At the well-attended Annual General Meeting, held on 3 July 2019, the membership unanimously elected their new Board for the next twelve months. Joey Imossi was elected as the Chairman, Nick Cruz as Vice-Chairman, Mark Bridge as Secretary, Subash Malkani as Treasurer, and Kyra Romano-Scott, Lesley Nuttall, Raquel Moss, and Charles Bottaro as Board members.

Outgoing Chairman’s Report (Nick Cruz)
This year has seen yet another year of seemingly unending change in the field of Trust & Company Management. However, we remain a substantial employer, one of the largest of the founder associations of the Gibraltar Finance Centre Council, and still contribute very substantially to the Government’s tax revenue both directly by way of corporate tax and by way of employees paying PAYE. Despite those who predicted our demise almost 20+ years ago when I joined this Board, we remain strong and resilient. I attribute this to agility, an acceptance of the new world order in our field and good cooperation with other Industries and the Government of the day and the regulatory bodies generally. That level of cooperation is to be encouraged although we have never shirked a challenge nor hesitated when fighting our corner to safeguard our industry’s interest. This should be continued.

Register of Beneficial Owners (4AMLD)
We have faced the implementation and first full year of the Register of Beneficial Owners and whilst it has been reported by the Registrar that there has not yet been full compliance the figure does exceed 80%. We have encouraged the Registrar to adopt a strict line with those who knowingly do not comply and sensitivity with those who try but are hampered by genuine reasons. A level playing field is all ATCOM has ever asked for both across jurisdictions and within and so this must be applied to this Register.

It is interesting whether the 5AMLD will apply to Gibraltar if Gibraltar leaves the EU on the 31st October 2019 which now looks ever more likely. This would impact on the register I believe when it comes to discretionary trusts with no tax consequences. At least that is my understanding. I strongly believe that in a post Brexit Gibraltar that is not bound by EU laws we should take advantage of anything that would otherwise not be available to us now because of the imposition of EU law. To this end we should consider instructing Philip Baker QC of Fieldtax Chambers who is so respected to carry out a thorough review of our laws post Brexit. We should then lobby Government with our conclusions armed with that advice. Of course, leaving the EU does not give us licence to be less compliant in many fields including AML but a level playing field does not have the same meaning when EU law does not apply to us. I should add the prudent management of our finances generally and this last year whilst I have chaired does allow us to spend money where required in areas such as this.

We have met with James tipping the Finance centre Director and Annette Perales and Heidi Bocarisa and have reviewed GFSC Guidance notes that suggested that every GFSC licenced TCM had to carry out an independent external type of audit of their AML procedures. The outcome is not finalised but a good and sensible meeting recognised the need to be proportionate and we expect that the nature and scope of the audit and the persons who need to conduct it will be reasonable and something ATCOM can work with.

ATCOM played an important part in engaging with Money Val this year in their audit of Gibraltar, both individual licensees and the ATCOM Board for which we were thanked by Albert Isola the Minister with the responsibility for seeing this through.

This has been the most time consuming and engaging project of the last 18 months for all in the GFCC and specifically the sub groups established by the GFCC Chairman Marc Ellul. Needless to say, ATCOM has played its part. I have formed part of what I consider the most controversial and difficult reforms and section that covers Sanctions, Enforcement, Publications, and the establishment of a Decision-Making Committee (DMC) within the umbrella of the GFSC Commission but consisting of outside appointees.

The draft Finance Services Bill reflects many of those changes albeit that we are still expecting some further changes. There are more checks and balances on the GFSC than ever before. Powers to apply sanctions are constrained by a level of independence from a new DMC, ability to publish are much constrained. Powers on the relevant Minister to exert control over the executive of the GFSC when required are enhanced including power to remove its CEO in certain circumstances. The legislation is not perfect nor near to perfect and there remain areas of some disagreement between the Industry and HMGOG but it is a very important progressive step in most areas (not all) that will introduce simplicity in navigation of consolidated legislation and very much required checks and balances on a regulator that in the last few years has in the view of almost anyone in the industry acted without proper reflection and at its kindest disproportionately. The relationship of trust between industry and regulator has been strained to almost breaking point. Many would argue it has completely broken down. This legislation will assist in returning some balance and confidence. For my part I believe that the relationship with ATCOM has not broken down and recent meetings with Annette Perales and Heidi Bocarisa give me every hope that with some effort on both parts it can be restored in due course.

Fundamental to our success and resilience is our ability to consult, seek support, persuade and engage.

It would be remiss of me not to specifically mention the extraordinary efforts of the Minister for Commerce with the brief for Financial services to work with ATCOM on any matter however small. Albert Isola has proved in my opinion over his 5 to 6 years to have been the most constructive and engaging and responsive occupant of that post. Whilst ATCOM and the Minister have not always agreed he has always worked with us wherever possible and I would like to thank him for his tireless support. This has been a key component in our ability to navigate the many challenges we have faced and continue to face. This has applied equally to the LRP. Moreover, the relationship with James Tipping and his team is excellent. We are grateful to their efforts and consultative approach.

We have developed a good relationship with the Income Tax Office and John Lester the new Commissioner. We need to engage and work out some matters that still cause unnecessary friction on tax penalties for struck off companies.

I have to say unhesitatingly that ATCOM’s relationship with other members of the GFCC remains intact and never better. I believe as a jurisdiction we work best when all our component parts pull in the same directions and I believe this to be the case or almost the case. More work can and should be done here.

Notwithstanding our efforts there can be no denial that our market has and will continue to change. Doing business in the private client world in a transparent and very regulated environment means it is costly complicated and we all appear to have almost as many compliance-based work as fee based work. HMGOG and others must be open eyed about balance. We all want a compliant industry and indeed there is no alternative but we should ensure that we do not kill off an important sector with over regulation and unnecessary burdens. Other new sectors sometimes promise a lot, appear very sexy, and yet are still to prove themselves. The grass is always greener on the other side but be careful is my message. Consolidation in TCM is happening and inevitable, but whatever emerges it should be supported. There is a place I believe for TCM in the future. Substance over form, will be required. We should as a jurisdiction keep an eye on tax and with UK threatening to reduce their tax rates to 12.5% perhaps even at 10% we are not so attractive. Would 8% originally discussed by the last HMGOG be interesting? The need in this transparent world for Double Taxation Treaties is urgent and I would ask HMGOG to secure such an agreement with the UK as soon as possible. With one secured with Spain (irrespective of people’s views on its merits) the door is open for more. We should look to other markets not just North. Africa is on our door step and as the fastest growing continent whilst we need to be cautious, we should be curious at least.

Finally, I thank my Board for their continued support. I will be stepping down from the Chair in favour of Joey Imossi the Vice Chair with a view to leaving the board of ATCOM in the next AGM.