JM by JakobFix

VIEWS: 77 PAGES: 92

									          September 2010
(reflecting the legal and regulatory
    framework as at May 2010)
                                                                                                 TABLE OF CONTENTS – 3




                                            Table of contents

About the Global Forum.................................................................................................... 5

Executive Summary ........................................................................................................... 7

Introduction ...................................................................................................................... 11
     Information and methodology used for the peer review of Jamaica ............................... 11
     Overview of Jamaica ...................................................................................................... 12
     General information on legal system and the taxation system ....................................... 12
     Overview of commercial laws and other relevant factors for exchange of
     information ..................................................................................................................... 16
     Recent developments ...................................................................................................... 17
Compliance with the Standards ...................................................................................... 19

A.          Availability of Information .................................................................................. 19
     Overview ........................................................................................................................ 19
     A.1. Ownership and identity information.................................................................... 20
     A.2. Accounting records ............................................................................................. 38
     A.3. Banking information ........................................................................................... 42
B.          Access to Information ........................................................................................... 47
     Overview ........................................................................................................................ 47
     B.1. Competent Authority‘s ability to obtain and provide information ...................... 48
     B.2. Notification requirements and rights and safeguards .......................................... 61
C.          Exchanging Information....................................................................................... 65
     Overview ........................................................................................................................ 65
     C.1. Exchange-of-information mechanisms................................................................ 65
     C.2. Exchange-of-information mechanisms with all relevant partners ....................... 71
     C.3. Confidentiality..................................................................................................... 72
     C.4. Rights and safeguards of taxpayers and third parties .......................................... 74
     C.5. Timeliness of responses to requests for information ........................................... 74
Summary of Determinations and Factors Underlying Recommendations ................. 77




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
4 – TABLE OF CONTENTS
Annex 1: Jurisdiction’s response to the review report.................................................. 81

Annex 2: List of all exchange-of-information mechanisms in Force ........................... 82

Annex 3: List of all laws, regulations and other material received .............................. 83

Annex 4: Overview of Commercial Laws and Other Relevant Factors for
Exchange of Information ................................................................................................. 85




                      PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
                                                                       ABOUT THE GLOBAL FORUM – 5




                             About the Global Forum

          The Global Forum on Transparency and Exchange of Information
      for Tax Purposes is the multilateral framework within which work in the
      area of tax transparency and exchange of information is carried out by
      over 90 jurisdictions which participate in the work of the Global Forum
      on an equal footing.
           The Global Forum is charged with in-depth monitoring and peer
      review of the implementation of the standards of transparency and
      exchange of information for tax purposes. These standards are primarily
      reflected in the 2002 OECD Model Agreement on Exchange of
      Information on Tax Matters and its commentary, and in Article 26 of the
      OECD Model Tax Convention on Income and on Capital and its
      commentary as updated in 2004, which has been incorporated in the UN
      Model Tax Convention.
          The standards provide for international exchange on request of
      foreseeably relevant information for the administration or enforcement
      of the domestic tax laws of a requesting party. Fishing expeditions are
      not authorised but all foreseeably relevant information must be provided,
      including bank information and information held by fiduciaries,
      regardless of the existence of a domestic tax interest or the application of
      a dual criminality standard.
           All members of the Global Forum, as well as jurisdictions identified
      by the Global Forum as relevant to its work, are being reviewed. This
      process is undertaken in two phases. Phase 1 reviews assess the quality
      of a jurisdiction‘s legal and regulatory framework for the exchange of
      information, while Phase 2 reviews look at the practical implementation
      of that framework. Some Global Forum members are undergoing
      combined – Phase 1 plus Phase 2 – reviews. The ultimate goal is to help
      jurisdictions to effectively implement the international standards of
      transparency and exchange of information for tax purposes.
          All review reports are published once approved by the Global Forum
      and they thus represent agreed Global Forum reports.
          For more information on the work of the Global Forum on
      Transparency and Exchange of Information for Tax Purposes, and for
      copies of the published review reports, please refer to
      www.oecd.org/tax/transparency


PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
                                                                            EXECUTIVE SUMMARY – 7




                                 Executive Summary

       1.        This report describes and analyses the legal and regulatory
       framework for transparency and exchange of information for tax
       purposes in Jamaica.
       2.         Jamaica was a British colony and became independent nation
       in 1962. Its legal system is based on English Common Law. Many of its
       laws were made during the British rule and continue to be in operation
       without significant changes. In October 2008, Jamaica announced it
       will develop an International Financial Services Centre. As a result,
       Jamaica was invited to become a Global Forum member. Jamaica
       joined the Global Forum in July 2010 and has actively co-operated in
       this review.
       3.         As regards the availability of information on the legal
       ownership of companies, Jamaica has laws that ensure that such
       information is to be held with the company and provided to the
       government authorities such as the Registrar of Companies. Further, the
       anti-money laundering legislation requires that information on the
       owners of companies be provided to banks or financial institutions, if
       these are their customers. However, a deficiency has been noted in the
       availability of information on the owners of ―share warrants to bearer‖,
       which grant a right to shares, without the need to record who holds the
       share warrant to bearer. This issue is of less importance since the
       system of issue of share warrants is in abeyance.. It may further be said
       that the provisions under the relevant laws provide for investigative
       powers to the company itself and to the government authorities to
       inquire into the ownership of a company where the legal owners hold
       the interest on behalf of other persons (i.e. nominee arrangement).
       There is no provision requiring disclosure of ownership information by
       companies incorporated outside Jamaica but being tax resident in
       Jamaica due to presence of central management and control in Jamaica.
       4.         Jamaica does not have a specific law in place to impose any
       obligations on the partnerships and trusts to keep and retain ownership
       and identity information. However, ownership and identity information
       is required to be submitted to the registration and tax authorities.
       5.     Jamaican law ensures the maintenance of accounting records
       by companies. Partnerships, trusts and other taxable entities are



PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
8 – EXECUTIVE SUMMARY
     compulsorily required to maintain accounting records for tax purposes.
     Although administrative laws require government authorities to hold
     the records submitted to them and the statute of limitations means all
     records are kept for more than 5 years, there is not a specific
     requirement in the law for non-regulated entities to maintain that
     information for a five year period. This does not include financial
     institutions and other businesses and professions covered by the anti-
     money laundering laws and those laws require a compulsory five year
     retention period for records relating to customer due diligence and
     financial transactions.
     6.         Jamaica has two sources of law allowing its revenue authority
     to access information. One suffers from the fact that it cannot be used
     to obtain information from financial institutions and similar entities,
     and the other law which is used for requests to financial institutions is
     restricted by the requirement that the person in question be under
     examination by the Jamaican tax authorities. Latter tantamount to a
     domestic tax interest, which is an obstacle to the effective exchange of
     information. The report recommends that Jamaica issue and adopt
     regulations whereby the ability to apply administrative procedures to
     obtain the information does not require the taxpayer to be under
     examination or persons to be taxpayers in Jamaica.
     7.        Sanctioning powers are in place to secure the compliance of
     the provisions. The effectiveness of penalties will be examined in the
     course of the Phase 2 review.
     8.        Jamaica has tax treaties with most of its large economic
     partners. The treaty with Switzerland does not have an EOI Article.
     Only one of its bilateral treaties and its only TIEA provide for exchange
     of information in accordance with the standard. Jamaica is also a
     signatory to the multilateral CARICOM1 Income Tax Treaty which
     includes 10 other countries2 and, because of restrictions in Jamaica‘s
     and some of its partners‘ domestic systems with respect to availability
     and access to information, this too does not meet the international
     standard. It is recommended that Jamaica pursue its policy to conclude
     agreements to the standard.
     9.       Jamaica has a system which provides for international
     exchange of information for tax purposes but this system does not have

1
      Caribbean Community
2
      Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, St. Kitts
      and Nevis, Saint Lucia, St. Vincent and the Grenadines, and Trinidad and
      Tobago.


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                                                                            EXECUTIVE SUMMARY – 9



       all the elements which ensure effective exchange of information. These
       issues warrant close attention by the Global Forum in the context of
       Jamaica‘s Phase 2 review of its exchange of information practices and
       it is important that Jamaica progress its planned reform of legislation
       governing collection, disclosure and exchange of information for tax
       purposes.




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
                                                                                 INTRODUCTION – 11




                                        Introduction


Information and methodology used for the peer review of Jamaica

       10.        This assessment of the legal and regulatory framework of
       Jamaica was carried out in accordance with the international standards
       for transparency and exchange of information as described in the
       Global Forum‘s Terms of Reference,3 and was prepared using the
       Global Forum‘s Methodology for Peer reviews and Non-Member
       Reviews.4 The assessment was based on the laws, regulations, and
       exchange-of-information mechanisms in force or effect as at May 2010,
       other materials supplied by Jamaica, and information supplied by
       partner jurisdictions.
       11.       The Terms of Reference break down the standards of
       transparency and exchange of information into 10 essential elements
       and 31 enumerated aspects under three broad categories:
       (A) availability of information; (B) access to information; and (C)
       exchanging information. This review assesses Jamaica‘s legal and
       regulatory framework against these elements and each of the
       enumerated aspects. In respect of each essential element a
       determination is made that either (i) the element is in place, (ii) the
       element is in place but certain aspects of the legal implementation of
       the element need improvement, or (iii) the element is not in place.
       These determinations are accompanied by recommendations for
       improvement where relevant.
       12.       The assessment was conducted by a team consisted of two
       assessors and a representative of the Global Forum Secretariat: Ms.
       Maria Dolores Gil Esnal from the Federal Administration of Public
       Revenue, Argentina; Alexandra Storckmeijer from the Federal Tax
       Administration, Switzerland; and Mr. Sanjeev Sharma from the Global
       Forum Secretariat. The assessment team assessed the legal and
       regulatory framework for transparency and exchange of information
       and relevant exchange-of-information mechanisms in Jamaica.
3
        See Terms of Reference to Monitor and Review Progress Towards Transparency
        and Exchange of Information for Tax Purposes (full text available at
        http://www.oecd.org/dataoecd/37/42/44824681.pdf)
4
        See Methodology for Peer reviews and Non-Member Reviews (full text available
        at http://www.oecd.org/dataoecd/37/41/44824721.pdf )



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12 – INTRODUCTION
Overview of Jamaica

      13.        The country of Jamaica consists of the single island situated
      towards the western end of the Caribbean Sea and the Pedro and
      Morant Cays (islets). The nearest neighbours are Cuba 145 km to the
      north and Haiti, part of the island of Hispaniola, 100 km to the east.
      Jamaica has a geographical area of 10 991 square kilometres (4 223
      square miles) and a total coastline of 1 022 kilometres (634 miles). The
      official language of Jamaica is English and it had a population of
      2 698 8005 as at 31 December 2009. Jamaica is a member of the
      Commonwealth of Nations and it became an independent nation in
      1962. It is divided into three counties and 14 parishes. Local
      governments are funded by local taxes and do not have regulation-
      making powers on issues beyond the scope of local administration. The
      capital city is Kingston (- 5 GMT).
      14.       The Jamaican economy is heavily dependent on services,
      mainly consisting of tourism and financial services, which account for
      more than 60% of GDP. The tourism industry earns over 50% of the
      country's total foreign exchange earnings. The balance of its foreign
      exchange is mainly earned from export of Bauxite/Alumina, garments
      and agriculture products. Its major export trading partners are the
      United States of America (USA), Canada, United Kingdom (UK),
      Netherlands, France etc., whereas its imports are mainly from USA,
      Trinidad and Tobago, Germany and Venezuela. Jamaica‘s per capita
      Gross National income was USD 4 870 in 2008 (World Bank).The
      currency of Jamaica is the Jamaican Dollar. (USD 1 was equal to
      approximately JMD 86 as at 30 June 2010). Jamaica is member of the
      CARICOM6 single market and economy.

General information on legal system and the taxation system


      Legal system
      15.      The Head of State is the British Monarch represented by the
      Governor General in Jamaica. Jamaica is a parliamentary democracy,
      modelled on the Westminster system. The Parliament comprises the
      monarch, the Senate and the House of Representatives. The Senate
      comprises 21 members appointed by the Governor General; 13
      appointed in accordance with the advice of the Prime Minister and 8 in
5
      http://statinja.gov.jm/population.aspx, accessed 13 May 2010
6
      http://www.mfaft.gov.jm/?q=caribbean-community-caricom


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                                                                                 INTRODUCTION – 13



       accordance with the advice of the Leader of the Opposition. The House
       of Representatives consists of 60 members elected under universal adult
       suffrage. The executive power of the government resides in the council
       of ministers (cabinet), which is led by the Prime Minister. The Prime
       Minister is the leader of the majority party or the leader of the majority
       coalition in the House of Representatives. Constitutionally, elections
       must be held every five years, but they may be called at any time by the
       Prime Minister.
       16.        The legal system of Jamaica is based on English common
       law. Justice is administered by the court system7 consisting of the Court
       of Appeal, Supreme Court, Resident Magistrate‘s Court and Court of
       Petty Sessions. The Supreme Court has original jurisdiction and decides
       applications for redress of breaches of fundamental rights and freedom
       provisions of the Constitution. Within the Supreme Court, there are
       specialised courts such as the Revenue Court, established in 1971, and
       the Commercial Court, which began operations in February 2001. The
       hierarchy of laws in Jamaica is constituted by: (i) the Constitution of
       Jamaica; (ii) statutes and treaties; and (iii) common law and customs.
       17.       Taxpayers aggrieved by decisions of the tax administration
       can seek judicial review through civil proceedings in the Supreme
       Court. Either party can contest a decision of the Supreme Court in the
       Court of Appeal and the matter could finally go to the Judicial
       Committee of the Privy Council.
       18.       For transposing the tax treaties into domestic law, the
       Minister of Finance and Public Service makes a Cabinet Submission for
       Cabinet Approval. The approval is the ratification process. Thereafter,
       the treaty is incorporated into Jamaican laws where the Minister of
       Finance makes an Order pursuant to s.83 of the Income Tax Act 1955
       (ITA). The Order (which includes the actual treaty) is published by way
       of a Notice in the Gazette which introduces the treaty into Jamaican
       Law.

       Taxation System
       19.       All taxes on income are levied by the central government.
       Certain taxes on real property and licence fees are levied by local
       government. Jamaica levies tax on income of every person and the basis
       of imposition of income tax is provided in s.5 of the ITA. The ‗person‘
       means any individual and also any body of persons, which include
       corporate. The ―body corporate subject to income tax‖ means any body
7
        http://www.moj.gov.jm/courts



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14 – INTRODUCTION
      corporate, wherever resident, other than one whose entire income is by
      s.12 of the ITA or any other enactment exempted or relieved from
      income tax.
      20.        Every person liable to pay income tax is required to deliver a
      true and correct return of his whole income in the prescribed form (ITA,
      s.67). Persons committing defaults in filing returns of income or
      making false claims are subject to penalties (including fines) and are
      liable to prosecution under the ITA. In Jamaica the tax year coincides
      with the calendar year, however the accounting year (i.e. fiscal year)
      starts on 1 April and ends on 31 March.
      21.        Income tax is charged on the worldwide income of resident
      individuals in Jamaica and the income of non-residents derived from
      Jamaica. There is no income tax on capital gains earned on the disposal
      of capital assets. However, there is a transfer tax of 4% of gross
      consideration or market value when title passes. Resident individuals
      which are considered non- ―domiciled‖ in Jamaica, as approved by the
      Commissioner, or are Commonwealth citizens who are resident but not
      ordinarily resident in Jamaica are in principle taxable on foreign income
      only on a remittance basis (to the extent that such income is received in
      Jamaica (s.27 ITA)). The test of residency in Jamaica is determined by
      whether the resident is ordinarily resident or domiciled in Jamaica. An
      individual is considered resident in Jamaica, if the stay in the island is
      more than183 days. The rate of tax for individual is fixed at 25%,
      however due to revenue enhancing measures, a progressive rate
      structure (starting at 25% and going up to a maximum of 35%) has been
      prescribed, which is scheduled to come to an end in December 2010.
      22.       Jamaican resident companies are liable to income tax on all
      sources of non-exempt income wherever arising. A company is
      regarded as resident in Jamaica if its central management and control is
      located and exercised in Jamaica. A non-resident company is taxed on
      income of a branch carrying on a trade or business in Jamaica, i.e. the
      income arising in Jamaica. The rate of tax on companies is 33.3%.
      23.      Partnerships and joint ventures are not regarded as separate
      persons for income tax purposes and are fiscally transparent entities.
      Their members or participants are chargeable in their own right and in
      accordance with their residence status on their share of profits as if they
      had derived the profits directly. These entities are required to file tax
      returns.
      24.        Trusts and estates are regarded as separate entities for tax
      purposes and any income accruing to the trust or estate is taxable. The
      trustees or personal representatives of the deceased are responsible for


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                                                                                 INTRODUCTION – 15



       compliance. The profits and gains arising or accruing to a trustee from a
       trust estate or to a personal representative from the estate of a deceased
       person are subject to tax at the rate of 25%. Tax must be deducted at the
       rate of 25% from payments to beneficiaries out of the trust's estate,
       unless the Commissioner authorises the trustee(s) to make the payments
       gross after being satisfied that the beneficiary is not liable to file return
       under the provisions of the ITA (ITA, s.6(6)).
       25.       Every person liable to pay income tax in respect of any year
       of assessment is required to deliver a true and correct return of his/her
       income from every source. (ITA, s.67). The term ―liable to tax‖ is not
       defined in the ITA. The Government of Jamaica allots a unique nine-
       digit identification number known as a taxpayer registration number
       (TRN) to each individual taxpayer, business enterprise, organisation
       (non-profit, partnership, charity, etc.) by way of an automated system.
       For obtaining TRN, the taxpayers are required to submit various
       documents along with the application form. These documents contain
       useful information about the entity. TRN must be used when
       conducting business transactions with tax departments or government
       agencies. Penalties have been prescribed for non-registration.
       26.       Jamaica has indicated that the number of companies,
       partnerships, trusts and other entities registered for Taxpayer
       Registration Numbers (TRNs), available on TRN system on 19 May
       2010 were:
                           Organisation type                      Number of TRNs
              Companies                                                    38 460
              Partnerships                                                  7 877
              Non Profit Organisations                                      1 544
              Trust                                                            989
              Government                                                    2 093
              Statutory Bodies                                                  36
              Other                                                         2 359


       27.       Jamaica allows various tax incentives to qualifying foreign
       and local investors to facilitate industrial development, exploit and
       develop local resources, improve competitiveness of Jamaican
       international trade, promote economic growth and provide employment
       and economic development.




