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Niue Sessional Legislation |
NIUE
INTERNATIONAL BANKING ACT 1997
No 227 of 1997
Arrangement of provisions
Part 1 - Preliminary
1 Short Title
2 Interpretation
Part 2 - Licensing of international banks
Division 1 - International banking business not to be carried on
in Niue except by license
3 International banking business not to be carried on except by licensee
Division 2 - General provisions in respect of licenses
4 Classes of international banking licences
5 Application for licence
6 Renewal of licence
7 Decision of Monetary Board
8 Period of validity of licence
9 Licence may be issued subject to conditions
10 Changes of particulars, etc. of licensee needs approval of Monetary Board
11 Changes of constitution of licensee needs approval of Monetary Board
12 License not transferable
13 Cancellation or suspension of licence
Division 3 - 'A' class licenses
14 'A' Class licensee to transact only international banking business
15 'A' Class licensee may maintain permanent establishment in Niue
16 Asset backing for 'A' Class license
Division 4 - 'B' Class licences
17 'B' Class licenses
18 Any currency restriction to be specified in 'B' Class licences
19 Asset Backing
Division 5 - 'C' Class licence
20 'C' Class International Banking Licences
21 Deposit required from 'C' class international banking licensee
22 Share capital
Part 3 - Exemption from taxation
23 Profits and dividends
Part 4 - Miscellaneous
24 Accounting records to be kept by licensees
25 Annual Report and Audit
26 Inspection
27 Supply of Information
28 Use of information by members of the Monetary Board and others
29 Breaches of professional secrecy
30 Delegation
31 Action does not lie against certain persons
32 Cabinet's powers
33 Regulations
34 Relationship of this Act to other Acts
35 Repeal
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AN ACT
to consolidate the law relating to the licensing of international banks
Part 1 - Preliminary
1 Short Title
(1) This Act may be cited as the International Banking Act 1997.
2 Interpretation
(1) In this Act-
""A" Class licence" means an "A" Class international banking licence;
""A" Class licensee" means the licensee under an "A" Class licence;
"accounting records", in relation to a licensee, includes the working papers and other documents necessary to explain the methods and calculations by which the licensee's accounts 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 those profit and loss accounts or balance sheets;
""B" Class licence" means a "B" Class international banking licence;
""B" Class licensee" means the licensee under a "B" Class licence;
"banking business" means the business of banking, in all its customary branches and departments (including that of a savings bank) and includes-
(a) to borrow, receive or take up money at interest or otherwise on current account, savings account, deposit account or other account repayable on the cheque, draft, order or authority of the customer;
(b) to lend or give credit at interest or otherwise with or without security;
(c) to discount, buy, sell or deal in bills of exchange, promissory notes, coupons, drafts, bills of lading, warrants, debentures, certificates, script, hire purchase agreements, or other instruments or securities whether or not transferable or negotiable;
(d) to grant or issue letters of credit or circular notes;
(e) to buy, sell and deal in bullion and specie;
(f) to deal in foreign or overseas exchange;
(g) to acquire, hold, or issue on commission, debentures, debenture stock, bonds, obligations, securities or investments of all kinds;
(h) to negotiate loans or advances;
(i) to become surety for the payment of money or the performance of a contract or obligation;
(j) to receive money or valuables on deposit or for safe custody or otherwise;
(k) to collect and transmit money or securities;
(l) to manage property;
(m) to transact all kinds of agency business commonly transacted by bankers;
(n) to-
(i) receive foreign funds through-
(A)the acceptance of foreign money deposits payable upon demand or after a fixed period or after notice; or
(B) the sale or placement of foreign bonds, certificates, notes or other debt obligation or other foreign securities; or
(C) any other similar activity involving foreign money or foreign securities; and
(ii) either in whole or in part using the foreign funds so acquired for-
(A) loans, advances, or investments, or
(B) the activities of the person carrying on that business for the account of or at the risk of that person; and
(o) any other activity prescribed by regulation to be an activity related to or ancillary to an activity specified this definition;
""C" Class licence" means a "C" Class international banking licence;
