Finance Minister Eugene Cox yesterday gave an update on the Island's progress in meeting recommendations of a KPMG review on the financial regulations of UK overseas territories.

The review followed the UK Government presenting a White Paper in 1999 “Partnership for Progress and Prosperity: Britain and the Overseas Territories,” in recognition that a number of the overseas territories had developed successful offshore financial sectors.

In order to ensure that the “reputation for honest administration and probity be preserved and enhanced,” the UK Government appointed accounting firm KPMG to conduct a review of the Caribbean Overseas Territories and Bermuda.

For Bermuda, there were in particular three areas that were to be addressed.

Mr. Cox said yesterday: “This updated report confirms Bermuda's commitment to ensuring that its financial regulation continues to meet international standards.

“It also makes clear the sustained progress being made by Government on the wider review and upgrading of Bermuda's suite of financial regulatory information to which we are committed.”

Mr. Cox added that there were three areas highlighted by the UK for “priority action”.

These were the establishment of independent regulatory authorities, completion of anti-money laundering regimes and legal powers to enable us to assist overseas regulators by obtaining information to assist with legitimate investigations.

Mr. Cox underscored that an important element of the recommendations had already been achieved with the separation of the Island's insurance regulatory body from Government, in line with international standards.

This was completed in January with moving the Insurance Division, which formerly came under Government in the Registrar of Companies department, to the Bermuda Monetary Authority.

At the time Mr. Cox said the net result of that action was that the BMA was now the sole regulatory body for insurance and the financial services sector in Bermuda.

A press statement from the Foreign and Commonwealth Office (FCO) in London late last year indicated that the framework through which to work with foreign regulators was something that Bermuda needed to address. “As regards the introduction of compulsory powers to obtain information to assist foreign regulators,” the FCO statement said and added: “In Bermuda the existing regulatory powers need to be strengthened.”

On that score, Mr. Cox said: “As regards information sharing capabilities, amendments to the Bermuda Monetary Authority Act and the Insurance Act, approved in the latter part of last year, have already provided many of the relevant powers.”

Mr. Cox added: “Further provisions will be included in the forthcoming Companies Act amendments in order to deal with the remaining aspects,” he said.

Ruth Kelly, Economic Secretary to the UK Treasury, said last year that the Territories had made a commitment to implement the remaining KPMG recommendations by Summer 2002. And that progress reports would be published in February, “explaining how their implementation plans are progressing”.

Government's update this week included plans for further tightening of existing legislation with amendments slated to come before the House throughout the year. These include: amendments to insolvency law, amendments to the Insurance Act to enhance the scope of on-site inspections, major amendments to the Investment Business Act 1998, and amendments to the Proceeds of Crime Act and Regulations.