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16 – INTRODUCTION
      28.         The Jamaican Export Free Zones (EFZ) is a government
      initiative to encourage foreign investment. Businesses operating within
      these zones have no tax on their profits, duty exemption on imports and
      exports, and relaxed customs procedures. However, they must export
      85% of their produce outside of CARICOM. Created under the Jamaica
      Export Free Zones Act (EFZ) 1982, the zones are operated by the
      government. Benefits under the EFZ are granted only to companies
      incorporated or registered in Jamaica under the Companies Act. In
      addition, all transactions must be conducted in US currency. Jamaica
      has five free trade zones but companies outside of the zones can apply
      for Free Zone status as Single Entity Free Zones. The first free zone,
      Kingston Free Zone (KFZ), was created in 1976. The other major free
      zones are Montego Bay Free Zone (MBFZ), Garmex Free Zone, Hayes
      Free Zone, and Cazoumar Free Zone.
      29.        The International Finance Companies (Income Tax Relief)
      Act 1971 as amended provides the establishment of international
      finance companies whose income from prescribed financial operations
      is subject to reduced income taxation at the rate of 2.5%. A company
      incorporated in Jamaica or outside Jamaica qualifies to be an
      international finance company (IFC), if at least 95% of the issued share
      capital and voting power is held by non-residents. The dividends paid
      by an IFC to a non-resident are subject to withholding tax at a reduced
      rate of 2.5%. Payments to a non-resident of loan interest and royalties
      related to the prescribed financial operations may be made without the
      withholding of tax. Jamaica has stated that this law has been kept in
      abeyance and no approvals are being given to companies. Jamaica has
      recently deleted all information about IFCs from its websites.

Overview of commercial laws and other relevant factors for
exchange of information

      30.        The Minister of Finance is empowered to enter into
      arrangements with foreign territories under the provisions of the Income
      Tax Act for the purpose of relief from double taxation of income.
      Jamaica entered into its first Income Tax Treaty with United Kingdom
      in 1973. At present, Jamaica has bilateral tax treaties with 12 countries8
      and is also a party to the CARICOM income tax treaty, which is signed
      by 11 of the 15 CARICOM members9. Jamaica has also signed one

8
      Only 11 of these treaties have EOI provisions.
9
      The 15 members of CARICOM are: Antigua and Barbuda, Bahamas, Barbados,
      Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Suriname, Saint

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                                                                                 INTRODUCTION – 17



       Tax Information Exchange Agreement with the USA. In addition, it has
       signed an income tax treaty with the Netherlands Antilles in 2009
       which has EOI article providing exchange of information to the
       international standards. However this treaty is yet to come into force.
       31.       Section 9(d) of the Revenue Administration Act refers to
       safeguarding the interest of Jamaica in the negotiation of international
       taxation agreements. The Minister of Finance is the competent authority
       for the DTC/TIEA purpose in Jamaica. The role of the competent
       authority has been delegated by the Minister to the Director General of
       Tax Administration.
       32.       Jamaica has enacted the Mutual Assistance (Criminal
       Matters) Act 1995 (MACMA). This is the primary domestic legislation
       that guides Jamaica‘s mutual legal assistance to foreign countries. The
       MACMA allows Jamaica to facilitate overseas law enforcement
       agencies by assisting in investigations and proceedings in relation to
       criminal matters. Such assistance is available only to the criminal law
       enforcement authorities of the requesting country. Under the act the
       country requesting assistance from Jamaica should either be (a) a
       designated Commonwealth country or (b) a treaty country.

Recent developments

       33.        The Government of Jamaica issued a press release on 1
       October 2008 regarding establishment of a Jamaican International
       Financial Service Centre (IFSC). The IFSC is not yet established.
       However, the Global Forum on Transparency and Exchange of
       Information for Tax Purposes is monitoring this development;
       particularly the compliance with regard to the standards of transparency
       and exchange of information.
       34.       The Jamaican Tax Administration is now undergoing a
       reform process slated to end in 2013. Under this programme, the reform
       of tax legislation governing the collection, disclosure and exchange of
       tax information is an approved priority for the financial year 2010 -
       2011.




        Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, and Trinidad and
        Tobago.



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                            COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 19




                        Compliance with the Standards




A.        Availability of Information



Overview

       35.        Effective exchange of information requires the availability of
       reliable information. In particular, it requires information on the
       identity of owners and other stakeholders as well as information on the
       transactions carried out by entities and other organisational structures.
       Such information may be kept for tax, regulatory, commercial or other
       reasons. If such information is not kept or the information is not
       maintained for a reasonable period of time, a jurisdiction‘s competent
       authority may not be able to obtain and provide it when requested. This
       section of the report assesses the adequacy of Jamaica‘s legal and
       regulatory framework on availability of information.
       36.        In respect of identity and ownership information of
       companies, several commercial and regulatory laws require the
       availability of such information. The information is to be held and
       maintained with the companies themselves and with the Registrar of
       Companies. However, the Companies Act provides for the issue of
       ‗share warrants to bearer‘ which have some of the characteristics of
       bearer shares. These share warrants to bearer can be transferred any
       number of times without such transfers being recorded in the register of
       members. The information about ownership of such share warrants is
       neither required to be kept by the companies nor available with any
       government authority. This is not however a significant issue in
       Jamaica since the ability of companies to issue share warrants to bearer
       is in abeyance.
       37.        Information is not statutorily required to be maintained by a
       company and may also not be available with any other authority that
       identifies the persons in an ownership chain where a legal owner of a



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20 – COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION
       company acts on behalf of another person as a nominee or under similar
       arrangements, Beneficial ownership can nevertheless be investigated by
       the companies themselves, by the Minister as well as by tax authorities.
       38.        Companies incorporated outside Jamaica (foreign companies)
       are allowed to raise share capital and issue debentures in Jamaica.
       However, it is not mandatory for them to keep a branch register of their
       members who are resident in Jamaica. Foreign companies incorporated
       outside Jamaica but having central management and control in Jamaica
       are not required to provide the ownership information in Jamaica.
       39.        Jamaica has enforcement provisions in its law ensuring
       availability of information required to be kept under the relevant laws.
       40.      Jamaican law does not clearly require keeping of the
       underlying documents by all relevant entities.
       41.        Jamaica does not have provisions in the legislation requiring
       retention of the accounting records by all the persons or by the
       authorities. In absence of this requirement, the availability of records
       for five years cannot be guaranteed.

A.1.     Ownership and identity information

Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.


       Companies (ToR A.1.1) 10
       42.        In Jamaica, the Companies Act 2004 repealed and replaced
       the earlier Companies Act. Section 2 of the Companies Act 2004 defines
       the term ‗company‘ to mean a company formed and registered under
       the Companies Act 2004 or an existing company. Companies Act 2004,
       s.3 provides the mode of formation of a company. One or more persons
       may form a company by signing and sending articles of incorporation
       to the Registrar and complying with the requirements of the act in
       respect of registration. Jamaica recognises the sole member company.
       Section 4 establishes a company as a legal person.




10
       Terms of Reference to Monitor and Review Progress towards Transparency and
       Exchange of Information.


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                            COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 21



       Types of Companies
       43.       The Companies Act s.3 provides for the incorporation of the
       following type of companies:
           Company limited by shares – A company having the liability of its
            members limited by the articles to the amount, if any, unpaid on the
            shares respectively held by them;

           Company limited by guarantee – A company having the liability of its
            members limited by the articles to such amount as the members may
            respectively undertake to contribute to the assets of the company in the
            event of its being wound up. A company limited by guarantee might be
            incorporated with or without share capital;

           Unlimited Company – A company not having any limit on the liability of
            its members.

       44.      A company can also be classified as a private company or a
       public company. Section 25 defines a private company to mean a
       company which by its articles:
           restricts the right to transfer its shares and limits the number of its
            members to twenty other than the employee members;

           prohibits any invitation to the public to subscribe for any shares or
            debentures of the company;

           prohibits any invitation to the public to deposit money for fixed periods
            or payable on call whether bearing or not bearing interest; and

           subject to the exceptions provided for, prohibits any person other than the
            holder from having any interest in any of the company‘s shares.

       45.        Section 25 (6) states that a public company is a company that
       is not a private company.
       46.       In addition, Companies Act s.27A defines ‗Mutual Fund
       Company‘ and provides special rules for it. A mutual fund company is
       ―a company having a share capital and incorporated for the purpose of
       investing the moneys of its members for their mutual benefit‖. The
       company states in its articles that it is a mutual fund company, having
       the power to redeem or purchase for cancellation its shares without




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      reducing its authorised share capital and is registered under the
      Securities Act as a mutual fund.
      47.        An association formed as a limited company for promoting
      commerce, art, science, religion, charity or any other useful object and
      intends to apply its profits, if any, other income in promoting its objects
      and to prohibit the payments of any dividend to its members can be
      allowed by the Minister to be registered as a company with limited
      liability and such company is exempted from sending the list of
      members to the Registrar.
      48.       In the case of a company limited by a guarantee and not
      having a share capital, no person other than a member can have a right
      to participate in the divisible profits of the company unless such
      provision was in existence from the beginning (Companies Act s.20).

      Registration of companies
      49.       There are currently 63 272 companies registered in Jamaica.
      50.        Provisions relating to registration of companies are contained
      in s.11 to s.18 of the Companies Act. All companies incorporated in
      Jamaica (including, for example mutual fund companies) are required
      to register with the Registrar of Companies. Section 11 requires that the
      articles shall be delivered to the Registrar who shall retain and register
      them if the articles comply with the provisions of the Act. Section 13(2)
      requires the production of a statutory compliance declaration by an
      attorney-at-law engaged in the formation of the company, or by a
      person named in the articles as a director or secretary of the company,
      or by a person who is a member of the Institute of Chartered Secretaries
      and Administrators engaged in the formation of the company certifying
      the compliance with the requirements under the Companies Act. The
      articles must be signed by each subscriber to the articles.
      51.        Companies Act s.9 requires that in the case of an unlimited
      company or a company limited by guarantee the articles must state the
      number of members with which the company proposes to be registered
      and, if the company has the share capital, the amount of share capital
      with which the company proposes to be registered. There is no
      provision to provide names and addresses of the members, while
      registering the company. An increase in the number of members
      beyond the registered number by an unlimited company or a company
      limited by guarantee requires to be notified to the Registrar of
      Companies and he shall record the increase.




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       Ownership information on companies
       52.        Every company in Jamaica is required to keep a register of its
       members containing information about the names and addresses and the
       occupation of the members (Companies Act s.109). A company having
       share capital is also under obligation to keep a statement of the shares
       held by each member, distinguishing each share by its number, and the
       details of payments made. The date at which each person was entered in
       the register as a member and also the date at which any person ceased
       to be a member. The register of members is generally kept at the
       registered office of the company but in no case it can be kept at a place
       outside Jamaica.
       53.      The company registers a transfer of shares in or debentures of
       the company on the basis of receipt of a proper instrument of transfer
       and an entry of name of transferee is made in the register of members
       (s.75).
       54.       The register of members is available for members as well as
       public for inspection and copying, on payment of a fee (free to
       shareholders) (s.112). Similarly, a company which has issued
       debentures is required to keep a register of holders of debentures having
       various particulars including the name and addresses of the debenture
       holders (s.84) and this register of debenture holders is also available for
       public inspection (s.86).
       55.        Companies Act s.52 has a provision regarding submission of
       returns of additional allotments of shares to the registrar indicating
       among other things therein the names, addresses and description of the
       allottees and the amount, if any, paid or due and payable on each share.
       The copies of contracts are also required to be filed if shares are allotted
       as fully or partly paid up otherwise than in cash.
       56.       Companies Act s.121 puts an obligation on every company to
       file an annual return in the prescribed form set out in part II of fifth
       schedule. This requires a list of past and present members containing
       their names, addresses and occupations, number of shares held by them
       and also change in their shareholding since the date of last return. The
       information about the dates of registration of the transfers is also
       required in the form.
       57.       Companies Act s.25(1)(e) further provides that any person,
       other than the holder is prohibited from having any interest in any of
       the company‘s shares except as provided in twelfth schedule. The
       twelfth schedule deals with the exception in the situations of death and
       for family settlement, disability, bankruptcies etc., and accordingly in


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      case of private companies the legal owners would be the beneficial
      owners of shares.
      58.        Part X of the Companies Act contains provisions relating to
      companies incorporated outside the Island and carrying on business
      within the Island. This may include companies not incorporated in
      Jamaica but having its central management and control in Jamaica.
      These companies are required, within one month of establishment of
      the place of business, to deliver to the Registrar for registration a
      certified copy of the charter, statutes or articles of the company, or
      other instrument constituting or defining the constitution and containing
      the name of the company, names and address of the directors or
      shadow directors of the company and particulars as are required in the
      register of directors of the company and the name and address of the
      resident person for receiving the notice (s.363).The information on the
      shareholders/owners of the parent company is however not required to
      be provided.
      59.        Companies that have accounts with or carry out transactions
      through banks and financial institutions are required to provide the
      identity information to their bankers as per regulation 7 of the POCA
      (MLP) Regulations 2007 and s.IV of the Bank of Jamaica (BOJ)
      AML/CFT Guidance Notes. This information cannot be obtained
      directly from the banks or financial institutions by the competent
      authority for the purposes of exchanging information with foreign tax
      authorities under EOI arrangements, because s.17G of the Revenue
      Administration Act 1985 requires obtaining a production order from the
      court.
      60.       All persons doing business in Jamaica are required to obtain a
      Taxpayer Registration Number (TRN) from the TRN office in Kingston
      (s.17D of Revenue Administration Act 1985).
      61.       Overseas companies are also required to obtain TRN by filing
      the completed Application for ―Taxpayer Registration (Organizations)‖
      signed by an Authorised Officer or the local representative. Documents
      are required to be filed along with the application; however, no
      information about owners is required to be filed.
      62.        Domestic and foreign companies are taxable entities in
      Jamaica and are required to file annual tax returns. A body corporate
      subject to income tax is defined in the ITA to mean any body corporate,
      wherever resident, other than one whose entire income is by s.12 or any
      other enactment exempted or relieved from income tax. Tax returns are
      not required to contain any ownership information.



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       63.        Jamaica‘s International Finance Companies (Income Tax
       Relief) Act 1971 (IFC Act) as amended provides the establishment of
       international finance companies whose income from prescribed
       financial operations is subject to reduced income taxation. Section 8 of
       the IFC Act provides that Minister may make regulations for
       prescribing the records to be kept and the returns to be furnished by
       branches in Jamaica of approved companies. Section 9 of the IFC Act
       provide that other than the relief from liability to income tax under the
       principal act other provisions as are applicable to a company shall apply
       to an approved company. Jamaican authorities have submitted that the
       application of this act has been kept in abeyance and no approvals for
       benefits under IFC Act are being given.
       64.       In addition, tax incentives under various enactments like
       Export Industry Encouragement Act, Industrial Incentives Act, Motion
       Picture Industry Incentives Act, Hotel Incentives Act and Cottage
       Incentives Act are also being given in Jamaica. Jamaican authorities
       have clarified that the requirement for keeping ownership and
       accounting information with regard to companies obtaining benefits
       under these enactments and IFC are same as applicable to entities not
       receiving any benefits and tax audits are conducted by the Taxpayer
       Audit and Assessment Department, a division of the revenue
       department.

       Bearer shares (ToR A.1.2)
       65.        Jamaica does not allow for the issuance of bearer shares.
       There are, however, provisions for bearer share warrants, though this
       system is now in abeyance and, from 2004 the Companies Act has not
       allowed for the issuance of share warrants to bearer with respect to
       limited liability companies. A person holding a bearer share warrant
       which was issued before this system went into abeyance has a right to
       ordinary shares in the company but cannot vote at shareholders‘
       meetings and only has his/her details included in the company share
       register when the warrant is surrendered.
       66.        Section 103(1) of the Companies Act provides for registration
       of charges in a company, noting, inter alia, that the company must keep
       at its registered office a register of charges detailing all of the charges
       affecting the property of the company, giving in each case a short
       description of the property charged, the amount of the charge and,
       except in the case of securities to bearer, the names of the persons
       entitled thereto.




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      67.        For those share warrants to bearer which are still in existence,
      the identity of owners of these warrants is not required to be provided
      nor maintained by the company in the register of members. The
      information regarding the ownership of this type of share warrant will
      also not be available in the annual return. As a result, Jamaica does not
      have mechanisms which allow the owners of share warrants to bearer to
      be identified. As this system is now in abeyance, the assessment team is
      of the opinion that this issue is of limited importance.

      Nominee shareholder or similar arrangements
      68.        The terms of reference requires that jurisdictions should
      ensure that information is available to their competent authorities that
      identify the owners of companies and any bodies corporate. Owners
      include legal owners, and, in any case where a legal owner acts on
      behalf of another person as a nominee or under a similar arrangement,
      that other person, as well as persons in an ownership chain, to the
      extent that it is held by the jurisdiction‘s authorities or is within the
      possession or control of persons within the jurisdiction‘s territorial
      jurisdiction.
      69.       In Jamaican company law, the term ―nominee‖ has not been
      defined but has been used in the context of a nominee of a body
      corporate, including of a banking company and a finance company. It is
      also used in defining the holding and subsidiary company. Section 59 of
      the Securities Act provides for the investigation by the issuer from the
      shareholder, holding shares otherwise than as a beneficial owner to find
      out the beneficial owner and then confirming the holding from such
      owner. But, this enquiry by the issuer of shares is limited against the
      shareholders who have prescribed interest (10% of share capital) in the
      share capital.
      70.       In case of a public company, the Securities Act 1993 has
      given powers to the company to investigate the ultimate (real) owners
      of the shares. The relevant excerpt of s.59 is provided below:
      (3) Any issuer may by notice in writing require any member of the
      issuer to indicate in writing, within such reasonable time as is
      specified in the notice, whether any of the voting rights carried by any
      shares comprised in the relevant share capital of the issuer held by him
      are the subject of an agreement or arrangement under which another
      person is entitled to control his exercise of those rights and, if so, to
      give so far as it lies within his knowledge written particulars of the
      agreement or arrangement and the parties to it.