""C" Class licensee" means the licensee under a "C" Class international banking licence;
"Court" means the High Court of Niue;
"Government" means the Government of Niue;
"inspector" means a person appointed under section 26(1);
"international banking business" means banking business transacted exclusively with, on behalf of, or in respect of a person-
(a) who-
(A)Is treated in accordance with the laws of another country as a resident of that country; and
(B) in the case of an individual, is not ordinarily resident in or domiciled in Niue; and
(ii) does not engage in a trade or business within Niue; or
(b) who is-
(i) an international business company; or
(ii) a trust established under the Trusts Act 1994; or
(iii) a partnership registered pursuant to the Partnership Amendment Act 1994 other than a partnership that carries on a trade or business within Niue;
"international business company" means a company incorporated or continued pursuant to the International Business Companies Act 1994;
"international banking licence" means a valid "A", "B" or "C" Class licence issued by the Monetary Board under this Act;
"licence" means an international banking licence;
"licensee" means an "A", "B" or "C" Class licensee;
"Minister" means the Minister with the responsibility for financial matters;
"Monetary Board" means the Board of the Niue Bank established by the Niue Bank Act 1994 and includes an agent, delegate or nominee of the Monetary Board;
"permanent establishment", in respect of a person in Niue, means a fixed place of trade or business in Niue in which the trade or business of the person is wholly or partly carried on but a person is not to be taken as having a permanent establishment in Niue merely because the person carries on a trade or business in Niue through a broker, or an agent of independent status;
"person" does not include-
(a) the Government, an instrumentality of Government, or a Minister; or
(b) a trust or corporation in which the Government, an instrumentality of Government, or a Minister has the beneficial ownership of an interest;
"to reside" has the same meaning as "ordinarily resident" as defined by Article 17(2) of the Constitution, and "resident" and "ordinarily resident" have corresponding meanings;
"transfer", in relation to a licensee-
(a) includes-
(i) the sale, transfer, or other disposition of the shares in the capital of the licensee; and
(ii) an issue or allotment of new shares in the capital of the licensee; and
(iii) an event the effect of which is to transfer directly or indirectly the effective ownership, management, or control of the licensee; and
(b) also includes any of the events referred to in paragraph (a) that occur to-
(i) any holding company of the licensee; or
(ii)any holding company of any holding company of the licensee.
"Trustee Company" means a trustee company registered under the Trustee Companies Act 1994.
(2) Money amounts specified in this Act (including the fines referred to in subsection (2) are in the currency of the United States of America.
(3) If a penalty is set out at the foot of a section or subsection of this Act it means that a contravention of the section or subsection whether by act or omission is an offence punishable by a fine not exceeding the amount stated or by imprisonment not exceeding the period stated or both.
Part 2 - Licensing of international banks
Division 1 - International banking business not to be carried on in Niue
except by licensees
3 International banking business not to be carried on except by licensee
(1) A person who is not a licensee must not-
(a) transact international banking business in Niue; or
(b) hold himself or herself out as-
(i) transacting; or
(ii) being prepared to transact,
international banking business in Niue.
Penalty: Imprisonment for a term not exceeding 2 years or a fine not exceeding $50,000, or both.
(2) For the purpose of subsection (1) a licensee is not a licensee during any period the licensee's licence is suspended by the Monetary Board.
Division 2 - General provisions in respect of licences
4 Classes of international banking licences
(1) An international banking licence may be an "A", "B" or "C" Class international banking licence.
5 Application for licence
(1) An applicant for a licence must-
(a) be a body corporate; and
(b) in the case of an application for a "C" Class licence, be an international business company.
(2) An application for a licence must-
(a) be made to the Monetary Board; and
(b) contain such information as is specified by the Monetary Board; and
(c) be accompanied by-
(i) a copy, certified in a manner specified by the Monetary Board, of the document by which the applicant was constituted; and
(ii) the prescribed fee; and
(iii) such evidence of facts mentioned in the application form as is specified by the Monetary Board.
