruth Halsall, Chair, Tel: + (350) 200 43865 Email: [email protected]

Asolution to Gibraltar’surgent need for a long-term, stable electricity

power supply to underpin theeconomy – the finance centre ande-gaming sectors, in particular - isto be revealed by end March.

By mid-year, private sectorpartnership arrangements forrenewable energy supply will be unveiled, as part of the jurisdiction’s bid to become aworld-leading carbon neutraljurisdiction. The government willnot generate renewable energyitself, but buy electricity fromrenewable sources, and a revisedEnvironmental Action Plan isimminent.

The developments form partof the Gibraltar Socialist / LiberalParty government’s pledge to beachieved in its four-year term inoffice to 2015. In year one, “151Manifesto commitments havebeen delivered”.

Promising greater “openness

and transparency”, Gibraltar’sparliament now sits monthly –previously three times annually –and live radio, TV and internetbroadcasts of proceedings areplanned, while Chief MinisterFabian Picardo answers citizens’questions quarterly via TV, radioand social media. He says it has “transformed Gibraltar into one of the most transparent democracies in the world”.

Neil Costa became Ministerfor Small Business – he also runsthe Port, Tourism and publictransport – and is reviewing all consumer-related legislationprior to the formation later thisyear of an Office of Fair Trading(OFT), which will have power toinvestigate and enforce decisions.

Other developments of con-cern to business include a PublicInterest Disclosure Act that protects “whistle-blowers’, whilelegislation for an independentanti-corruption and anti-bribery

authority and a FinancialServices Ombudsman have beenallocated for drafting “over theterm of office”, a governmentspokesman confirmed.

A 10 per cent discount forearly payment of business rateshas been introduced, along with20 per cent discount for start-upcompanies in the first year.Electricity and water costs are toremain frozen until the next election.

The greatest non-infrastruc-ture change potentially is aFreedom of Information Act,based on the UK seven years’experience, which Dr JosephGarcia, deputy chief minister,says will give citizens access to allGovernment information anddocuments - “one of the bestways to prevent corruption andbad practice in Government”.

The UK Act applies to government departments, publicauthorities and Parliament, and

any recorded information heldby or on behalf of an authority,including paper records, emails,information stored on computer,audio or video cassettes, micro-fiche, maps, photographs, hand-written notes or any other form of recorded information, normally should be suppliedwithin 20 working days!

Information can only bewithheld if the cost of doing soexceeds set limits, is vexatious,covers security issues, or fails “a public interest” test, but an independent InformationCommissioner can order disclo-sure.

However, scrapping of theprevious government’s plans fora €150m diesel oil-fired powerstation that would have meantincreasing electricity supply costsby 5 per cent a year for 20 years,“is probably one of the best deci-sions we have made”, Picardobelieves.

GOVERNMENT CHANGES

Promises to bring power and right to know

Pure FocusEnabling growth in business and societyDeloitte Gibraltar provides a full range of services which include auditing, tax and financial advisory services. As a member of Deloitte Touche Tohmatsu our services are guided by global common principles that influence the way we perform our daily work and ensure all our services are consistently of the highest quality.

Our service philosophy centers around strong partner involvement and understanding of your business needs. We listen to you and work with you. We understand the environment you operate in. We communicate regularly and provide information in a form you can use to make effective business decisions.

For more information, call Joseph L Caruana or Stephen J Reyes on: Tel: +350 200 41200, Fax: +350 200 41201 [email protected]

Merchant House, 22/24 John Mackintosh Square, P.O. Box 758, Gibraltar

© 2013 Deloitte Limited. A member of Deloitte Touche Tohmatsu Limited.

www.deloitte.gi

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