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        (4) Where an issuer is informed in pursuance of a notice given to my
        person under subs. (3) that any other person is a party to such
        agreement or arrangements is mentioned in subs. (3), the issuer may
        by notice in writing require that other person within such reasonable
        time as is specified in the notice to give, so far as it lies within his
        knowledge, written particulars of the agreement or arrangement and
        the parties to it.
       71.        The Companies Act also provides for the Minister, when
       there are good reasons to do so to appoint inspectors to investigate and
       report on the membership of a company for determining the true
       persons that are financially interested in the company or are able to
       control or materially influence the policy of the company (s.168). The
       Minister may also require such information directly from the persons
       whom he has reasonable cause to believe to be interested in the shares
       or debentures of the company or that acts or has acted in relation to
       those shares or debentures as the attorney or agent of someone
       interested therein, without appointing inspectors (s.169).
       72.        Jamaica has clarified that the law does not require disclosure
       of ultimate owners to any authority, where there is a chain of ownership
       in the company. Nonetheless, the beneficial ownership can be
       investigated where good reasons to do so exist. The Companies Act has
       given power to the Minister to appoint the inspector to investigate and
       report on the membership of any company and also for determining the
       true persons who are or have been financially interested in the success
       or failure of the company or able to control or materially influence the
       policy of the company (s.168). Jamaica has also intimated that no
       investigations have been carried out pursuant to s.168 of the Companies
       Act. The Minister is also empowered to investigate the ownership of
       any shares or debentures of a company by requiring the information
       from a person deemed to have interest in the shares or debentures.
       (s.169). In addition, financial institutions, subject to the Proceeds of
       Crime Act and the related Regulations of 2007 which provide for
       customer due diligence measures, are required to have the information
       regarding the identity of the individuals that ultimately control or own
       the corporate vehicle (see below).

       Regulated entities
       73.       The BOJ licenses and registers merchant or commercial
       banks, building societies, remittance companies and bureaux de change,
       while the Financial Services Commission (FSC) supervises and
       regulates the securities, insurance and private pensions industries. The


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      applicants desirous of carrying out the regulated activities are required
      to provide the necessary information for registration in the desired field
      of activities. A company11 is required to submit the listing of directors
      and their addresses, certificate of incorporation, list of shareholders and
      their shareholding, audited financial statements, tax compliance
      certificate and names and addresses of all persons beneficially owning
      10% or more in aggregate of the outstanding stock. Therefore, the
      ownership information with regard to the entities operating in the
      regulated fields would be available with the regulator.
      74.       The Proceeds of Crime (Money Laundering Prevention)
      Regulations of 2007 and related regulations provide for customer due
      diligence measures and further provide for verification procedures to be
      applied. The Revised 2007 BOJ Guidance notes (Guidance Note on the
      Detection and Prevention of Money Laundering and Terrorist
      Financing Activities) provides measures for the identification of
      prospective customers. The measures require the following information
      to be obtained for corporate vehicles, whether locally incorporated or a
      foreign company other bodies corporate or partnerships formed in
      Jamaica or overseas:
           certificate of Incorporation or certificate of registration;

           articles of Incorporation; or Partnership Deed;

           directors‘ resolution authorising company‘s management to engage
            in transactions;

           financial institutions mandate, signed application form, or an
            account opening authority containing specimen signatures;

           a financial statement of the business (audited, or in the case of
            companies incorporated and in operation for under eighteen
            months, in-house statements);

           a description of the customer's principal line of business and major
            suppliers (if applicable);

           list of names, addresses and nationalities of principal owners,
            directors, beneficiaries and management officers, including
            evidence of the identity of the natural persons, that is to say, the
            individuals that ultimately own or control the corporate vehicle;

11
         http://www.fscjamaica.org/content.php?action=content&id=83


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           group/corporate structure, where applicable.

       75.       When a corporate customer is a part of a group of companies,
       the financial institution is required to ensure that it is fully aware of the
       ultimate beneficial owners/controllers of the company and that it is
       aware of any group arrangements or affiliates that could present a
       reputation risk to the financial institution (Para. 52 of BOJ Guidance
       Note 2007).

       Ownership information held by service providers
       76.       Service providers including lawyers, accountants and agents
       providing services in relation to the formation of companies are not
       required to keep information on the ownership of the companies for
       which services are provided.

       Partnerships (ToR A.1.3)
       77.        The Partnership (Limited) Act 1853 is the statutory law
       relating to the formation and governance of the limited partnerships in
       Jamaica. In this type of partnership one or more partners, called general
       partners, have unlimited liability for partnership debts and other one or
       more partners have liability for those debts to the extent of the fund so
       subscribed by them or the capital they have subscribed. The general
       partners only have the authority to transact the business of the
       partnership and legal actions in respect of partnership business can be
       taken only against them. Limited partnerships are not allowed to carry
       on the business of banking or insurance.
       78.        A limited partnership can be established by two or more
       persons for carrying the business subject to the limitations and
       conditions of the act. The persons desiring to form the limited
       partnership as general partners are required to make and severally sign
       a certificate which also contains the information about the names of all
       the general partners and special partners, their place of residence and
       the amount of capital which each special partner has contributed to the
       common stock. The certificate also mentions the period at which the
       partnership is to commence and period at which it will terminate. The
       certificate is required to be filed with the Public Record Office. The
       partnership is considered to have been formed only after a certificate,
       probate and declaration is made, acknowledged, filed and recorded.
       79.      Modifications made to the limited partnership as regards the
       names of partners, nature of business or in the capital or shares etc. is


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      deemed to be dissolution of the partnership and such partnership then
      takes the form of a general partnership. Similarly, if a limited
      partnership is continued beyond the time originally fixed for its
      duration without re-registration it is deemed to be taken to be a general
      partnership. The Public Record Office must be kept informed by the
      general and special partners of the partnership‘s continued existence.
      The terms of the partnership must be published in the government
      gazette.
      80.        Jamaica does not have any statutory provisions governing the
      general (ordinary) partnerships, wherein all the partners have unlimited
      liability for the partnership debts. Such partnerships are governed by
      the common law and the partnership agreement. This ordinary
      partnership does not have a legal personality of its own.
      81.       The Registration of Business Names Act requires every firm
      having a place of business in Jamaica and carrying on business to
      register with the Registrar of Companies. This Act defines the ―firm‖ as
      an unincorporated body of two or more individuals, one or more of
      individuals and one or more corporations, or two or more corporations,
      who have entered in to partnership with one another with a view to
      carrying on business for profit, but shall not include any unincorporated
      company, which was in existence on the seventeenth day of June
      eighteen hundred and sixty four‖. Section 5 requires the name,
      surnames, nationality, the usual residence and the other business
      occupation (if any) of each of the individuals who are partners, and the
      corporate name and the registered office or principal office of every
      corporation which is a partner. Therefore according to this act,
      unlimited and limited partnerships having a place of business in
      Jamaica and carrying on a business will need to register with the
      Registrar of Companies and provide the aforementioned information,
      notably the names of the partners.
      82.       Every registration or renewal of registration remains valid for
      three years from the date of certificate of registration and requires to be
      renewed. Section 8 requires all the changes in the particulars of the firm
      to be intimated to the Registrar. Section 13 requires the registrar to
      issue a Certificate of Registration. Inspection of documents is allowed
      by the registrar. (s.18). Section 9 provides the punishment for firms or
      persons making default as to particulars.
      83.      Considering the provisions of the Registration of Business
      Names Act, the identity information of the partners of the partnership
      should be available with the Registrar of Companies. This information
      should also be available with regard to partnerships formed outside



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       Jamaica but having a place of business in Jamaica, as the requirement
       of registration is with regard to the place of business in Jamaica.
       84.       Jamaica‘s Stamp Duty Act 1937 also requires payment of
       stamp duty on all articles of co- partnership or other agreements to that
       effect. A copy of such agreement is stored at the Records Office,
       pursuant to sections 2 and 6 of the records Deeds, Wills and Patent Act.
       85.        It is possible to have a partnership in Jamaica with all non-
       resident partners. Sections 363(1) (b), 363 (3) and 365(1) (C) of the
       Companies Act require that foreign partnerships register using Form 31
       as a foreign company and included in that registration is a requirement
       for information on the name of the foreign firm in the country of origin,
       the names of all foreign directors and their addresses and also the
       address of the foreign firm in the country of origin. Jamaica has not
       clarified that whether all the partners of foreign firm will be considered
       as foreign directors or only some partners who are considered as
       working directors by the firm or the mangers. If the foreign firm has
       legal persons as partners, then who would be considered as working
       directors is also not clarified. Therefore, the information on all partners
       of foreign firm may not be available.

       Income tax law
       86.        Every person, including partnerships liable to pay tax, must
       register with the Registration Authority as required by s.17D of the
       Revenue Administration Act (RAA). The ITA does not define partner or
       partnership, however, s.69 provides the manner of taxation of income
       from a trade, profession or business carried on by two or more persons
       jointly. The partnership is not considered to be a separate taxable
       person, instead it is treated as a transparent entity through which
       partnership income flows to the partners and such share of income is
       included in the return of income of the partner. Section 69(2) sets forth
       an obligation on the precedent partner to make and deliver a return of
       income of the partnership. The income is required to be ascertained in
       accordance with the provisions of the ITA. The return shall contain the
       information about the names and addresses of the partners in the firm
       together with the amount of income allocated to the partners as per their
       respective shares. The ITA provides that when no partner is resident in
       Jamaica the return shall be made and delivered by the attorney, agent,
       manager or factor of the firm resident in the Island. The non-
       registration of the partnership or non-delivery of the tax return is an
       offence under the ITA (ITA s.69).




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      87.        Partnerships are required to file a return of income and tax
      payable in form IT 03. This form is prescribed for organisations
      (unincorporated bodies other than life assurance) and building societies,
      trust estates, industrial and provident societies, deceased estates also
      use this form. The form requires the following information on the
      partners/beneficiaries in case of partnerships and estates:
         taxpayer registration number;

         name;

         basis of distribution of partnership income (salary, interest on
          capital, good used, private use car, residential occupation, share of
          balance and total share); and

         share of estate or trust income.

      88.       The identity of partners is required to be kept by the Public
      Record Office under the Partnership (Limited) Act in case of limited
      partnership and for all the partnerships under the ITA by tax authorities
      in the form of return of income. The information of the partners is also
      available with the Registrar of Companies as per the requirements of
      the Registration of Business Names Act. The partners or any other
      persons including the service providers are not required by law to keep
      the ownership information. There is no provision under the law to
      disclose the ultimate owners of the companies who are partners in the
      partnership.

      Foreign partnerships
      89.       There is no specific regulation with regard to foreign
      partnerships.
      90.        The assessment team is of the view that under the common
      law it is not necessary to have a deed for the creation of partnership. It
      is also not necessary that all the partnerships obtain business
      registration number and TRN from Jamaican authorities. The Jamaican
      authorities have however indicated that any foreign partnership with
      substantial presence in Jamaica due to carrying on business or trade is
      taxable in Jamaica and is required to file a tax return, which contains
      details of the partners in the firm.




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       Trusts (ToR A.1.4)
       91.         Jamaica allows for the creation of trusts under its common
       law. However, it does not have specific laws which regulate the
       creation of trusts. The Trustee Act 1897 is in operation providing for the
       rights and responsibilities of the trustees. Powers and duties of trustees
       relate to appointment of new trustees, purchase and sale and various
       powers and liabilities of trustees. Powers of the court are with regard to
       the appointment of new trustees and vesting orders, relief for breach of
       trust and plea of statute of limitation. Section 10(6) provides for
       recording of new appointment in the record office, or in the office of
       the registrar of titles as to property registered under the registration of
       titles act of the Island.
       92.       The Trustees Act defines the trust as not including the duties
       incident to an estate conveyed by way of mortgage; but with this
       exception the expressions ―Trust‖ and ―Trustees‖ include implied and
       constructive trusts, and cases where the trustee has a beneficial interest
       in the trust property, and the duties incident to the office of personal
       representative of a deceased person.
       93.        Section 3 dealing with authorised investments indirectly
       refers to creation of trust by the instruments (if any), meaning that trusts
       in Jamaica may be non-statutory trusts, which are also referred as
       common law trusts. The trusts can be created by the instruments or
       orally. A common law trust relies on the rights of the trustees and such
       trusts possess the same rights, privileges and immunities as the trustees.
       94.       Section 4 of the Records of Deeds, Wills and Letters Patent
       Act 1681 provides that the records of any deeds executed and proved or
       acknowledged and enrolled in the Record Office will constitute
       conclusive evidence of the transaction or arrangement the deed refers
       to. The same applies to last will and testament.
       95.        The Record Office Act 1879 deals with the law relating to
       public records. A deed after recording in the record office becomes the
       registered deed. The record office maintains records and enrolments of
       registered deeds and writing in the form of records and registers. Rule 5
       of the Rule of Record Office requires the maintenance of an abstract
       book in the prescribed from, which includes information about the
       grantor (in the case of trusts the settlor) and grantee (trustee) of the
       deed. Section 33 of the Record Office Act provides that all persons may
       search, exam and take abstracts of the public records. Jamaica has
       advised that the record office has been recording deeds since 1660 and
       there are currently approximately three million recorded trust deeds



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      96.       Jamaica has stated that, the persons required to comply with
      revenue law are mandated to register all deeds; whether it is a deed of
      conveyance or otherwise. Pursuant to s.2-4 of the Stamp Duty Act and
      the attached Schedule and sections 2 and 6 of the Records, Wills and
      Patent Act, all deeds are required to be stamped and recorded at the
      Records Office.
      97.        Section 4 of the Registration of Business Names Act provides
      for the registration with Registrar of Companies by a nominee or trustee
      and reads as follows:
      Where a firm, individual, or corporation having place of business in
      Jamaica carries on the business wholly or mainly as nominee or
      trustee of or for another person, or other persons, or another
      corporation, or acts as general agent for any foreign firm, the first
      mentioned firm, individual, or corporation shall be registered in
      manner provided by this Act ,and ,in addition to the other particulars
      to be furnished and registered, there shall be furnished and registered
      the particulars mentioned in the schedule”. The schedule requires the
      additional particulars as the present Christian name and surname, any
      former name, nationality, and, if that nationality is not the nationality
      of origin, the nationality of origin, and usual residence or, as the case
      may be, the corporate name, of every person, or corporation on whose
      behalf the business is carried on: provided that if the business is
      carried on under any trust and any of the beneficiaries are a class of
      children or other persons, a description of the class shall be sufficient.
      98.        The above provisions indicate that is case of trust the full
      information on beneficiaries is not required to be given if the same are a
      class of children or other persons.
      99.        For registration under the business names act, the trusts are
      required to submit the trust deed which has information on the
      beneficiaries. A total of 999 trusts and 1 544 non-profit organisations
      have obtained tax registration numbers (TRN). The TRNs are used to
      register trust deeds for the purpose of tax administration. .
      100.       The trust not being a statutory entity, the information on
      trusts is not in the public record except as discussed above, and the
      details of the trust and the identities of those involved known to the
      settler and the trustees only. Jamaica was asked to clarify whether the
      information about all trusts created or administered in Jamaica would
      be available with Record Office. However, Jamaica‘s reply, is that the
      Record of Deeds, Wills and Patent Act requires that all deeds, patents,
      letters and wills should be recorded at the Island record office and any
      deed not so recorded is void. There are neither restrictions on nor


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       special provisions for the creation of trusts in Jamaica for non-resident
       settlor or beneficiaries. There is no restriction for a resident of Jamaica
       to act as trustee of a trust formed under foreign law and this situation is
       covered in the Registration of Business Names Act.

       Income tax law
       101.      The Revenue Administration Act 1985 requires the trusts to
       obtain a taxpayer registration number. The completed application form
       ‘Form 2‘ signed by a trustee and trust deed, TRN for each trustee and
       ID for signatory officer is required to be filed. All trusts, except
       approved charitable trusts, are required to file income tax returns. The
       approved charitable trusts are required to file their annual financial
       statements to the Taxpayer Audit and Assessment Department. This
       also applies to trusts having non-resident settlors or beneficiaries.
       102.      Any payments made by the trustee out of the trust‘s income
       to the beneficiaries is subject to a withholding tax, unless the
       Commissioner authorises the trustee(s) to make the payments gross,
       after being satisfied that the beneficiary concerned is not obliged to file
       a tax return (ITA s.6(6)). In the tax returns the information about the
       share of estate or trust income allocated to all the persons is required to
       be given.
       103.       Trusts created under foreign laws will also have to register
       for tax purposes and deliver a tax return, if those have any taxable
       income (ITA s.5) or statutory income (ITA s.6) This situation will arise
       in cases where either the trustee is a resident of Jamaica or the trust
       assets are invested in Jamaica or the trust assets are administered from
       Jamaica. Trustees are responsible for compliance with the ITA (s.55).
       104.      The Proceeds of Crime (Money Laundering Prevention)
       Regulations 2007 provides that the satisfactory identity is required to be
       maintained by the regulated entity with regard to settlor, legal owner or
       other person who exercises effective control of the legal arrangement
       and also the beneficial owner in the case of a transaction involving a
       settlement, trust or other type of legal arrangement.
       105.       Another type of arrangement is the unit trusts. This is an
       arrangement for collective investment in Jamaica or elsewhere in any
       property under a trust deed which enables the beneficiaries to
       participate in the profits or income of the property. It is governed by the
       Unit Trusts Act 1970. These trusts are regulated entities under POCA
       2007, by the Financial Services Commission and ownership and




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      identity information on the units of trusts is required to be kept by such
      trusts.
      106.        In cases of trusts also, the assessment team is of the view that
      it is not necessary that all the Trusts obtain business registration number
      and TRN from Jamaican authorities. The Jamaican authorities have
      only stated that information will be available with regard to Trusts
      doing business with Revenue and they have not categorically asserted
      that all the Trusts are required to obtain such numbers/ registration.

      Foundations (ToR A.1.5)
      107.      Jamaica does not have specific provisions for the creation of
      foundations; however Jamaica has submitted that a foundation can be
      created in the form of a company limited by guarantee. It has further
      explained that the provisions of Companies Act, Income Tax Act and
      Securities Act apply to foundations as those that apply to companies.