(3) An applicant may be required by the Monetary Board to furnish additional documents, information, or evidence.
(4) lf by virtue of the circumstances of an applicant for a licence the Monetary Board undertakes additional work to satisfy itself whether or not the applicant should be issued with a licence the Monetary Board may at any time require the applicant to pay additional fees to the Monetary Board not exceeding in total half the fees prescribed for the purpose of subsection (2)(c)(ii)
6 Renewal of licence
(1) The Monetary Board may renew a licence.
(2) An application to renew a licence must-
(a) be made to the Monetary Board in writing; and
(b) be accompanied by the prescribed fee.
(3) If by virtue of the circumstances of an applicant for the renewal of a licence the Monetary Board undertakes addition work to satisfy itself whether or not the licence should be renewed the Monetary Board may at any time require the applicant to pay additional fees to the Monetary Board not exceeding in total half the fees prescribed for the purpose of subsection (2)(b).
7 Decision of Monetary Board
(1) On an application for a licence or the renewal of a licence the Monetary Board may-
(a) issue or renew the licence; or
(b) reject the application; or
(c) defer making a decision and direct the applicant to furnish additional documents, information, or evidence.
(2) The Monetary Board need not give a reason for refusing to issue or renew a licence.
8 Period of validity of licence
(1) A licence is valid for 1 year from its date of issue or renewal unless-
(a) it becomes void by virtue of an attempted transfer of the licence; or
(b) it is cancelled by the Monetary Board.
(2) For the purpose of subsection (1) the date of renewal of a licence is to be taken to be-
(a) if the licence is renewed during its period of validity - the end of that period of validity; or
(b) if a licence is renewed after the end of its period of validity - the end of its previous period of validity.
9 Licence may be issued subject to conditions
(1) The Monetary Board may-
(a) issue a licence subject to conditions that must be complied with by the licensee; or
(b) at any time vary a licence to specify such conditions or additional conditions in it; or
(c) at any time vary or revoke such conditions.
10 Changes of particulars, etc. of licensee needs approval of Monetary Board
(1) A licensee must not make a material change in a particular specified in-
(a) the application for its licence; or
(b) a document that-
(i) accompanied the application; or
(ii) was subsequently provided to the Monetary Board for the purpose of the application,
without the approval of the Monetary Board.
(2) An application for approval under subsection (1) must-
(a) be made to the Monetary Board in writing; and
(b) be accompanied by the prescribed fee.
11 Changes of constitution of licensee needs approval of Monetary Board
(1) A licensee must not make a material change in the document by which it was constituted a body corporate without the approval of the Monetary Board
(2) An application for approval under subsection (1) must-
(a) be made to the Monetary Board in writing; and
(b) be accompanied by the prescribed fee.
12 Licence not transferable
(1) A licence is not transferable.
(2) An attempt to transfer a licence is of no effect and makes the licence void.
(3) Despite subsection (1) a 'C' Class licensee may transfer its licence to another
international business company with the written approval of the Monetary Board.
(4) An attempt to transfer a 'C' class licence without the written approval of the Monetary Board is of no effect and makes the licence void.
(5) An application for approval under subsection (3) must-
(a) be made to the Monetary Board in writing; and
(b) be accompanied by the prescribed fee.
13 Cancellation or suspension of licence
(1) The Monetary Board may-
(a) cancel a licence; or
(b) suspend a licence for such period as the Monetary Board determines,
if the Monetary Board is satisfied that the licensee, or a director, officer or employee of the licensee-
(c) has contravened or failed to comply with-
(i) a provision of this or any other Act; or
(ii) a condition specified in the licence; or
(d) has committed or is likely to commit a criminal offence whether in Niue or elsewhere that is-
(i) relevant to the business of the licensee; or
(ii) could prejudice the reputation of Niue.
