DSA/ICA Changes as of 16.06.2017

Dear ​A​ll,

We would like to inform you that the Dealers in Securities Act and
International Companies Act have been amended by the Government of Vanuatu
on 16th June 2017.

These Acts were part of a suite of thirteen pieces of legislation passed
with the aim of compliance with AML/CTF standards as set by FATF (Financial
Action Task Force).

Attached are the following copies:-

(i) Bill amending the Dealer in Securities Act which had
been passed and gazetted in Vanuatu on 16th June 2017.

(ii) Bill amending the International Companies Act which had
been passed and gazetted in Vanuatu on 16th June 2017.

Many of the amendments to the Dealer in Securities Act involve enhanced due
diligence of the beneficial owners of the company and the principle and
representative licence holders. BL Corporate Services already adopts the
majority of these requirements in the applications we undertake on behalf of
our clients.

One requirement where we will need additional information is in relation to
the original security deposit. The amendment requires us to advise the
authorities the "source of funds" for the initial security deposit.

The most significant amendment which will most affect our clients is in
relation to the security bond which must be lodged before a new licence is
issued. This bond has been increased to Vatu 5 million (approximately US​$​
50,000.00). The Original bond of Vatu 200,000 (approximately US​$​2,000.00)
was low but obviously an important factor in many clients choosing the
Vanuatu jurisdiction.

The amended act gives a current securities licence holder 6 months to comply
with the new Act; licenses to be renewed will have to deposit immediately
the new securities deposit with the Supreme Court before receiving the
license renewal; so an additional ​US$​48,000​ ​have to be paid in.

Unfortunately, the private sector was not consulted before the amended act
was presented to parliament otherwise we would have argued against the
significant increase in the Security bond. The private sector does not have
an issue with the new enhanced due diligence requirements.

Most accountants, lawyers and bankers in Vanuatu are members of a
professional body called The Vanuatu Finance Cent​er​ Association (VFCA).
Since 16th June 2017, the VFCA had meetings with representative of a number
of Government bodies with a view to decreasing the bond at the next sitting
of Parliament. We are slightly optimistic that with the support of the
private sector, our regulator, the VFSC and the VFIU and other interested
stakeholders we may be successful in having the bond reduced at the next
sitting of parliament in November 2017 - but on an island like Vanuatu
almost nothing is predictable anymore.

Furthermore the following new requirements come into force for ALL EXISTING
COMPANIES, up from December 2017 and for all new companies to be
incorporated immediately:

(1) A Principal Licensee shall submit to the Commissioner a
quarterly report outlining updated details which must include:

(a) Number of investors and amount of funds invested;

(b) Number of products offered to investors detailing the number of
each product offered;

(c) Details on what jurisdiction the product was offered;

(d) Details of vetting process of investors and criteria used;

(e) Number of refusals and reasons for refusal;

(f) Updated information on registered agent and office details;

(g) Updated information on shareholders and beneficial owners; and

(h) Report on any complaints received from investors.

Our advi​c​e:

We are recommending all SDL owners whose licenses are to be expired NOT TO
RENEW THE LICENSES and especially NOT TO PAY the additional ​US$​48,000​.00​.
Remember also in conjunction with the new requirements that the funds won't
be paid back if customer complaints have reached the Vanuatu Financial
Intelligence Unit, and also if the monthly reporting doesn't ful​​fil​l ​the
expectations of the regulators. We are worried especially about the amend​ed ​
fines that have been risen up to 1000% for little offenses, that it could
enable them easily to keep the Security Deposit even after closing down a
company. The biggest concern is, that the manpower and the knowledge and
skills of the judging and reviewing people in Vanuatu will cost immense
trouble to all customers and us included. The implementation of the new
requirements have been unpredictable to anyone - so as we fear also the
correct proceeding of them will be.....

Thanking you for your kind understanding.

Kind regards,

​PS. We are having a solution for you in a different jurisdiction!​

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