      Enforcement provisions to ensure availability of information
      (ToR A.1.6)
      108.      Companies including its officers are subject to fines under the
      Companies Act for failure to maintain documentation required by the
      Act. For the defaults relating to register of members, the company and
      every officer of the company who is in default is liable to a fine up to
      JMD 50 000 (i.e. about EUR 500) (s.109 §4). Every company is obliged
      to deliver annual return to the registrar of companies and default to
      deliver the return as required leads to a penalty of JMD 100 (EUR 1)
      for each day of default continues, but maximum penalty is limited to
      JMD 10 000 (s.121).
      109.       Penalties for non-registration under the Revenue
      Administration Act may be levied to taxpayers, who without reasonable
      cause or lawful excuse neglects or fail to apply for registration or
      neglects or fail to furnish the information required for registration. The
      person is liable on summary conviction before a Resident Magistrate to
      a fine not exceeding JMD 1000 in the case of an individual or JMD
      5000 in the case of any other person and in default of payment of such
      fine to imprisonment for a term not exceeding 30 days (s.17D(8))
      110.       A wilful failure to deliver a true and correct return of the
      income and comply with the other provisions of s.67 of the ITA makes
      the person guilty of an offence (ITA s.67(8)) Any person who refuses
      fails or neglects to deliver any return of the partnership shall be guilty
      of an offence (ITA s.69(3))


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       111.       Section 100 of ITA provides that any person guilty of an
       offence against ITA for which no specific penalty is provided shall be
       liable on summary conviction before a resident Magistrate to a fine not
       exceeding JMD 10 000 (EUR 100) and in default of payment to
       imprisonment with or without hard labour for a term not exceeding 12
       months.
       112.       Section 8 of the Registration of Business Names Act requires
       that any change in particulars need to be sent to the Registrar and any
       default shall be liable on summary conviction before a resident
       Magistrate to a fine up to JMD 200 for each day of the default and the
       default of in the payment of the fine may result into imprisonment with
       or without labour for a term up to 3 months.
       113.      Non-compliance by a regulated entity with the financial
       regulations, such as regulations under POCA, could result in the
       suspension or revocation of the licence.
       114.       The effectiveness of the enforcement provisions which are in
       place in Jamaica will be considered as part of the Phase 2 review.

       Determination and factors underlying recommendations
                                          Determination
The element is in place, but certain aspects of the legal implementation of the
element need improvement
Factors underlying recommendations                  Recommendations
Information is not required to be                   Jamaica should establish a requirement
maintained by a company nor is it                   that information is maintained indicating
otherwise available to the competent                the person on whose behalf any legal
authority that identifies the persons in an         owner holds his interest or shares in the
ownership chain where a legal owner of a            company or body corporate. This could,
company acts on behalf of other person as           for example be achieved by way of
a nominee or under similar arrangement.             requirements on companies and bodies
                                                    corporate themselves, or alternatively via
                                                    the information submitted to the Registrar
                                                    of Companies.
While share warrants to bearer are no               Jamaica should take necessary measures
longer issued in Jamaica, there are                 to ensure that robust mechanisms are in
insufficient mechanisms in place that               place to identify the owners of these share
ensure the availability of information              warrants to bearer.
allowing for identification of the owners of
existing share warrants to bearer.
Companies incorporated outside of                   As Jamaica asserts a sufficient nexus for
Jamaica but having their central                    taxing jurisdiction on a management and



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                                      Determination
The element is in place, but certain aspects of the legal implementation of the
element need improvement
Factors underlying recommendations              Recommendations
management and control in Jamaica are           control basis, it should require submission
not required to provide information             of information on its owners when foreign
identifying their owners as a part of           companies register or when they apply for
registration requirements and foreign           their tax file number and Jamaica should
companies       are   not     required  to      take necessary steps to require foreign
compulsorily keep a share register in           companies to keep register of Jamaican
Jamaica. Therefore, the information that        shareholders in Jamaica.
identifies the owners of foreign companies
is not available.



A.2.     Accounting records

Jurisdictions should ensure that reliable accounting records are kept for all relevant
entities and arrangements.


       General requirements (ToR A.2.1)
       115.       The Companies Act (s.144) requires every company to keep
       proper books and documents of account to give a true and fair view of
       the state of the company‘s affairs and to explain its transactions. These
       books and documents of account are with respect to all sums of money
       received and expended by the company, matters in respect of which the
       receipt and expenditure takes place, all sales and purchase of goods by
       the company and the assets and liabilities of the company. The books
       and documents of account are required to be at all times open to
       inspection by the directors. The failure of a director to take all
       reasonable steps to secure compliance by the company resulting in a
       default by the company makes such director liable on summary
       conviction before a Resident Magistrate to imprisonment with or
       without hard labour for a term not exceeding six months or to a fine not
       exceeding fifty thousand dollars. However, the Minister may, according
       to the nature and volume of the business carried out by the company in
       Jamaica, issue an order grant that exempts the company from keeping
       proper books and documents of account (s.144(4)).
       116.      Section 144 of the Companies Act refers to the maintenance
       of books of accounts by the company, as are necessary to exhibit and
       explain the transactions and financial position of the trade or business
       of the company including books containing entries from day to day in


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       sufficient details of all cash received and cash paid and goods sold and
       purchased showing the goods and the buyers and sellers in sufficient
       detail to enable these goods and their buyers and sellers to be identified.
       117.      The profit and loss account and balance sheet of the company
       is required to be presented before the company at the annual general
       meeting by the directors of the company (s.145). Furthermore, if the
       company is registered on the Jamaica Stock Exchange, its balance sheet
       must be published at the end of each financial year. The director of the
       company is liable for the penalties as in the case of the offence of not
       maintaining the proper accounts and not complying with the provisions
       presenting the profit and loss account and balance sheet before the
       company in the general meeting.
       118.       All public companies are required to file accounts annually to
       the Registrar of Companies. This requirement also applies to private
       companies wherein a body corporate is shareholder. These accounts are
       in the form of the balance sheet and profit and loss account including
       all the documents required by law to be annexed thereto and a copy of a
       report of the auditor (s.124).
       119.       Section 18 of the Banking Act 1992 requires every local bank
       and foreign bank to submit an audited balance sheet and profit and loss
       account in respect of all businesses transacted by the bank in the
       financial year and auditor‘s report to the Bank of Jamaica. The accounts
       are required to be prepared in accordance with the generally accepted
       accounting principles as set out in the Handbook of the Institute of
       Chartered Accountants of Jamaica. The bank is also subject to the
       statutory publication requirements.
       120.        A company incorporated outside the Island and carrying on
       business within the Island is required to prepare a balance sheet and
       profit and loss account containing the particulars and documents,
       similar to, as are required by a company incorporated in the island and
       it is also required to deliver a copy of these documents to the Registrar
       of companies for registration (s.366).
       121.       Section 89 of the ITA also requires every person to keep
       proper books of accounts sufficient to record all transactions necessary
       to ascertain gains or loss. Domestic and foreign companies carrying on
       business in Jamaica are required to keep their accounting records in
       Jamaica and required at all times to have these open to inspection by
       the directors. Exemption from keeping the records in Jamaica can be
       authorised by an order of the Minister (s.144 (4)).




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      122.      Private companies are subject to limited filing requirements
      with the Registrar of Companies (s.124(3)). However, as mentioned
      previously if a body corporate holds shares in the private company then
      the exemption in this regard is not available.
      123.       The Partnership (Limited) Act and Trustees Act impose no
      record keeping requirements on partnerships or trusts. However, s.89 of
      the ITA imposes a compulsory requirement on every person engaged in
      any trade, profession or business to keep proper books of account
      sufficient to record all transactions necessary to ascertain the gains and
      profits or loss incurred. The books of account should exhibit or explain
      his transactions and financial position. In absence of proper books of
      account, the Commissioner is empowered to assess the tax according to
      the best of his judgement. Failures to comply with the provisions also
      attract various penalties. As a result, taxpayers keep proper books of
      account and records.
      124.       Similarly, entities operating in the Jamaica Export Free Zones
      have to be companies incorporated in Jamaica. Section 46 of the
      Jamaica Export Free Zones Act provides for the sanctions as per s.99 of
      the ITA with regard to filing of false statements, false returns and for
      keeping false accounts. Therefore, though these companies are not
      liable to pay tax, these are required to maintain accounts.

      Underlying documentation (ToR A.2.2)
      125.      The Companies Act does not specifically provide for the
      maintaining of underlying documents. The only reference to the
      underlying records is found in s.157 which requires that the auditor
      shall have access to the books and accounts and vouchers of the
      company.
      126.      Neither the Partnership Act nor the Trustee Act includes any
      requirements to keep accounting records or underlying records.
      However, s.89 ITA (discussed above) provides that, ―a person shall be
      deemed not to have kept proper books of account if he has not kept
      such books or accounts as are necessary to exhibit or explain his
      transactions and financial position in his trade or business, including a
      book or books containing entries from day to day in sufficient details of
      all cash received and cash paid, and, where the trade or business has
      involved dealings in goods, statements of annual stocktakings, and
      accounts of all goods sold and purchased‖. This provision imposes the
      requirement of maintaining accounts to substantiate the transactions but
      does not clearly refer to include the underlying documentation.



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       5-year retention standard (ToR A.2.3)
       127.     Neither the Companies Act nor the Partnership (Limited) Act
       nor the Trustee Act prescribes a time period for the retention of
       documents.
       128.       For the retention of records in case of dissolution of
       companies, s.330(3) states that the Court may decide on the period of
       time in which the books and papers of the company cannot be destroyed
       (in any case not exceeding five years from the dissolution of the
       company). However, Jamaica has not reported making of any rules in
       this regard and has responded that currently there are no such rules. In
       practice, according to the information provided by Jamaica, documents
       are held at least 20 years pursuant to s.338(1)(b) of the Companies Act.
       Jamaica has further stated that review is currently underway aiming at
       adoption of proper retention of information/documents policy.
       129.      Jamaica has asserted that ―Accounting records are required to
       be kept for six years in keeping with the limitation period set out in the
       Limitation of Actions Act.
       130.       Section 51 of the Limitation of Actions Act 1881 deals with
       the limitations of actions for ‗merchants‘ accounts with respect to the
       trade of merchandise between merchants to a period of six years after
       the cause of such actions. This provision merely deals with the
       limitations with regard to making merchants claim and it would be in
       the interest for concerned merchants to maintain related documentation
       for a period of six years to substantiate the claims. But, this is not a
       requirement under the law and if a merchant does not maintain the
       records it might lose the claims.
       131.       In addition, s.21(3) of the Tax Collection Act 1867 provides a
       limitation of seven years for the collection of taxes from a person. This
       means that the revenue department may conduct audits of taxpayers
       within seven years of the date at which collection of taxes was due.
       Therefore, it is in the interests of Jamaican taxpayers to maintain related
       documentation for a period of seven years. But the fact remains that
       there is no legal requirement to retain accounting records by the
       persons.
       132.      Where the company is dissolved, the information held by the
       government entities is kept for the required period and then stored at the
       government archives for up to 20 years pursuant to the Financial
       Administration and Audit Act 1959.
       133.     The Bank of Jamaica, as per s.34A of the Bank of Jamaica
       Act 1960, has power of supervision and periodical examination of all


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       commercial banks and financial institutions. The regulated entities
       under the supervision and control of the BOJ and Financial Services
       Commission are required to maintain the record of their customer
       transactions for at least five years in view of the anti-money laundering
       provisions.
       134.     On the basis of above, the assessment team determines that
       Jamaican law does not expressly provide for the retention of the
       accounting records for five years, except by the entities regulated by the
       anti-money laundering laws.

       Determination and factors underlying recommendations
Determination
The element is in place, but certain aspects of the legal implementation of the
element need improvement
Factors underlying recommendations               Recommendations
There is no clear requirement that relevant      Relevant legislation for each type of entity
entities and arrangements keep underlying        and arrangement should provide for the
documentation.                                   obligation     to      keep      underlying
                                                 documentation.     Jamaica     could,    for
                                                 example, ensure the maintaining of records
                                                 and underlying documents by prescribing
                                                 tax audits of persons having a turnover in
                                                 excess a threshold amount.
The Jamaican company and tax laws does           The relevant laws should be amended to
not prescribe a compulsory retention             specify the retention period of at least five
period for records, other than for financial     years in respect of accounting records for
institutions and other entities regulated        all the entities.
under anti-money laundering legislation.


A.3.     Banking information

Banking information should be available for all account-holders.


       135.      Regulation 7 of the POCA (MLP) Regulations 2007
       establishes minimum customer due diligence requirements and defines
       ―customer information‖ as including the applicant for business‘s full
       name, current address, tax payer registration number, date and place of
       birth (in the case of natural person) and, where applicable, the
       information referred to in regulation 13(1) (c) (i.e. identity of the
       beneficial owner).



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       136.      Section IV of the BOJ AML/CFT Guidance Notes requires
       every bank /financial institution to obtain the information from all
       prospective customers about their identification. This information
       comprises the true name and names used, permanent address, including
       postal address, date of birth, nationality, sources of funds, contact
       numbers and tax payer registration number. The POCA (MLP)
       Regulations 2007 also require the periodic updates of customer
       information at least once every five years. This requirement is also
       applicable to the existing client base of the financial institutions.
       137.       Regulation 16 of the POCA (MLP) Regulations 2007
       specifically prohibits financial institutions from maintaining
       anonymous, fictitious or numbered accounts. Paragraph 93 of the BOJ
       AML/CFT Guidance Notes also prohibits the maintaining of such
       accounts.
       138.      Regulations 11 to 13 of the POCA (MLP) Regulations 2007
       requires procedures to be in place to ensure that the identities of both
       principals and agents are obtained, and that the authorisations of agents
       are obtained in the case of transactions being conducted by a person on
       behalf of another.
       139.       Regulation 13C of the POCA (MLP) Regulations 2007
       stipulates that measures are satisfactory where in the case of any
       transaction involving settlements, trusts or other types of legal
       arrangements, the identity of the settler, legal owner or other person
       who exercises effective control of the legal arrangement as the case
       may require, or the beneficial owner, is established. Supporting this,
       paragraphs 73 and 74 of the BOJ (AML/CFT) Guidance Notes
       specifically require the due diligence measures in relation to legal
       arrangements include identification of all parties and beneficiaries
       concerned, the source of funds and the source of wealth and trust
       arrangements.
       140.       The BOJ AML/CFT Guidance Notes also requires financial
       institutions to ensure that the due diligence checks and reviews and
       investigations are available to the competent authority and designated
       authorities under the anti money laundering laws.
       141.      POCA (MLP) Regulations 2007 provides for maintenance
       and retention of the records of transactions between the banks and the
       customers by the banks, the banks are also required to maintain
       transaction records relating to walk-in customers.




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      Record-keeping requirements (ToR A.3.1)
      142.      The supervisory authorities under the POCA are Bank of
      Jamaica and Financial Services Commission. POCA is applicable to
      financial institutions and designated non-financial institution (as
      designated by the Minister), including:
           a bank licensed under the Banking Act;

           a financial institution licensed under the Financial Institutions Act;

           a building society registered under the Building Societies Act;

           a society registered under the Co-operative Societies Act;

           a person who—

          (i) engages in insurance business within the meaning of the Insurance
          Act;
          (ii) performs services as an insurance intermediary within the
          meaning of the Insurance Act, but does not include an insurance
          consultant or an adjuster;
           a person licensed under the Bank of Jamaica Act to operate an
            exchange bureau;

           a person licensed under the Securities Act as a dealer or investment
            adviser;

           approved money transfer and remittance agents and agencies as
            defined by s.2 of the Bank of Jamaica Act;

           any other person declared by the Minister responsible for national
            security, by order subject to affirmative resolution, to be a financial
            institution for the purposes of the POCA.

      143.      The Caribbean Financial Action Task Force (CFATF) report
      of 200512 analysed Jamaica‘s compliance with the international
      AML/CFT standards. That report mentioned that, certain financial
      businesses are excluded from the application of AML/CFT regime; for
      example, money lenders, pawnshops and insurance brokers. The
12
         http://www.cfatf-gafic.org/downloadables/mer/
             Jamaica_3rd_Round_MER_(Final)_English.pdf


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       Jamaican authorities had indicated that while there was a move to bring
       the moneylenders and insurance brokers‘ under the ambit of the
       AML/CFT regime; pawnshops are very limited in number and did not
       constitute a major area of risk. It is observed that POCA provisions
       cover the insurance companies and insurance intermediaries. Also,
       money lenders and pawnshops do not hold accounts for their customers.
       144.       CFATF‘s follow up report13 (6 March 2009) on Jamaica
       mentions that the POCA (MLP) Regulations 2007 require keeping the
       identification and transactions records for a period of five years after
       the transaction. The report does not refer to any adverse findings in this
       regard.
       145.     Regulation 14 of the Money Laundering Prevention
       Regulation 2007 provides that records be kept for a ―period of five
       years commencing with the date on which the relevant financial
       Business was completed or the business relationship was terminated
       whichever occurs later‖.
       146.     Further, Regulation 16 of the POCA (MLP) Regulations 2007
       mandates the retention of both identification records and transaction
       records by financial institutions for the prescribed period of 5 years
       commencing from the date on which the relevant financial business was
       completed or the business relationship terminated whichever is later.
       147.       Supporting these regulations, the BOJ has issued the
       AML/CFT Guidance Note in 2004 (revised in 2007) and Section IV.D
       of this note deals with record keeping requirements and its important
       features are:
            financial institutions should maintain records of client
             identification and transactions performed. This should include the
             minimum five year retention period from the termination of the
             business relationship;

            records relating to transactions carried out by each customer must
             be maintained for at least five years after the transaction has been
             completed.

       148.      The customer information has broad definition under POCA
       and the regulated financial institutions are required to maintain the
       customer information.