(2) If the Monetary Board decides to cancel or suspend a licence in accordance with subsection (1) it must give written notice of its decision to the licensee at its registered office.
(3) A licence is cancelled or suspended as from the date notice is given in accordance with subsection (2)
(4) If a licence is cancelled, suspended or becomes void by virtue of an attempted transfer of the licence the person who was the licensee immediately prior to the cancellation, suspension or attempted transfer must immediately forwarded the licence to the Monetary Board.
Penalty: Fine not exceeding $5,000
Division 3 - 'A' class licenses
14 'A' Class licensee to transact only international banking business
(1) An 'A' Class licensee must not transact business other than international banking business.
15 'A' Class licensee may maintain permanent establishment in Niue
(1) An 'A' Class licensee must maintain a permanent establishment in Niue.
16 Asset backing for 'A' Class licence.
(1) An 'A' class licensee must at all times have-
(a) if it is not an international business company - a surplus of tangible assets over liabilities to a value of at least $2,500,000; or
(b) if it is an international business company-
(i) a paid-up capital of at least-
(A) $2,500,000; or
(B) an equivalent amount in a currency approved by the Monetary Board; or
(ii) a bank guarantee in a form and from a bank approved by the Monetary Board of the licensee's obligations in an amount of at least-
(A) $2,500,000; or
(B) an equivalent amount in a currency approved by the Monetary Board.
Division 4 - 'B' Class licences
17 'B' Class licences
(1) A 'B' Class licensee must not transact business other than international banking business and then only in the currencies (if any) specified in the licence.
(2) A 'B' Class licensee must not transact business except through a Trustee Company, unless with the approval of the Monetary Board the licensee maintains a permanent establishment in Niue.
(3) Approval under subsection (2) may be given subject to conditions.
18 Any currency restriction to be specified in 'B' Class licences
(1) The Monetary Board must specify in a 'B' Class licence if the licensee is-
(a) unrestricted in the currencies in which it may conduct its international banking business; or
(b) restricted in the currencies in which it may conduct its international banking business, and, if it is, specify those currencies in the licence.
19 Asset Backing for 'B' class licence
(1) A 'B' class licensee must at all times have-
(a) if it is not an international business company - a surplus of tangible assets over liabilities to a value of at least $500,000; or
(b) if it is an international business company-
(i) a paid-up capital of at least-
(A) $500,000; or
(B) an equivalent amount in a currency approved by the Monetary Board; or
(ii) a bank (guarantee in a form and from a bank approved by the Monetary Board of the licensee's obligations in an amount of at least-
(A) $500,000; or
(B) an equivalent amount in a currency approved by the Monetary Board.
Division 5 - 'C' class licence
20 'C' Class International Banking Licences
(1) Subject to subsection (2), a 'C' Class licensee must not transact business other than international banking business.
(2) Unless exempted by the Monetary Board a 'C' Class licensee must not issue a cheque or draft drawn on the licensee.
(3) Unless exempted in part or in whole by the Monetary Board a document issued by or on behalf of a 'C' Class licensee must have endorsed on it a notice stating "The [name of bank] holds a 'C' Class international banking licence issued under the International Banking Act 1997 of Niue.".
21 Deposit required from 'C' class international banking licensee
(1) A "C" Class licensee must have $5,000 deposited with the Government.
(2) The Government must refund a deposit under subsection (1) if-
(a) 6 months has passed since the service on the Monetary Board of a written notice by the licensee advising the Monetary Board that the licensee has ceased to carry on offshore banking business; and
(b) the Monetary Board is satisfied that-
(i) during those 6 months the licensee has not carried on international banking business; and
(ii) all liabilities of the licensee are fully liquidated or otherwise provided for.
(3) Despite subsection (2) a deposit is forfeited to the Government if the Monetary Board cancels a "C" Class licence.
(4) A deposit under subsection (1)-
(a) must be paid into and forms part of the Niue Government Account; and
(b) until refunded in accordance with subsection (2) is to be taken to be the property of the Government.