13
          http://www.cfatf-gafic.org/downloadables/Jamaica_1st_Follow-
              Up_Report_(Final)_English.pdf



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      Determination and factors underlying recommendations
                                      Determination
The element is in place




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B.        Access to Information


Overview

       149.       A variety of information may be needed in a tax enquiry and
       jurisdictions should have the authority to obtain all such information.
       This includes information held by banks and other financial institutions
       as well as information concerning the ownership of companies or the
       identity of interest holders in other persons or entities, such as
       partnerships and trusts, as well as accounting information in respect of
       all such entities. This section of the report examines whether Jamaica‘s
       legal and regulatory framework gives the authorities access powers that
       cover the right types of persons and information and whether rights and
       safeguards would be compatible with effective exchange of
       information.
       150.       The ITA provides that the Minister may issue rules for the
       carrying out of provisions in agreements made with other States as
       appear necessary or expedient to the Minister in consequence of such
       arrangement. However, Jamaica has not enacted any specific rules or
       regulations for the carrying out the provisions with respect to the
       exchange of information contained in agreements with treaty States.
       The legal basis for providing the necessary access and powers to the
       competent authorities is that which is available under its domestic laws.
       The report identifies potentially significant deficiencies in the Jamaican
       authorities‘ powers to obtain information for the exchange of
       information purposes. The most significant of these deficiencies is that
       the tax authorities can only obtain information where the taxpayer is
       under examination in Jamaica. That is, an audit must be commenced in
       order to gather information to respond to an international request for
       information. For example, if a treaty partner wishes to obtain
       information about a bank account of its taxpayer in Jamaica, the
       Jamaican competent authority would be able to obtain information from
       bank only if two conditions are met namely; the person should be a
       taxpayer in Jamaica and tax proceedings should be in progress. In
       absence of a pending tax examination, the domestic laws do not grant
       competent authorities the power to obtain information.


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      151.      The tax authorities are required to request the information
      from the taxpayer prior to seeking the production order from the court.
      The taxpayer rights are duly protected through the judicial proceedings
      though the laws specifically do not lay down the clear rules,
      corresponding to the standards, providing for the safeguards to the
      taxpayer and third parties.


B.1. Competent Authority’s ability to obtain and provide
information

Competent authorities should have the power to obtain and provide information that is
the subject of a request under an exchange of information arrangement from any person
within their territorial jurisdiction who is in possession or control of such information
(irrespective of any legal obligation on such person to maintain the secrecy of the
information).


      152.       Section 83 of the ITA provides the power to the Minister to
      make orders declaring arrangements with other territories for the
      purpose of relief from double taxation. The Minister of Finance is the
      competent authority for the DTC/TIEA purpose in Jamaica. The role of
      the competent authority has been delegated by the Minister to the
      Director General of Tax Administration. The competent authority does
      not have any power to obtain the information directly from the taxpayer
      or a third person. The competent authority, when requested by the
      foreign counterpart, obtains the information through the field
      authorities, which have powers under the Income Tax Act 1955 and the
      Revenue Administration Act 1985.
      153.       Section 17F of the Revenue Administration Act (RAA)
      provides for disclosure of information among authorities within the
      various departments of revenue. The obligations as to secrecy or other
      restrictions upon the disclosure of information imposed by any law will
      not prevent such disclosure of information. The information obtained
      can also be disclosed for the purpose of any proceedings connected
      with a matter in relation to which the Commissioner or the other officer
      performs his duties. These specific provisions and other provisions
      specified in s.83 of the ITA allow the competent authority to seek
      required information from the Commissioners.
      154.       The tax authorities have powers under the Revenue
      Administration Act and the Income Tax Act to obtain information. The
      RAA provides powers relating to obtaining information from third
      parties, inspection, verification and search and seizure. The powers
      under the RAA may only be exercised when the person about whom

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       information is sought is under examination by the tax authorities in
       Jamaica. The provision is used where the information is being sought
       from specified bodies such as banks, building societies or other
       financial institutions and the Commissioner must proceed by court
       order.
       155.        Section 70(1) of the ITA provides as follows:
         Every person, whether he is or is not liable to pay income tax, upon
         whom the Commissioner of Inland Revenue may cause a notice to be
         served requiring him to make and deliver a return of his income or
         the income of any person, shall, within fifteen days after the date of
         the service of such notice, make and deliver to the Commissioner of
         Inland Revenue a return as aforesaid.
       156.      The Commissioner may therefore use this provision, in cases
       falling outside the scope of the RAA, to seek information about the
       income of any person. That person does not have to be under
       examination by the tax authorities.
       157.      The Jamaican authorities acknowledge that there is some
       conflict between both provisions and that there is a need to rationalise
       the provisions so as to provide for the widest possible information
       gathering powers.

       Information from government authorities
       158.      The Commissioner of Inland Revenue can seek information
       from any public officer for the purposes of the Income Tax Act. It is the
       duty of the public officer to furnish information which may be in his
       possession or which he may be able to procure.
       159.      The Postal Corporation of Jamaica carries out certain types of
       services as an agent. These include bill payments, sale of lottery tickets
       and acting as collection agent for a micro-lending agency (a subsidiary
       of a supervised deposit taking entity). Information relating to these
       transactions would be available through the principal operators who are
       incorporated under the Companies law and who are subject to income
       taxes. In the case of the micro-loans operations, these would also be
       subject to the jurisdiction of the Supervisor of Banks (under
       consolidated supervision powers).
       160.      The Postal Corporation has indicated its intention to offer
       remittance services. To do so would require licensing under the Bank of
       Jamaica Act. If this occurs, the Postal Corporation would be subject to




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      supervision by the Bank of Jamaica and talso be subject to AML/CFT
      statutory obligations.
      161.      Under the Income Tax Act, information relating to postal
      revenue is not available directly to the Commissioner of Inland
      Revenue. However, postal workers are deemed to by the Postal Act to
      be customs officers for the purpose of receipt of postal articles. All
      information regarding articles imported through the post office and the
      customs duties payable would be available to the Commissioner of
      Customs.

      Powers under the Income Tax Act
      162.       Section 70 of the ITA empowers the Commissioner of Inland
      Revenue to issue a notice on any person, whether he is or not liable to
      pay income tax, to require such person to deliver the return of income,
      require their attendance and to give evidence with respect to his income
      and to provide copies of accounts including balance sheets relating to
      trade, profession or vocation and audit report, if any, and make
      inspection of books, accounts and documents containing information
      about the transactions. Under these provisions, the Commissioner‗s
      powers can only be exercised when conducting enquiries with regard to
      income of the taxpayer, whether he is liable to pay tax or not.
      163.      For the purpose of the assessment of a taxpayer who has been
      issued the assessment notice and has disputed the assessment and the
      Commissioner has received the notice of objection, the Commissioner
      under s.75(5) of the ITA may by notice summon any person to give
      evidence respecting the objected assessment to attend before him and
      may examine such person under oath or otherwise.
      164.       The Commissioner also has powers under s.91 of the ITA in
      connection with the filed tax return or for making the assessment.
      Under this section the Commissioner has same powers as available to
      him under s.75(5) of the ITA discussed above. These powers are
      available to the Commissioner for the following purposes:
         to verify the correctness of any return, statement, declaration, or
          particulars delivered under the ITA;

         for obtaining information required for the issue of notice under
          s.66(3) – a notice issued for failure to declare estimated income
          tax; and

         for making assessment under s.72(3) of the ITA.


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       165.      Related to this is s.91(2) of the ITA, which empowers the
       Commissioner to authorise any person for the purpose of verifying the
       correctness of any return, statement, declaration or particulars delivered
       under the ITA to enter upon any premises of the taxpayer between
       hours of nine in the morning and nine at night and inspect and make
       copies of any books, documents, or other material relating to return,
       statement, declaration.
       166.      In accordance with the ITA, the competent authorities may
       only exercise their enquiry, investigation, verification and inspection
       powers in the conduct of an assessment, examination or when dealing
       with an objection to a tax assessment.

       Powers under the Revenue Administration Act (RAA)
       167.       Information may also be obtained by the Commissioner on
       the basis of the powers under the Revenue Administration Act. The
       procedure to obtain information from third parties such as banks and
       other financial institutions is provided for under s.17G RAA. However,
       the law provides that the information first has to be requested from the
       taxpayer. Where the taxpayer does not co-operate, the Commissioner
       may apply to a Judge in Chambers for a production order to compel the
       third party to produce the requested information. Such an order can be
       requested in relation to the person suspected of having possession or
       control of the information, document or record which is relevant to the
       duties of the Commissioner in relation to making an assessment in
       relation to a taxpayer under any relevant law, making an investigation
       into any case involving tax evasion or for the prevention of fraud on the
       revenue, determining the tax liability of a taxpayer under a relevant law
       or collecting outstanding tax due. Such an order can be used to obtain
       information from:
           a bank licensed under the Banking Act;

           a financial institution licensed under the Financial Institutions Act;

           a person licensed under the Public Accountancy Act;

           a building society registered under the Building Societies Act;

           a society registered under the Cooperative Societies Act or the
            industrial and provident Societies Act;




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         a person who is or has been a party to any business transaction with
          the taxpayer in question.

      168.       A Judge in chambers may issue a production order after
      satisfaction that the Commissioner concerned has requested the
      information, document or record from the taxpayer without success and
      in all the circumstances of the case, there are reasonable grounds for
      making the order. The production order overrides the secrecy
      obligations imposed on the person relating to disclosure of information
      under any other acts.
      169.       The RAA defines the taxpayer as ―includes any person whose
      liability to make payment of revenue to a revenue department is in
      question whether or not , in the event, the payment is waived or
      remitted or no amount is found to be payable‖. In the RAA the revenue
      department means, the Customs Department, the Inland Revenue
      Department, the Land Valuation Department, the Revenue Protection
      Department, the Tax Administration Services Department, the Tax
      Payer Appeals Department and the Taxpayer Audit and Assessment
      Department. The scope of responsibilities of Commissioners working in
      these departments is also prescribed in the RAA.
      170.      For the purpose of enforcement of tax collection, the
      Commissioner has powers to make enquiries, inspect documents and
      search premises. Section 17I of the RAA provides that the
      Commissioner or authorised person for the purpose of exercising any
      power under a relevant law may enter during office hours the business
      premises of a taxpayer for carrying out the audit or examination of any
      accounts, books, records or any other documents relating to that
      business or inspect any property or goods described in the inventory.
      The person responsible for the operation of the business is required to
      permit the Commissioner or authorised person to make copies of or
      take extracts from the documents or record. Therefore, these powers
      can be used in case of a taxpayer only.
      171.      Section 17J of the RAA provides for the issue of a search
      warrant by the Judge of the Revenue Court authorising the
      Commissioner or authorised person named in the warrant to enter and
      search the specified premises. The search warrant can be issued by the
      judge on being satisfied on the basis of information under oath by a
      Commissioner indicating the necessity for search on the grounds
      indicated in the section. The warrant empowers the authorised person to
      make copies of books/documents and also detain and remove the
      documents for the purpose of making the copies, but the period of
      detention does not exceed seven days. The authorised person can take


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       inventory of any money, jewellery, bullion, stocks or other valuables
       found at the premises. The reasonable grounds for forming the
       satisfaction are:
           fraud has been committed by a taxpayer and evidence of such fraud
            is to be found on the premises specified in the information; or

           a taxpayer has failed to comply with any requirement of a relevant
            law relating to the furnishing of information or the production of
            any documents or records; and the payment of any tax which that
            taxpayer is liable to pay under that law; and any notice served on
            that taxpayer by the Commissioner or any requirement made by the
            Commissioner in relation to the furnishing of information, the
            production of documents or records or the payment of tax.

       172.       The assessment team has analysed the powers available to the
       tax authorities under the ITA as well as the RAA in connection with
       obtaining information, and is of the view that the powers under the
       RAA can be used in connection with the continuing tax examination in
       case of a taxpayer in Jamaica. However, the powers available under the
       ITA are wide and may be used against any taxpayer in Jamaica without
       need for an examination to be conducted.
       173.       However, the problem lies on the question, whether the duties
       of the Commissioner with regard to making an investigation into any
       case involving tax evasion or for the prevention of fraud on the
       revenue, would cover a case of a person being taxpayer in a foreign
       jurisdiction with whom Jamaica has agreement in place for exchange of
       information and information is sought by the competent authority of
       that jurisdiction. Section 6(2) of the RAA provides that it shall be the
       duty of the Revenue Protection Department to carry out investigations
       into cases involving fraud against the revenue. The RAA defines the
       revenue to mean all tolls, taxes, imposts, rates, duties, fees, levies,
       fines, and other charges prescribed by or under any enactment. The
       answer to this query would depend upon, whether the term ―revenue‖
       also includes taxes levied in the foreign jurisdiction. This becomes an
       interpretation issue and the assessment team does not wish to conduct
       this exercise and may not be appropriate do so.
       174.      The assessment team is of the view that the tax authorities do
       not have well defined powers to obtain information in the cases of
       persons who are not taxpayers in Jamaica. This view is strengthened by
       the language of RAA s.17G which requires the judge before issuing a




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      production order to be satisfied that the Commissioner had first made
      request to the taxpayer without success.
      175.      To conclude, the assessment team is of the view that the
      powers of the tax authorities under the Revenue Administration Act and
      the Income Tax Act are restricted so they can obtain information in case
      of a taxpayer of Jamaica only and this is tantamount to the presence of
      domestic tax interest in the tax laws of Jamaica.

      Powers under other acts
      176.       The tax authorities have powers to request information from
      public officers. The information might be available with them or they
      should be able to procure it from the persons with whom the same is
      available.
      177.       Under the Companies Act, the Registrar (public officer as per
      s.351 of the Companies Act) or other government authorities do not
      have powers to obtain information from the company, except the
      powers of inspection provided in sections 160 to 171 of the Companies
      Act. The Minister can authorise inspections on the basis of grounds
      stated in the relevant sections. These inspections are of two types: i)
      investigation of a company‘s affairs and of related companies, and ii)
      investigations into the ownership of the companies. Section 352(2) of
      the Companies Act requires that a process for compelling the
      production of any document kept by the Registrar can only occur under
      a court order.

      Ownership and identity information (ToR B.1.1)
      178.       Information is required to be held by banks and financial
      institutions about their customers. (see earlier analysis of the AML
      laws, regulations and guidance note). The information about the
      identity and ownership of building society registered under the Building
      Societies Act and a society registered under the Cooperative Societies
      Act or the Industrial and Provident Societies Act can be obtained from
      them by following the procedure available under s.17G of the RAA.
      179.       The Tax Commissioner can request issue of a production
      order in the following circumstances:
         the Commissioner should have reasonable grounds for suspecting
          that the information is in the possession or control of the person
          such as a bank or financial institution;




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           the information should be relevant to the duties of the
            Commissioner with regard to making an assessment in relation to a
            taxpayer under any relevant law, making an investigation into any
            case involving tax evasion or for the prevention of fraud on the
            revenue, determining the tax liability of a taxpayer under a relevant
            law; or collecting any outstanding amount owed by a taxpayer on
            account of tax, penalty, interest or fine under any relevant law;

           the court can issue production order only in the case of a taxpayer
            and the taxpayer in the RAA is defined as – ―includes any person
            whose liability to make payment of revenue to a revenue
            department is in question whether or not, in the event, the payment
            is waived or remitted or no amount is found payable‖;

           the Court is required to be convinced that a ―fishing expedition‖ is
            not being pursued and the taxpayer is not co-operating in providing
            the information;

           the information is first to be requested from the taxpayer.

       180.      The protocol to the Jamaican tax treaty with Spain provides
       that the Minister has the power to obtain bank information. Jamaica has
       clarified that the requirements of approaching the court before
       obtaining the information from the banks also applies to the Minister.
       181.      Jamaica requires that the requesting state, when seeking bank
       information, should normally submit a request letter setting out the
       nature and purpose of the request, the name of the taxpayer and any
       relevant records on the taxpayer. The Jamaican tax authorities would
       then request information from the bank in accordance with domestic
       law.
       182.       The tax authorities can obtain bank information with respect
       to persons under examination in Jamaica only and cannot thus request
       the bank information if the person is not already under tax examination
       in Jamaica, who is the subject of the EOI request. The assessment team
       is, therefore, of the view that though the tax treaty with Spain provides
       that the Minister has power to obtain bank information, the requisite
       information cannot be obtained if the person concerning whom request
       is made is not a taxpayer in Jamaica.
       183.     Information concerning the members of companies and their
       holdings is available in the register of members maintained by the
       company. These documents are available for inspection during office



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      hours to the members and to the public after payment of a fee. The tax
      authorities do not have any powers to obtain information about the
      identity and ownership of the company directly from the company, if
      such a request is not in relation with the assessment of taxpayer (s.75(5)
      ITA). The tax authorities can obtain the information about members by
      inspecting the register of members as per the procedure outlined in
      s.112 of the Companies Act by paying the inspection fee.
      184.       The judicial procedure prescribed in s.17G of the RAA will
      only be available if the requested information is in relation with:
      establishing an assessment with respect to a taxpayer under any relevant
      law, any case involving tax evasion or for the prevention of fraud on the
      revenue, determining the tax liability of a taxpayer under a relevant
      law; or collecting any outstanding amount owed by a taxpayer on
      account of tax, penalty, interest or fine under any relevant law.
      185.     The information about the identity of the owners that hold
      share warrants cannot be obtained as it is neither available with the
      company or the regulatory authorities.
      186.       Partnerships and trusts are required to file information about
      the identity and holding of each partner or beneficiary as the case may
      be to the tax authorities in the form of a tax return (Form IT-03). The
      tax authorities would be in a position to provide the information
      available in the tax returns in response to EOI request. If the
      partnerships/trusts have not delivered their tax returns to the tax
      authorities then tax authorities would be required to initiate proceedings
      specified in ITA s.70 against defaulting partnerships/trusts. As noted
      previously, the tax authorities cannot obtain information from the
      partnership or trusts, if no tax proceedings are pending in respect of
      person for which information is requested. The information about new
      trustees can be obtained by the Commissioner from Record Office,
      referred to in s.10(6) of the Trustees Act, by using powers contained in
      s.70(5) of the ITA.
      187.       Jamaica has replied that non-charitable trusts are required to
      file income tax returns, therefore the information about the settlers,
      trustee and beneficiaries are available in the tax returns of such trusts.
      The assessment team verified the information available in the tax form
      14
         and such form does not require providing the information about the
      settlors of the trust, though the information on beneficiaries is available.
      The charitable trusts file their annual financial statements to the
      14

           http://www.jrs.gov.jm/home_template.php?page=forms&ye=1&desc=Income+
           Tax


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       Taxpayer Audit and Assessments Departments. Jamaica has not
       furnished the copy of annual financial statements or other documents
       with regard to charitable trusts, who are exempt from paying taxes as
       well as from filing tax returns, therefore the availability of information
       in such could not be verified by the assessment team.
       188.      Tax authorities dealing with the registration of taxpayers
       (s.17D RAA) have information about the taxpayers as is required to be
       provided by them and this information can be used to meet the request
       received.
       189.      The non-resident beneficiaries of a trust or the non-resident
       partners of a partnership created in Jamaica are assessed to tax through
       the representatives of these persons in Jamaica, as per s.53 of the ITA.
       In the case of a beneficiary of a trust, the representative is the trustee
       (s.55).

       Accounting records (ToR B.1.2)
       190.      Accounting records are maintained by various entities as
       required by the legislation regulating those persons and /or required by
       the Income Tax Act. Accounting records are not required to be filed
       with the government authorities regulating them, except the profit and
       loss account and balance sheet in case of companies. The accounting
       records cannot be requested for inspection and copies cannot be
       obtained by the tax authorities from the person directly maintaining
       these records unless there is a request made by the Commissioner to a
       person to provide a tax return (s.70 ITA).
       191.      If a foreign tax authority requests information about business
       of its taxpayer with a natural or legal person operating in Jamaica,
       which in turn require information from a third person in Jamaica, the
       tax authorities would be required to follow the judicial procedure of
       RAA s.17G as discussed previously.

       Use of information gathering measures absent domestic tax
       interest (ToR B.1.3)
       192.       The tax authorities have information gathering powers for use
       when taxpayers are under examination. As mentioned previously, under
       the RAA information cannot be obtained from the taxpayer or third
       parties in absence of tax proceedings initiated by Jamaica. The powers
       under the ITA are less restrictive and allow for requests of information
       to taxpayers. Section 83 of the ITA provides for the arrangements with



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      the government of territory outside Jamaica with regard to relief from
      double taxation. But, due to domestic tax interest requirements it may
      not be possible to provide the requested information.
      193.      194. The power to obtain information is very limited
      because tax authority can only obtain information if the taxpayer is
      currently under examination. A jurisdiction should have no restrictions
      on information exchange caused by the domestic tax interest
      requirement. The TOR (B.1.3) provides that competent authorities
      should use all relevant information-gathering measures to obtain the
      information requested, notwithstanding that the requested jurisdiction
      may not need the information for its own tax purposes (e.g. information
      should be obtained whether or not it relates to a taxpayer that is
      currently under examination by the requested jurisdiction).
      Compulsory powers (ToR B.1.4)
      195.      As discussed above the powers to obtain information are
      limited to information held by the taxpayer if he is under examination
      or information already held by government authorities.
      196.       Under the EOI arrangements, the Contracting State is not
      obliged to provide information not obtainable under the domestic laws
      or in the normal course of the administration of that or other
      Contracting State. The powers of inspection, search and seizure of
      documents, though available in Jamaican law, are subject to certain
      requirements as provided above, it may therefore be that if these
      requirements are not met Jamaica can refuse to resort to such methods
      for responding to information requests from the tax authorities of other
      countries.
      197.       The assessment team is of the belief that clear laws or
      regulations should be adopted that allow for the Jamaican tax
      authorities to have the necessary powers to issue a notice to any person
      residing in the territorial jurisdiction of Jamaica, who is suspected to
      have information in his possession or control, to produce the
      information and give evidence in connection with any proceedings to
      comply with its obligations under EOI arrangement. This power to
      issue the notice should not be limited by the fact that such person
      should be under tax examination. This power may be subject to internal
      controls and safeguards to avoid the misuse.

      Secrecy provisions (ToR B.1.5)
      198.      Section 45(1) of the Banking Act contains provisions for
      protecting the secrecy or confidentiality of the information held by


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       banks. The official or the person, having access to records of the bank
       or the material with regard to the account of any customer of the bank,
       are prohibited from giving, divulging or revealing such information.
       The contravention of the provisions on conviction provides a fine up to
       USD 2 000 000 or to imprisonment for a term up to two years or to both
       such fine and imprisonment.
       199.      However, the above stated secrecy rule can be overridden if
       one or more of the 13 circumstances described in the Fourth Schedule
       of the Banking Act. These include:
           the information is disclosed to an authorised officer (Supervisor,
            Deputy Supervisor or any other person authorised to perform
            functions on behalf of the Supervisor or the Deputy Supervisor
            under Bank of Jamaica Act);

           the disclosure is made on the written direction of the Minister to
            the police or to a public officer who is duly authorised under the
            provisions of any law for the time being in force which requires
            such disclosure for the purpose of the investigation or prosecution
            of a criminal offence;

           the Minister in writing directs such disclosure to a foreign
            government or agency of such government where there exists
            between Jamaica and such foreign government an agreement for
            the mutual exchange of information of such kind and the Minister
            considers it in the public interest that such disclosure be made;

           the disclosure is required under another enactment;

           the disclosure is required by virtue of an order of the court, other
            than an order under paragraph (g). Paragraph (g) provides for the
            circumstance, where the bank has been served with a court order
            attaching money in the account of the customer.

       200.      Similar provisions regarding secrecy, exceptions thereof and
       contravention amounting to an offence are available in s.44 of the
       Financial Institutions Act.
       201.      Secrecy provisions are also contained in s.34D and s.47 of the
       Bank of Jamaica Act. Section 34D(1)(b) requires that an authorised
       officer shall not disclose other than for the purpose of the Bank of
       Jamaica Act, the Banking Act, or the Financial Institutions Act, any
       information regarding the affairs of a customer of a commercial bank or



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      specified financial institution, obtained in consequence of the
      performance of his duties under the Act. Provisions of s.47 require the
      officers and servants and auditors of the bank to preserve and aid in
      preserving secrecy. Unauthorised disclosure constitutes an offence.
      202.      There is no restriction in the company law for providing the
      information to the tax authorities. But, s.390 of the Companies Act
      provides that a person who has acted as attorney for the defendant
      cannot be required to disclose any privileged communication to him in
      the capacity of attorney.
      203.       Section 4 of the ITA requires every person involved in the
      administration of the act to deal with all documents, information,
      returns, assessment lists and copies of such lists relating to the income
      or items of income of any person as secret and confidential. However,
      communicating the information or contents of documents for the
      purpose of the act and to the person authorised by the Minister is
      permitted. Similar secrecy provisions are available in s.17H of the
      RAA, s.19A of the Customs Act, s.37 of the Transfer Tax Act, s.8 of
      the Asset Tax Act and s.59B of the Securities Act.
      204.       Section 17H of the RAA, s.62 of the General Consumption
      Tax Act and s.59B of the Securities Act has additional provisions of
      secrecy applicable to the persons to whom the information is
      communicated. They shall regard and deal with such information as
      secret and confidential and shall make and subscribe a declaration to
      that effect before a Justice of the Peace.
      205.      The secrecy provisions available under various acts can be
      overridden under various circumstances, as in the case of the Banking
      Act and Financial Institutions Act discussed above. The information
      can be obtained by the Commissioner by obtaining production order.
      The tax authorities share information for the purposes of the act. Due to
      these specific safeguards inbuilt in the law, the information can be
      made available to the tax authorities and a secrecy provision as such
      does not act as a barrier to information exchange.
      206.       Contravention of the secrecy provisions amounts to an
      offence under the respective enactments and also under the ITA.
      Section 83 of the ITA authorises the Minister to make orders declaring
      arrangements to be in force with other territories with a view to
      affording relief from double taxation and s.83(4) provides that when
      such arrangements have effect, the obligation as to secrecy imposed by
      s.4 shall not prevent the disclosure to any authorised officer of the
      Government with which arrangements are made, of such information as
      is required to be disclosed under the arrangement. Due to these specific


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       provisions, the secrecy provisions do not prevent the information
       disclosure to the competent authority of treaty partner.
       207.      Under various Jamaican statutes secrecy provisions are
       foreseen and the person dealing with the information in their official
       capacity have duty to regard and deal with such information as secret
       and confidential. However, such persons are allowed to communicate
       the information to:
           the person to whom he is authorised by the Minister to communicate;

           for the purpose of the Act.

       208.       The secrecy provisions under various enactments are in place
       but information may be exchanged between different administrative
       authorities, if authorised by the Minister. Jamaica has not clarified the
       rules or orders made, if any, by the Minister in this regard.

       Determination and factors underlying recommendations
                                          Determination
The element is not in place.
Factors underlying recommendations                  Recommendations
The powers of Jamaica’s tax authorities to          The tax authorities should be granted the
obtain information for exchange of                  power to obtain information that is the
information from the taxpayer or third              subject of request under an exchange of
parties are subject to there being a                information notwithstanding Jamaica might
domestic tax interest.                              not need the information for its own tax
                                                    purposes.




B.2.       Notification requirements and rights and safeguards

The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.

       209.      The domestic law does not require that the person who is the
       subject of the request be notified that such a request has been made.
       Section 17G of the RAA provides that the Judge in Chambers may
       issue production orders after satisfaction that the Tax Commissioner
       has requested the information from the taxpayer without success.
       Therefore, the taxpayer is notified.



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      210.      The limits on information exchange due to rights and
      safeguards are provided in the 2002 OECD Model Agreement on
      Exchange of Information on Tax Matters and its commentary and in
      Article 26 of the OECD Model Tax Convention on Income and on
      Capital and its commentary. The assessment team could find out the
      provisions for these rights and safeguards of taxpayers and third parties
      in the domestic laws of Jamaica as mentioned below:
         s.45(1) of the Banking Act allows the authorisation by the Minister
          to share information with the foreign countries if he is satisfied that
          such sharing of information is in public interest; and

         under the judicial procedure mentioned in s.17G of the RAA
          persons registered under the Public Accountancy Act are required
          to furnish information, documents or records which form part of
          taxpayer accounting records only. This indirectly indicates non-
          disclosure of the privileged communication between the accountant
          and the taxpayer.

      211.      The Income Tax Act and the Revenue Administration Act do
      not provide the safeguards to the taxpayer or third parties with regard
      to the following, as the acts do not mention that the Minister will
      decline exchange of information where the information is:
         covered by attorney client privilege;

         a trade, business industrial, commercial or professional secret;

         Information the disclosure of which would be contrary to public
          policy (ordre public).

      212.       It is necessary that the laws of Jamaica provide the safeguards
      to taxpayers which are guaranteed by the standards of exchange of
      information and the competent authority should be in a position to
      decline information for the safeguards provided in the EOI mechanisms
      of Jamaica Regarding safeguards, Jamaica has clarified that, in seeking
      re-dress, the taxpayer may go through the Civil Proceedings in the
      Supreme Court where they would apply for Judicial Review. Pursuant
      to Part 56.6 of the Civil Procedure Rules, persons who are seeking
      Judicial Review must do so promptly and in any event within 3 months
      from the date when the grounds for the application first arose. This is
      done in the form of an ex-parte application for leave which is usually
      granted. Upon the hearing of the matter, the court can offer several
      remedies including quashing the decision of the Tax Authorities. Either


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       party may then appeal to a higher court. The matter could go all the
       way to the Judicial Committee of the Privy Council. There is no
       stipulated timeframe for the court to arrive at a decision.
       213.     The judicial remedy/appeal process is always open to the
       taxpayer or any third party who is aggrieved by any action of the
       Revenue. This process can take between 6 months to one year or more
       depending on how far the appeal is taken.

       Not unduly prevent or delay exchange of information (ToR
       B.2.1)
       214.      The protocol to the Jamaica – Spain tax treaty under the
       heading ‗possibility of declining a request‘ states that, ―The rights and
       safeguards secured to persons by the laws or administrative practice of
       the Contracting State which has been requested to provide the
       information under this Article shall not be applied in a manner that
       would unduly prevent or delay effective exchange of information‖.
       There is no such explicit provision in Jamaica‘s other treaties.
       215.      Jamaican authorities have advised that, generally, the
       procedure for obtaining a production order from the court for
       information from third parties as per s.17G of the RAA is done
       expeditiously (usually within a week after requesting order). The order
       generally specifies that the third party produce the information within
       30 days of receipt of the order (s.17G RAA). The procedure for
       obtaining information from the banks and other persons listed in s.17G
       of RAA, through the production order of the Court may cause delay in
       providing the information to the competent authority of the requesting
       state, however, considering the submission of Jamaica about time taken
       in the procedure the delay in not material.
       216.        Jamaica has agreed that, the law does not provide for the
       obtaining of information before first requesting it from the taxpayer.
       However, in practice, the Taxpayer Audit and Assessment Department,
       which has an investigative arm, usually investigates not only taxpayers
       but anyone of interest who may be in breach of the tax laws, without
       first notifying them.

       Determination and factors underlying recommendations
                                          Determination
The element is in place, but certain aspects of the legal implementation of the
element need improvement.



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Factors underlying recommendations               Recommendations
Taxpayers’ rights are protected by the           It is recommended that certain exceptions
judicial    procedures      for    gathering     from prior notification be permitted (e.g. in
information. To require in all cases that the    cases in which the information request is of
taxpayer be first approached, and thus           a very urgent nature or the notification is
notified, may unduly prevent or delay the        likely to undermine the chance of success
effective exchange of information in urgent      of the investigation conducted by the
cases.                                           requesting jurisdiction).




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C.        Exchanging Information


Overview

       217.      Jurisdictions generally cannot exchange information for tax
       purposes unless they have a legal basis or mechanism for doing so. The
       legal authority to exchange information may be derived from bilateral
       or multilateral mechanisms (e.g. double tax conventions, tax
       information exchange agreements, the Joint Council of Europe/OECD
       Convention on Mutual Administrative Assistance in Tax Matters) or
       arise from domestic law. Within particular regional groupings
       information exchange may take place pursuant to exchange instruments
       applicable to that grouping (e.g. within the EU, the directives and
       regulations on mutual assistance).
       218.       Jamaica has a tax treaty network with 21 jurisdictions,
       consisting of 11 bilateral tax treaties15 and a multilateral CARICOM
       Income Tax Treaty. This multilateral treaty has been signed by Jamaica
       and 10 other jurisdictions. All these agreements are in force and provide
       for the exchange of information. Jamaica‘s agreement with Spain and
       its TIEA with the US clearly provide for exchange of information to the
       international standard, as they contain EOI articles with language
       similar to Article 26 of the OECD Model Tax Convention.



C.1.      Exchange-of-information mechanisms

Exchange of information mechanisms should allow for effective exchange of information.




  15
        Jamaica also has a tax treaty with Switzerland. However, this treaty does not
          have an exchange of information article and is thus not considered in this
          analysis.



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      Foreseeably relevant standard (ToR C.1.1)
      219.      Jamaica has bilateral tax treaties with 11 countries namely
      Canada, the Peoples Republic of China, Denmark, France, Germany,
      Israel, Norway, Spain, Sweden, the United Kingdom and the US.
      Jamaica is also a member of the CARICOM Multilateral Tax Treaty,
      which is signed by 11 jurisdictions, the other 10 are: Antigua and
      Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, St. Kitts and
      Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and
      Tobago. Jamaica has also signed a tax information exchange agreement
      (TIEA) with the USA. All of Jamaica‘s treaties and its TIEA are in
      force.
      220.      The agreements with Canada, China, Denmark, France,
      Israel, Norway, Sweden, the United Kingdom, the United States and the
      CARICOM agreement provide for the exchange of information as is
      ―necessary‖ for carrying out the provisions of the convention or of the
      domestic laws of the Contracting states concerning the taxes covered by
      the agreements. The agreement with Spain uses the word ―foreseeably
      relevant‖ in place of ―necessary‖. The commentary to Article 26 of the
      OECD Model Tax Convention, in paragraph 5 refers to this standard of
      ―foreseeable relevance‖ and states that the Contracting States may
      agree to an alternative formulation of this standard that is consistent
      with the scope of the Article (e.g. by replacing ‖foreseeably relevant‖
      with ―necessary‖ or ―relevant‖). In view of this recognition of term
      ―necessary‖, all the agreements meet the ―foreseeably relevant‖
      standard.
      221.      One of Jamaica‘s agreements - with Germany - provides for
      the exchange of information that is ‗necessary‘ for carrying out the
      provisions of the agreement, but does not specifically provide for the
      exchange of information in aid of the administration and enforcement
      of domestic laws.
      222.      Therefore, all but one of Jamaica‘s agreements meets the
      foreseeably relevant standard.

      In respect of all persons (ToR C.1.2)
      223.       All agreements of Jamaica, except with Germany, either
      specifically mention that the exchange of information is not restricted
      by Article 1 (Personal Scope) or information is to be exchanged for
      carrying out the provisions of the domestic laws. The domestic laws are
      applicable to all non-residents also, therefore, it can be stated that even
      in absence of reference to Article 1, the information can be exchanged
      in respect of all persons. The agreement with Germany, which provides

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       for the exchange of information for the carrying out of the provisions of
       the agreement, is therefore only applicable provided one of the persons
       concerned is resident in one of the Contracting States. Therefore, all
       but one of Jamaican agreements allow for exchange of information with
       respect to all persons.