(5) Interest earnt on a deposit under subsection (1) is the property of the Government.
22 Share capital
(1) A "C" Class licensee must have a paid up share capital of at least $50,000.
Part 3 - Exemption from taxation
23 Profits and dividends
(1) There is exempt from any direct or indirect tax-
(a) the profits or gains of a licensee; or
(b) interest earned by a licensee; or
(c) interest paid to a depositor by a licensee,
in respect of international banking business the licensee does from within Niue.
(2) There is exempt from any direct or indirect tax-
(a) dividends or earnings of a licensee; or
(b) interest earned by a licensee; or
(c) interest paid to a depositor by a licensee,
attributable to the shares or securities of the licensee that are beneficially owned by another licensee or by a person who is not a resident of Niue.
Part 4 - Miscellaneous
24 Accounting records to be kept by licensees
(1) A licensee must-
(a) keep accounting records necessary to record and explain correctly the transactions and financial position of the licensee; and
(b) keep its accounting records in a manner that will enable-
(i) true and fair accounts of the licensee to be prepared from time to time; and
(ii) the accounts of the licensee to be conveniently and properly audited.
25 Annual Report and Audit
(1) A licensee must submit audited accounts to the .Monetary Board within 6 months of the end of the licensee's financial year
(2) The audit must-
(a) be carried out by an auditor approved by the Monetary Board; and
(b) be presented to the Monetary Board in a form specified by the Monetary Board.
26 Inspection
(1) The Monetary Board may appoint a person to be an inspector for the purposes of this section.
(2) An inspector may upon production of proof of appointment inspect during the normal office hours of a licensee-
(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 its international banking business; and
(e) the premises where the licensee carries on its international banking business.
(3) A person must not prevent or hinder an inspector carrying out an inspecting under subsection (2).
Penalty: Fine not exceeding $5,000
27 Supply of Information
(1) A licensee must furnish to the Monetary Board such information in respect of its international banking business conducted in Niue as the Monetary Board directs.
(2) Despite subsection (1) the Monetary Board has no power to give a direction requiring information to be furnished with respect to the affairs of an individual customer of a licensee.
28 Use of information by members of the Monetary Board and others
(1) A person who is-
(a) a member of the Monetary Board; or
(b) an agent, delegate or nominee of the Monetary Board; or
(c) an employee of-
(i) the Monetary Board, or
(ii) an agent, delegate or nominee of the Monetary Board; or
(d) an Inspector; or
(e) a public officer,
must not reveal to another person information obtained in the course of his or her duties under this Act except in the course of his or her duties.
Penalty: Fine not exceeding $5,000
29 Breaches of professional secrecy
(1) A person must not-
(a) divulge information in Niue or elsewhere in relation to-
(i) international banking business in Niue; or
(ii) the transfer of money and property into or out of Niue in the course of international banking business; or
(iii) the account of a person with a licensee or an item of such an account; or
(iv) whether a person has or had an account with a licensee,
which the person has become aware of in his or her capacity as-
(v) an officer, employee, authorised agent or auditor of a licensee; or
(vi) an officer, employee, authorised agent or auditor of an authorised agent or auditor of a licensee; or
(b) attempt to induce a person to breach professional secrecy in relation to any such matters.
Penalty: Imprisonment for a term not exceeding 2 years or a fine not exceeding $20,000 or both.
(2) An offence may be committed under subsection (1) even though the official, employment or professional relationship has ended.