       Obligation to exchange all types of information (ToR C.1.3)
       224.       Jamaica‘s tax treaty with Spain (the most recent, effective
       16.05.2009) includes a paragraph in the exchange of information article
       similar to paragraph 5 of Article 26 of the OECD Model Tax
       Convention, which reads ―In no case the provisions of paragraph 4 be
       construed to permit a contracting state to decline to supply information
       solely because the information is held by a bank, other financial
       institution, nominee or person acting an agency or a fiduciary capacity
       or because it relates to ownership interest in a person‖. Jamaica‘s TIEA
       with the USA also provides that the competent authorities of the
       Contracting states have authority to obtain and shall provide
       information from financial institutions (art.3(2) of the TIEA).
       225.       Jamaica‘s bilateral tax treaties with other countries do not
       contain paragraphs similar to paragraphs 4 and 5 of Article 26 of the
       OECD Model Tax Convention, but the domestic laws of these treaty
       partners do not have any provisions limiting the exchange of
       information. Therefore, under these treaties, Jamaica as well as all
       treaty partners may be able to exchange all type of information.
       226.      The CARICOM agreement also does not contain provisions
       similar to paragraphs 4 and 5 of OECD Model. It meets the standard
       with respect to 3 jurisdictions only: Antigua and Barbuda, Barbados
       and Saint Kitts and Nevis for the following reasons:
            the competent authorities of Belize, St. Lucia and St. Vincent and
             the Grenadines have access to bank information in criminal tax
             matters only;

            Grenada is only able to access information for the purpose of its
             TIEA with the USA, therefore, it will not be able to exchange
             information in pursuance to CARICOM agreement;

            Dominica has not provided any information regarding powers of
             competent authority to access bank information; 16

16
          See Tax Co-operation 2009 –Towards a Level Playing Field.


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         information about competent authorities‘ powers to access bank
          information to obtain ownership, identity and accounting
          information for the purpose of exchange of information is not
          available with respect to Guyana and Trinidad and Tobago, so it is
          not possible to confirm that the CARICOM treaty with those
          jurisdictions meets the OECD standard;

         Saint Kitts and Nevis has enacted the Saint Christopher and Nevis
          (Mutual Exchange of Information on Tax Matters) Act 2009 which
          provides that all types of information may be obtained and shared
          with treaty partners (civil as well as criminal);

         the competent authorities of Antigua and Barbuda and Barbados
          have powers to obtain bank information and access to ownership,
          identity and accounting information. Therefore, all types of
          information can be exchanged if all other conditions are also
          satisfied.


      Absence of domestic tax interest (ToR C.1.4)
      227.      Jamaica‘s tax treaty with Spain includes a paragraph in the
      exchange of information article similar to paragraph 4 of Article 26 of
      the OECD Model Tax Convention, which reads: ―If the information is
      requested by a Contracting State in accordance with this Article, the
      other Contracting State shall use its information gathering measures to
      obtain the requested information, even though the other State may not
      need such information for its own tax purposes. Accordingly, that other
      Contracting State neither shall nor decline to supply information solely
      because it has no domestic interest in such information‖.
      228.       The exchange of information agreement with the USA
      provides that, if the information available in the tax files of the
      requested states is not sufficient to enable compliance with the request,
      that State shall take all relevant measures to provide the Applicant State
      with the information requested (Art.3(2) TIEA).
      229.       The bilateral treaties with other countries do not contain
      similar language, but the domestic laws of all the treaty partners do not
      require the presence of domestic tax interest for the purpose of
      exchange of information.
      230.      However, the powers of Jamaican tax authorities to obtain
      information are subject to the procedures provided under domestic law
      which require that the taxpayer be under examination. This requirement


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       amounts to domestic tax interest requirement and Jamaica and on this
       finding Jamaica has commented that, ―According to the common law
       tradition the State (including the Revenue) should not be allowed to go
       on a fishing expedition therefore the requirement for the intervention of
       the Court is there to ensure that the Revenue has a prima facie case
       before it requires information from third parties. Additionally third
       parties have their own rules with regard to the disclosure of the
       taxpayer information. However the taxpayer is given every opportunity
       to produce the information before recourse to the courts.
       Notwithstanding this, in realising that the interest of the Revenue has to
       be safeguarded and that in order to do so it must go beyond the request
       of information from the taxpayer, the Revenue has taken steps by way
       of administrative intervention to carry out investigations which it is
       hoped will assist in the protection of the Revenue‘s interest. The
       Revenue is also involved in providing information to the other arms of
       State in the interests of National Security.‘‘

       Absence of dual criminality principles (ToR C.1.5)
       231.      Jamaica‘s agreements do not contain any dual criminality
       provisions for exchange of information in tax purposes. The protocol to
       the Jamaica-Spain treaty provides that information shall be exchanged
       without regard to whether conduct being investigated would constitute
       a crime under the laws of that contracting state if such conduct occurred
       therein. Therefore, there is no restriction to exchange information on
       this account.

       Exchange of information in both civil and criminal tax matters
       (ToR C.1.6)
       232.     All of Jamaica‘s agreements for the exchange of information
       provide for exchange of information in both civil and criminal tax
       matters.

       Provide information in specific form requested (ToR C.1.7)
       233.       Jamaica‘s TIEA with the USA provides that the Competent
       Authority of a Contracting State shall provide information, if
       specifically requested by the Competent Authority of the other State, in
       the form of depositions of witnesses and authenticated copies of
       unedited original documents (including books, papers, statements,
       records, accounts, or writings), to the same extent such depositions and
       documents can be obtained under the laws and administrative practices


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      of such State with respect to its own taxes. The protocol to treaty with
      Spain also provides that, if specifically requested the contracting state
      shall provide information to the extent allowable under its domestic
      laws, in the form of depositions of witnesses and authenticated copies
      of the original records. Though this provision is not provided in other
      tax treaties, there appears to be no restrictions in Jamaica as far as the
      same is consistent with its own domestic law and administrative
      practices.

      In force (ToR C.1.8)
      234.     All of Jamaica‘s signed agreements are in force. In addition,
      Jamaica has negotiated a tax treaty with the Netherlands Antilles and
      this was initialled on 21 May 2009 in Kingston which contains an
      exchange of information provision similar to that concluded with Spain.
      Cabinet approval has been received in 2010, but is not yet in force.

       Be given effect through domestic law (ToR C.1.9)
      235.       In order to ratify and therefore give effect to the provisions of
      the tax treaty, Cabinet Approval is required. The treaty is accordingly
      signed by the Minister of Finance and the contracting parties, and
      gazetted. There is no need for approval from Parliament. The treaty is
      incorporated into Jamaican laws by Minister of Finance making the
      order pursuant to s.83 of the ITA. This order (which includes the actual
      treaty) is published by way of Notice in the Gazette that introduces the
      treaty into Jamaican Law.
      236.      Jamaica‘s agreement with the Spain requires the exchange of
      information regardless of whether Jamaica‘s tax authorities require the
      information for their own tax purposes. The Jamaican authorities can
      obtain information in the cases of continuing tax proceedings only and
      may not be able to meet the request in all cases with regard to treaty
      with Spain.

      Determination and factors underlying recommendations
                                      Determination
The element is not in place
Factors underlying recommendations             Recommendations
Only 1 of Jamaica’s 21 treaties and its 1      Jamaica should consider both removing its
TIEA provide for effective exchange of         domestic tax interest and strengthening its
information to the standard.                   international agreements to meet the


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                                          Determination
                                                   international  standard,  including  by
                                                   incorporating text in its exchange of
                                                   information articles corresponding to
                                                   paragraphs 4 and 5 of Article 26 of the
                                                   Model Tax Convention.


C.2. Exchange-of-information mechanisms with all relevant
partners

The jurisdictions’ network of information exchange mechanisms should cover all relevant
partners.


       237.       Jamaica‘s agreements are shared with a variety of
       jurisdictions, including:
           5 of its 8 primary main trading partners (United States, Canada, United
            Kingdom, France, Trinidad and Tobago; but not the Netherlands,
            Trinidad and Tobago, or Russia);

           20 of the 92 Global Forum member jurisdictions;

           9 of the 31 OECD member economies;

           3 of the 19 non-EU G20 members (United States, Canada, and China);

           8 of the 27 EU members;

           11 counterparties in North America and the Caribbean, 8 in Europe, 2 in
            Asia and one in South America.

       238.      Jamaica has a fairly good tax treaty network covering its
       major trading partners, but not with all the significant economies in its
       region with whom it has sizeable business, such as Brazil and
       Venezuela. Jamaica is planning to develop an international financial
       services centre; therefore, it is necessary to have tax treaties in place
       with other major investing economies.
       239.      No information has been received which would suggest that
       Jamaica has not entered into an agreement with any jurisdiction when it
       has been requested to do so.




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       Determination and factors underlying recommendations
                                      Determination
The element is in place
Factors underlying recommendations              Recommendations
                                                It is recommended that the Jamaican
                                                government   continue  to   conclude
                                                agreements with additional relevant
                                                partners.



C.3.     Confidentiality

The jurisdictions’ mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received .


       Information received: disclosure, use, and safeguards (ToR
       C.3.1)
       240.       All of Jamaica‘s treaties and its one TIEA contain provisions
       for ensuring the confidentiality of the information received. The tax
       treaty with Germany (oldest) provides that ―any information exchanged
       shall be treated as secret and shall not be disclosed to any persons,
       authorities or courts other than those concerned with the assessment or
       collection of the taxes which are subject of this agreement or
       determination of appeals or the prosecution of offence in relation
       thereto‖.
       241.       Provisions for keeping the information confidential are also
       available in the domestic laws of Jamaica. Section 4 of the Income Tax
       Act provides that:
       Every person having any official duty or being employed in the
       administration of this Act shall regard and deal with all documents,
       information, returns, assessment list and copies of such lists relating to
       the income or items of the income of any person, as secret and
       confidential, and shall make and subscribe a declaration to that effect
       before a Justice of the Peace.
       Every such person having possession of or control over any
       documents, information, returns or assessment lists, or copies of such
       lists relating to the income or items of income of any person, who at
       any time communicates or attempts such information or anything
       contained in such documents, returns, lists or copies to any person-


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            a)    Other than a person to whom he is authorized by the Minister
                  to communicate it; or
            b)    Otherwise than for the purpose of the Act, shall be guilty of an
                  offence against this Act.

       242.       The standards of confidentiality require that information
       received under the exchange of information provisions shall be treated
       as secret in the same manner as information obtained under the
       domestic laws of that State and shall be disclosed to persons and
       authorities (including courts and administrative bodies) concerned with
       the assessment or collection of, the enforcement or prosecution in
       respect of, the determination of appeals in relation to the taxes or the
       oversight of the above. Such persons or authorities shall use the
       information only for such purposes. They may disclose the information
       in public court proceedings and judicial decisions.
       243.       As per s.4 of the Income Tax Act, the Minister can authorise
       communicating the information to any person. Information obtained
       under the exchange of information mechanism should only be used by
       the persons authorised to use such information. For maintaining the
       confidentiality of the information received from the foreign tax
       authorities, it is necessary that the law or rules clearly specify which
       authorities can use the information exchanged. There are no legislative
       rules governing the exercise of the Minister‘s authority to disclose
       information to persons in an official capacity. However, in accordance
       with hierarchy of Jamaican laws, the provisions of a treaty which has
       been enacted into Jamaican law prevail over the provisions in other
       laws. Thus, regardless of the Minister‘s power to authorise
       communication of information to any person, the confidentiality
       requirements within the treaties will ensure this does not happen with
       respect to international exchange of information.
       244.      Pursuant to the provisions of the section 17(H)(2)(a) of the
       Revenue Administration Act, the Minister may authorise another person
       to receive information. In such a case, an instrument is drafted in which
       the Minister authorises the tax authority to give information to persons
       who are not revenue officers under the act.

       All other information exchanged (ToR C.3.2)
       245.      The confidentiality provisions in the DTCs and in Jamaica‘s
       domestic law do not draw a distinction between information received in
       response to requests and information forming part of the requests
       themselves. As such, these provisions apply equally to all requests for


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       such information, background documents to such requests, and any
       other document reflecting such information, including communications
       between the requesting and requested jurisdictions and communications
       within the tax authorities of either jurisdiction.

       Determination and factors underlying recommendations
Determination
The element is in place



C.4.     Rights and safeguards of taxpayers and third parties

The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties.


       Exceptions to requirement to provide information (ToR C.4.1)
       246.       Jamaica has replied that EOI articles in the treaties allow the
       non-disclosure in the circumstances specified. The Jamaican tax treaties
       have generally provided that the Contracting States are not obliged to
       provide information which would disclose any trade, business,
       industrial, commercial or professional secret or the information the
       disclosure of which would be contrary to public policy.

       Determination and factors underlying recommendations
Determination
The element is in place



C.5.     Timeliness of responses to requests for information

The jurisdiction should provide information under its network of agreements in a timely
manner.


       Responses within 90 days (ToR C.5.1)
       247.       In order for exchange of information to be effective it needs
       to be provided in a timeframe which allows tax authorities to apply the
       information to the relevant cases. If a response is provided but only
       after a significant lapse of time the information may no longer be of use


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       to the requesting authorities. This is particularly important in the
       context of international cooperation as cases in this area must be of
       sufficient importance to warrant making a request. A review of the
       practical ability of Jamaica‘s tax authorities to respond to requests in a
       timely manner will be conducted in the course of Jamaica‘s Phase 2
       review.

       Organisational process and resources (ToR C.5.2)
       248.      A review of Jamaica‘s organisational process and resources
       will be conducted in the context of its Phase 2 review.

       Absence of restrictive conditions on exchange of information
       (ToR C.5.3)
       249.     There were no aspects of Jamaica‘s laws that appeared to
       impose restrictive conditions on exchange of information.

       Determination and factors underlying recommendations
Determination
The assessment team is not in a position to evaluate whether this element is in
place, as it involves issues of practice that are dealt with in the Phase 2 review
Factors underlying recommendations                  Recommendations
                                                    Jamaica       should    act    on     the
                                                    recommendations noted in respect of other
                                                    essential elements to ensure that
                                                    information requests can be responded to
                                                    in a timely manner.




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               SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 77




     Summary of Determinations and Factors Underlying
                    Recommendations


                           Factors         underlying
Determination                                                      Recommendations
                           recommendations
Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities. (ToR A.1)
                           Information is not required to          Jamaica should establish a
                           be maintained by a company              requirement that information
                           nor is it otherwise available to        is maintained indicating the
                           the competent authority that            person on whose behalf any
                           identifies the persons in an            legal owner holds his interest
                           ownership chain where a legal           or shares in the company or
                           owner of a company acts on              body corporate. This could,
                           behalf of other person as a             for example be achieved by
                           nominee or under similar                way of requirements on
                           arrangement.                            companies       and    bodies
                                                                   corporate     themselves,   or
                                                                   alternatively     via      the
                                                                   information submitted to the
The element is in                                                  Registrar of Companies.
place, but certain
aspects of the legal       While share warrants to bearer          Jamaica        should    take
implementation of          areno longer           issued in        necessary      measures    to
the element need           Jamaica, there are insufficient         ensure        that     robust
improvement                mechanisms in place that                mechanisms are in place to
                           ensure the availability of              identify the owners of share
                           information       allowing    for       warrants to bearer.
                           identification of the owners of
                           previously      issued      share
                           warrants to bearer.
                           Companies           incorporated        As     Jamaica     asserts    a
                           outside of Jamaica but having           sufficient nexus for taxing
                           their central management and            jurisdiction on a management
                           control in Jamaica are not              and control basis, it should
                           required to provide information         require       submission     of
                           identifying their owners as a           information on its owners
                           part        of        registration      when       foreign  companies
                           requirements      and     foreign       register or when they apply for



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78 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
                        Factors         underlying
Determination                                                  Recommendations
                        recommendations
                        companies are not required to          their tax file number and
                        compulsorily keep a share              Jamaica       should     take
                        register in Jamaica. Therefore,        necessary steps to require
                        the information that identifies        foreign companies to keep
                        the     owners    of    foreign        registers    of      Jamaican
                        companies is not available.            shareholders in Jamaica.


Jurisdictions should ensure that reliable accounting records are kept for all relevant
entities and arrangements. (ToR A.2)
                        There is no clear requirement          Relevant legislation for each
                        that relevant entities and             type      of     entity    and
                        arrangements keep underlying           arrangement should provide
                        documentation.                         for the obligation to keep
                                                               underlying     documentation.
                                                               Jamaica could, for example,
                                                               ensure the maintaining of
The element is in                                              records      and     underlying
place, but certain                                             documents by prescribing tax
aspects of the legal                                           audits of persons having a
implementation of                                              turnover in excess a threshold
the element need                                               amount.
improvement
                        The Jamaican company and               The relevant laws should be
                        tax laws does not prescribe a          amended to specify the
                        compulsory retention period for        retention period of at least five
                        records other than financial           years in respect of accounting
                        institutions and other entities        records for all the entities
                        regulated    under anti-money
                        laundering legislation.
Banking information should be available for all account-holders. (ToR A.3)
The element is in
place
Competent authorities should have the power to obtain and provide information that is
the subject of a request under an exchange of information arrangement from any person
within their territorial jurisdiction who is in possession or control of such information
(irrespective of any legal obligation on such person to maintain the secrecy of the
information). (Tor B.1)
                        The powers of Jamaica’s tax            The tax authorities should be
                        authorities to obtain information      granted the power to obtain
The element is not      for exchange of information            information that is the subject
in place                from the taxpayer or third             of request under an exchange
                        parties are subject to there           of information notwithstanding
                        being a domestic tax interest.         Jamaica might not need the
                                                               information for its own tax



                 PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
               SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 79



                           Factors         underlying
Determination                                                      Recommendations
                           recommendations
                                                                   purposes.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information. (ToR
B.2)
                           Taxpayer’s rights are protected         It is recommended that certain
                           by the judicial procedures for          exceptions       from       prior
                           gathering    information.    To         notification be permitted (e.g.
The element is in
                           require in all cases that the           in cases in which the
place, but certain
                           taxpayer be first approached,           information request is of a
aspects of the legal
                           and thus notified, may unduly           very urgent nature or the
implementation of
                           prevent or delay the effective          notification   is    likely    to
the element need
                           exchange of information in              undermine the chance of the
improvement.
                           urgent cases.                           success of the investigation
                                                                   conducted by the requesting
                                                                   jurisdiction).
Exchange of information mechanisms should allow for effective exchange of information.
(ToR C.1)
                           Only1 of Jamaica’s 21 treaties          Jamaica should consider both
                           and its 1 TIEA provide for              removing its domestic tax
                           effective      exchange      of         interest and strengthening its
                           information to the standard.            international agreements to
                                                                   meet       the      international
The element is not                                                 standard,       including      by
in place                                                           incorporating text in its
                                                                   exchange       of    information
                                                                   articles    corresponding      to
                                                                   paragraphs 4 and 5 of Article
                                                                   26 of the Model Tax
                                                                   Convention.
The jurisdictions’ network of information exchange mechanisms should cover all relevant
partners. (ToR C.2.)
                                                                   It is recommended that the
                                                                   Jamaican           government
The element is in
                                                                   continue      to     conclude
place
                                                                   agreements with additional
                                                                   relevant partners.
The jurisdictions’ mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received. (ToR C.3)
The element is in
place
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties. (ToR C.4)



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80 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
                         Factors         underlying
Determination                                                   Recommendations
                         recommendations
The element is in
place
The jurisdiction should provide information under its network of agreements in a timely
manner. (ToR C.5)
The       assessment                                            Jamaica should act on the
team is not in a                                                recommendations noted in
position to evaluate                                            respect of other essential
whether           this                                          elements to ensure that
element is in place,                                            information requests can be
as     it    involves                                           responded to in a timely
issues of practice                                              manner.
that are dealt with
in the Phase 2
review




                  PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010
                                                                                     ANNEXES – 81




    Annex 1: Jurisdiction’s response to the review report*


           Jamaica confirms that the captioned report dated 25.6.2010 with
       additional changes on 22.7.2010 is an accurate reflection of the laws of
       Jamaica.
           We wish to indicate that Jamaica will give careful consideration to
       the recommendations made. In particular we have already started the
       legislative process of amending the Income Tax Act and the Revenue
       Administration Act to provide for the removal of domestic interest and
       to allow the tax authorities the power to provide information on all
       persons whether or not such persons are under a tax examination in
       Jamaica. It is anticipated that a Bill will be drafted to facilitate these
       amendments by early September 2010. The Parliamentary Process
       should begin thereafter.
           Please also be advised that the committee which oversees the
       reforms of the Companies Act, the Partnership Act and Trust Laws
       have also begun their review of the recommendations.
          Jamaica would like once again to extend thanks to the Global
       Forum and the assessors for this comprehensive assessment of our laws.
          Please be assured of our highest regard and commitment to
       advancing the work of the Forum.




            *      This Annex presents the Jurisdiction‘s response to the review
                  report and shall not be deemed to represent the Global
                  Forum‘s views.




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        82 – ANNEXES




          Annex 2: List of all exchange-of-information mechanisms
                                   in Force


                                                                                                     Date Entered
     Jurisdiction                Type of EoI Arrangement                      Date Signed
                                                                                                     Into Force

1    United Kingdom              Double Taxation Convention (DTC)             16.03.1973             31.12.1973
2    Germany                     DTC                                          08.10.1974             13.11.1976
3    Canada                      DTC                                          30.03.1978             02.04.1987
4    United States               DTC                                          21.12.1980             29.12.1981
5    Israel                      DTC                                          29.06.1984             13.09.1985
6    Sweden                      DTC                                          13.03.1985             07.04.1986
7    United States               TIEA                                         18.12.1986             18.12.1986
8    Denmark                     DTC                                          16.08.1990             24.10.1991
9    Norway                      DTC                                          30.09.1991             02.11.1992
               17
10   CARICOM                     Multilateral                                 06.07.1994             30.11.1994
11   France                      DTC                                          09.08.1995             21.05.1998
12   China                       DTC                                          04.07.1996             16.03.1997
13   Spain                       DTC                                          08.07.2008             16.05.2009




        17
               Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, St. Kitts
               and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.


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                                                                                     ANNEXES– 83




   Annex 3: List of all laws, regulations and other material
                            received



       Commercial Laws
        The Companies Act 2004
        The Co-operative Societies Act 1950
        The Friendly societies Act 1968
        The Partnership(Limited) Act 1853
        The Trustees Act 1897

       Taxation Laws
        The Income Tax Act 1955
        The Foreign Sales Corporation Act 1984
        The Hotel (Incentives) Act 1968
        The International Finance Companies(Income Tax Relief) Act 1971
        The Revenue Administration Act 1985
        The Transfer Tax Act 1971
        The Tax collection Act 1867

       Banking Laws
        The Banking Act 1992
        The Bank of Jamaica Act 1960
        The Financial Institutions Act 1992




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     Anti-Money Laundering Act/Regulations
      The Proceeds of Crime Act 2007
      The Financial Investigation Division Act 2010
      The Financial Services Commission Act 2001
      The Securities Act 1993
      POCA (MLP) Regulations 2007
      Bank of Jamaica Anti-Money Laundering(AML)/Combating the
      Financing of Terrorism(CFT) Policy 1999
      Bank of Jamaica – 2004 Guidance Note on the Detection and
      Prevention of Money Laundering and Terrorist Financing Activities.

     Other
      The Building Societies Act 1955
      The Insurance Act 2001
      The Jamaica Export Free Zones Act 1982
      The Legal Profession Act 1972
      The Limitation of Actions Act 1881
      The Trustees, Attorneys and Executors (Accounts and General) Act
      1904
      The Public Accountancy Act 1970
      The Record Office Act 1879
      The Record of Deeds, Wills and Letters Patent Act 1681
      The Unit Trusts Act 1971




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                                                                                     ANNEXES– 85




      Annex 4: Overview of Commercial Laws and Other
       Relevant Factors for Exchange Of Information



       Relevant Laws
           The Revenue Administration Act 1985 (the RAA) deals with the
       administration of the revenue department and provides for the creation
       of five administrative departments namely; Inland Revenue
       Department, Revenue Protection Department, Tax Administration
       Services Department and Customs Department. s.9(d) of the Act refers
       to safeguarding the interest of Jamaica in the negotiation of
       international taxation agreements. The negotiation of international
       taxation agreements is the responsibility of the tax administration
       services department.
           The Income Tax Act 1955 (the ITA) regulates the taxation of
       income of residents as well as non-residents in Jamaica. It is
       administered by Commissioners appointed under the provisions of the
       Revenue Administration Act 1955. Section 83 provides powers to the
       Minister to enter into tax treaties. Section 83(4) overrides the secrecy
       provisions imposed on the tax authorities by s.4 of the Act and allows
       disclosure of information to the authorities of other territories under the
       arrangement. It is also provided that the provisions of the arrangement
       shall have effect in relation to income tax notwithstanding anything
       contained in any enactment.
           The Companies Act 2004 repealed and replaced the previous
       Companies Act. It empowers the Government to regulate all company
       matters including formation, capital, functioning, audit, supervision,
       returns, mergers, takeovers and liquidation of companies.
           The Partnership (Limited) Act 1853 deals with the law relating to
       limited partnerships, i.e. partnerships where one or more partners have
       unlimited liability for partnership debts ("general partners"), and one or
       more partners have liability for those debts only up to the amount of
       capital they have subscribed ("special partners"). Limited partnerships



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86 – ANNEXES
     are not allowed to carry on banking or insurance businesses. Jamaica
     has no statute law on ordinary partnerships, i.e. partnerships in which
     all the partners have unlimited liability for the partnership's debts.
     Ordinary partnerships are governed by the common law of England
     which Jamaica inherited, and by the partnership agreement. A
     partnership may not have more than 20 members.
        The Registration of Business Names Act 1934 – This Act makes it
     compulsory for every person to register the business name with the
     Registrar of Companies of Jamaica.
         The Trustees Act 1897 provides for the, various powers and duties
     of trustees, power of the courts etc. Under this Act ‖ ―trust‖ does not
     include the duties incident to an estate conveyed by way of mortgage;
     but with this exception the expressions ‗‗trust‘‘ and ―trustee‖ include
     implied and constructive trusts, and cases where the trustee has a
     beneficial interest in the trust property, and the duties incident to the
     office of personal representative of a deceased person.
         The Securities Act 1993 governs the law relating to the business in
     securities including mutual funds. It provides for the creation of
     commission which is responsible for the general administration of the
     Act. It also provides for the creation and regulation of the central
     security depositories.
         The Proceeds of Crime Act 2007 (POCA) consolidated all
     Jamaican legislation with respect to matters related to money
     laundering and forfeiture. POCA permits any crime to constitute a
     predicate offence for money laundering. Section 92 provides that
     money laundering is an act comprising dealings of any kind with
     criminal property. Both criminal property and criminal conduct are
     defined by the POCA.

     Government authorities
          The Ministry of Finance and the Public Service (MOFPS)18 has
     overall responsibility for the Government‘s fiscal and economic policy
     framework and collecting and allocating public revenues. The MOFPS
     is responsible for the effective regulation of the country‘s financial
     institutions and its 14 divisions including financial regulation, corporate
     services, taxation policy, financial investigations and revenue
     protection.


18
      http://www.mof.gov.jm/


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                                                                                     ANNEXES– 87



           The Revenue Board, created by the Revenue Board Act 1981,
       advises the Minister of Finance on revenue matters. A major
       responsibility of the Board is the direction, coordination, inspection and
       monitoring of the functions of the Tax Commissioners. Other
       responsibilities are ensuring an effective and efficient revenue
       collection system. "Revenue" includes all taxes, levies, duties, fees, etc.
       imposed by law, and certain other non-tax sources. Tax compliance is a
       responsibility of the Board.
           Tax Administration19 - Jamaica's Tax Administration underwent a
       major restructure under the Tax Administration Reform Project in 1999
       and 6 tax departments were created:
            Director General's Executive Office - The Director General, Tax
             Administration, oversees and guides the operations of the Jamaica
             Tax Administration;

            Inland Revenue Department – It has full responsibility for all
             compliance, tax collections & taxpayer service functions;

            Jamaica Customs Department            has responsibility to collect
             revenue, facilitate trade and protect the borders of the country;

            Tax Administration Services Department provides the following
             centralised services for the tax departments;

            Taxpayer Appeals Department is responsible for processing
             appeals to decisions made by tax commissioners. They also have
             responsibility to process waiver applications ;

            Taxpayer Audit and Assessments Department brings together the
             audit & assessment functions of the former Income Tax, General
             Consumption Tax, Stamp Duty & Tax Departments and the
             Revenue Board.

           The Bank of Jamaica20 (BOJ) was created by the Bank of Jamaica
       Act 1960 and is the Central Bank of Jamaica. The BOJ supervises
       banks, merchant banks, building societies, Cambios, bureaux de change
       and remittance companies and agencies and has comprehensive powers
       of enforcement and sanctions. It ensures that institutions within the
19
          http://www.jamaicatax.gov.jm/
20
          http://www.boj.org.jm/bank_home.php



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88 – ANNEXES
     financial sector comply with anti-money laundering and counter-
     terrorist financing provisions (AML/CFT) and has issued the
     AML/CFT guidance note and FSC guideline for implementing the
     provisions of the POCA. The BOJ has supervisory oversight over
     institutions governed by the following pieces of legislation:
           Commercial Banks which are governed by the Banking Act;

           Near bank deposit-taking intermediaries, such as merchant banks,
            trust companies and finance houses licensed under the Financial
            Institutions Act;

           Building Societies / Institutions operating under The Industrial and
            Provident Societies Act which either take deposits and/or make
            loans.

         These statutes provide the legal and policy parameters for the
     licensing and supervision of financial institutions. The primary
     legislation consists of the Bank of Jamaica Act 1960, the Banking Act
     1992, and the Financial Institution Act 1992 and the Building Societies
     Act 1897.
         The Ministry of Industry, Investment and Commerce21 – This
     ministry is responsible amongst other things, for the Companies Act
     and Registration of Business Names Act, which are important for the
     purpose of this report. It is also the administrative and supervisory
     ministry for the company‘s office of Jamaica, registrar of co-operative
     and friendly societies and the Jamaica Free Zones.
         The Financial Services Commission (FSC) was established in
     August 2001 under the Financial Services Commission Act. It is the
     integrated regulator of financial services in Jamaica and administers the
     Insurance Act, Securities Act, Unit Trusts Act and Pensions
     (Superannuation Funds and Retirement Schemes) Act.
         The Registrar of Companies - Jamaica has a centralised registry
     of companies, the Registrar of Companies. The Office of the Registrar
     of Companies is part of the Ministry of Industry, Commerce &
     Technology. (Jamaica may clarify what is the correct name of this
     ministry, as website sows both names). The registrar of companies
     registers local and overseas companies, industrial and provident
     societies and individuals carrying on business in Jamaica. The registrar
     of companies maintains a website22on which the subscribers may view
21
         http://www.jis.gov.jm/commerce_science/index.asp
22
         http://www.orcjamaica.com/profile/

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                                                                                     ANNEXES– 89



       company documents, business names registration, company names
       registration, particulars of directors, change of directors and registered
       offices notices.
           The Financial Investigation Division23- This Division within the
       Ministry of Finance and the Public Service was established in
       December 2002. It focuses on the need to deter the use of Jamaica‘s
       economy for money laundering and other financial crimes thereby
       contributing to a stable financial sector and an investor friendly
       environment.
            The CFATF concluded the third round mutual evaluation of
       Jamaica in October 2005. In this evaluation Jamaica was rated partially
       compliant or non-compliant with 18 Recommendations. The CFATF
       follow- up report of March 2009 states that, any dealing which permits
       a person to benefit from the act of tax evasion would under POCA
       constitute money laundering offence. The findings of the CFATF
       relevant to the issue of exchange of information for tax purpose are
       listed below:
            Regulations 6 of The POCA (MLP) Regulations, 2007 specifically
             prohibits financial institutions from maintaining anonymous,
             fictitious or numbered accounts. Paragraph 93 of the BOJ
             (AML/CFT) Guidance note also deals with this issue;

            Regulations 11,12 and 13 of the POCA (MLP) Regulations
             requires procedures to be in place to ensure that the identities of
             both principals and agents are obtained, and the authorisations of
             agents are obtained in the case of transactions are conducted by a
             person on behalf of another;

            Regulation 13© of the POCA (MLP) Regulation , 2007 stipulates
             that satisfactory measures should be in place to know the identity
             of the settler, legal owner or other person who exercises effective
             control of the legal arrangement as the case may require, or the
             beneficial owner is established, in the cases of any transaction
             involving any settlements, trusts or other types of legal
             arrangements;

            Regulation 7(1) of the POCA (MLP) Regulations prohibits the
             continuation of the business relationship unless customer
             information is updated at least once every five years;

23
          http://www.mof.gov.jm/fid



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90 – ANNEXES
        Regulation 7(2) of the POCA(MLP) Regulations require customer
         due diligence measures comprising transaction verification
         procedures to be applied particularly in the circumstances specified
         in regulation 7(3) which include where there is a doubt about the
         accuracy of any previously obtained evidence of identity. The
         continuity of business relationship is prohibited if this requirement
         cannot be fulfilled by the financial institution.


     Record keeping
        Regulation 14 of POCA (MLP) Regulations, 2007 mandate the
         retention of both identification records and transaction records by
         financial institutions for the prescribed period of 5 years
         commencing from the date on which the relevant financial
         business was completed or the business relationship terminated
         whichever is later.

        Paragraph 46 of the BOJ AML/CFT Guidance Note also requires
         financial institutions to ensure that the due diligence checks and
         reviews and investigations are available to the competent authority
         and designated authority.


     Overview of the financial sector and relevant professions
         The financial services industry in Jamaica consists of commercial
     banks, merchant and trust banks, credit unions, building societies and
     other licensees under the Financial Institutions Act. The Ministry of
     Finance and Planning is responsible for the policy, licensing and
     regulation of deposit taking institutions under Banking Act, Financial
     Institutions Act and Building Societies Act.
         At the end of December 2008, there were 14 supervised deposit-
     taking institutions (excluding credit unions), consisting of seven
     commercial banks, three merchant banks (FIA licensees), and four
     building societies. The BOJ also has supervisory and licensing authority
     over Cambios (foreign exchange Traders) and bureaux de change. The
     number of approved cambio locations is 153 operated by 70 entities.
     The foreign banks have substantial presence in the commercial and
     merchant banking business.
         The Financial Service Commission is currently responsible for
     supervising and monitoring a total of 1,980 licensees and registrants as
     well as 522 pensions‘ funds and retirement schemes. The FSC, like the


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                                                                                     ANNEXES– 91



       BOJ has comprehensive powers of enforcement and sanctions and
       conducts examinations of and obtain information from its licensed
       institutions. The number of companies licensed to carry various
       businesses is: Securities dealer/investment advisors (individuals -eight
       and companies 49), Licensed insurance companies (Life- 4 and
       General-12), Licensed pension plan administrators -22.
           Jamaica liberalised its foreign exchange market by eliminating
       capital controls and the limits on access to foreign exchange by local
       residents in 1991 on repealing the foreign exchange control Act 1954.
       The exporters and other foreign exchange earners are allowed to hold
       local
       and foreign currency accounts for all payments. Foreign currency is
       allowed to be exchanged through licensed authorised dealers only. No
       approval is required for repatriation of profits and dividends.
       Agreements involving the payment of technical assistance fees,
       royalties, management fees, and trademark and patent fees must reflect
       arm's-length consideration for tax deduction to be available.
           The Jamaica Stock Exchange24 was incorporated as a private
       limited company in August 1968. The Exchange trades in securities,
       ordinary/common, preference and corporate bonds. Government bonds
       are traded in the Bank of Jamaica regulated over the counter market,
       principally by stockbroker members and are not listed on the Exchange.
       Stock broking is restricted to broker members who trade both as agents
       and as principals. Currently, over 50 companies are listed on the
       Jamaica Stock Exchange. The stock exchange has eleven listed stock
       brokers. The Jamaica Stock Exchange also has detailed rules relating to
       the submission of information by companies listed on the Exchange,
       including quarterly and annual reports and financial statements. These
       documents are publicly available from the Exchange or its website.
           The legal and accountancy professions are well regulated in
       Jamaica. The attorneys-at –law operate under the Legal Profession Act
       1972, and the Canons of Professional Conduct and Etiquette of the
       General Legal Council. They are required to register with the Registrar
       of Supreme Court of Jamaica as per the Legal Profession Act 1972. The
       non-compliance with the standards of conduct can result in suspension
       or revocation of the right to practice. The Legal Profession (Accounts
       and records) Regulations 1999 requires submission of annual accounts
       by members. The accountancy profession operates under a code of
       ethics issued by the Institute of Chartered Accountants of Jamaica,
       regulated by the Public Accountancy Act 1970. The law requires the
24
        http://www.jamstockex.com/index.php



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92 – ANNEXES
     registration by all public accountants providing services in Jamaica.
     The Jamaica has another Institute of Chartered Secretaries and
     Administrators, whose members provide services relating to company
     formation. Real estate dealers are governed by the requirements of the
     Real Estate Dealers and Developers Act, which are enforced by the
     Real Estate Board.




               PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – JAMAICA © OECD 2010

								
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