(3) It is not an offence for a person to divulge information referred to in subsection (1)-
(a) to an Inspector or the Monetary Board when required to do so by the Inspector or Monetary Board; or
(b) to a person on whose behalf the international banking business is being carried out; or
(c) in Niue, to an officer or employee of the same licensee in the performance of the person's duties as an officer or employee of the licensee; or
(d) to an officer or employee of a bank or other financial institution outside Niue if all the people concerned in the banking business or in whose name the account stands, consent in writing to the person doing so; or
(e) to an officer or employee of the licensee outside Niue, so long as-
(i) the names of the persons concerned in the banking business; and
(ii) any information which might identify them; and
(iii) the names in which accounts stand and the balances of those accounts are not divulged; or
(f) with the written approval of the Minister, to the government of or to a public officer of another country if-
(i) the information is not to be used otherwise than as part of-
(A) an amount representing the total assets of a licensee in Niue; or
(B) an amount representing the total sum transferred to Niue from that country or from Niue to that country and the currencies in which such monies were transferred; and
(ii) the amounts of individual banking transactions, the names in which accounts stand, and the balances of those accounts are not divulged;
(g) to a foreign government or to a court or tribunal of a country including Niue to the extent that the Court so directs after having been satisfied that the information is required and will not be used except for the purposes of an investigation or prosecution of a person in relation to-
(i) the sale or the laundering of the proceeds of sale of a prohibited narcotic substances; or
(ii) the laundering of the proceeds gained from any other serious criminal activity,
whether or not that sale or laundering or other serious criminal activity occurred in Niue.
(4) For the purposes of subsection (3)(d), a person concerned in international banking business and in whose name an account stands is to be taken to have consented to an officer or employee of a licensee divulging to an officer or employee of a bank or other financial institution outside Niue such information of the international banking business being carried out as is essential to carry out that business, but the consent taken to have been given pursuant to this subsection does not apply in any other circumstance.
(5) Nothing in this section prevents the Court from requiring, a person to give evidence or to produce a document in proceedings in the Court in respect of a fact relevant in those proceedings that the person could otherwise be required to give or produce.
(6) An offence under subsection (1)-
(a) by an officer or employee of a licensee or of an auditor or agent of a licensee; or
(b) by a person after the termination of the person's employment as an officer or employee of a licensee or of an auditor or agent of a licensee,
whether the offence occurs in Niue or elsewhere, is to be taken also to be an offence by that license, auditor or agent.
(7) Despite subsection (6), an offence under subsection (1) by a person after the termination of the official or employment relationship with the licensee or auditor or agent is not to be taken to be also an offence by the licensee or the auditor or agent if the licensee or auditor or agent demonstrates that on the balance of probabilities it took all reasonable steps necessary to prevent the offence by the person.
30 Delegation
(1) The Monetary Board may, either generally or as otherwise provided by the instrument of delegation, by writing, delegate all or any of its powers or functions under this Act.
(2) A power or function delegated under subsection (1) when exercised or performed by the delegate is to be taken to have been exercised or performed by the Monetary Board.
(3) A delegation of a power or function under this section-
(a) is revocable at will; and
(b) does not prevent the exercise of the power or the performance of the function by the Monetary Board.
31 Action does not lie against certain persons
(1) An action does not lie against the Government, the Minister, the Monetary Board, or a member or employee, agent, delegate or nominee of the Monetary Board in respect of their duties under this Act.
32 Cabinet's powers
(1) The Cabinet may-
(a) subject to such terms and conditions it thinks fit, exempt a licensee from all or any provision of this Act; and
(b) revoke or vary an exemption so granted.
(2) The Cabinet may-
(a) prohibit a body corporate from being issued a licence or any class of licence; or
(b) direct a licensee to cease to carry on its business or a part of its business immediately or within such time as is specified by the Cabinet.
(3) The validity of action taken by the Cabinet under this section cannot be questioned in the Court.
33 Regulations
(1) The Government may make regulations to prescribe all matters that-
(a) by this Act are required or permitted to be prescribed by regulation; or
(b) are necessary to carry out or give full effect to the purposes of this Act and for its due administration.
34 Relationship of this Act to other Acts
(1) If a provision of this Act conflicts with a provision of another Act (other than the Constitution) the provision of this Act prevails.
35 Repeal
(1) The Off-Shore Banking Act 1994 and the Off Shore Banking Amendment Act 1994 are repealed.
The Niue Assembly passed this Act on the 17th day of December 1997.
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