Page 38 - Pay Magazine s2014

36
pay world
Rockin’ E-Money on Gibraltar
pan-European legislation. “EU laws are made in Belgium by people who want to liberalize banking and payments, but they don’t necessarily understand prepaid because of its newness,” he explains. “The problems for local regulators, like the FSC, come in the legislative gaps the EC hasn’t really thought about— like, how do you handle funds in flight and multi-program funds management and reconciliation? The problem is the legislation often doesn’t reflect the business model. The fortunate news is that the FSC recognizes this and is working with the e-money opera- tors to address it.”
Patti Brands, who moved to Gib- raltar from South Dakota in December 2012 to help manage The Bancorp’s e-money business, calls the FSC very collaborative. Referring to the FSC’s past issues with a Gibraltar-based e-money licensee, she says, “The FSC learned a lot from that experience and has made a conscious decision to regulate but not overregulate. They actively want us to help them understand how prepaid works and how we’d address issues.”
Paschini notes that regulators, along with commercial businesses, are challenged by the pace at which payment systems are chang- ing. “In this evolving payments environment, we’re all always learning,” he says. “And, it’s en- couraging when government and your regulator are willing to learn with you.”
The Reputation Issue
An issue that hovers over discus- sions of the desirability of obtaining an e-money license in Gibraltar
is reputation. Oftentimes, the regulatory environment of offshore jurisdictions is viewed skeptically; the thought being that offshores are soft on the rules. Gibraltar’s
aggressive approach to personal and corporate taxes,5 and its close association with online gaming suggest to some that Gibraltar may be one of these “lax” off- shore jurisdictions.
The government of Gibraltar
and those doing business there don’t back down from the issue
of discussing Gibraltar’s reputation. In fact, they relish the discussion because they want to dispel what they consider to be the myth, and they believe they have a good story to tell.
Paul Astengo, senior executive with the Government of Gibraltar’s Finance Centre Department, em- phasizes that Gibraltar is well regulated and internationally cooperative. “We’re as compliant and transparent as any EU member state, and more so than most,”
he says. As evidence, he notes
that Gibraltar signed the U.S.
and U.K. FATCA (Foreign Account Tax Compliance Act) and “trans- posed” (i.e., passed appropriate implementation measures) the
EU’s Payment Services Directive and the 2nd E-Money Directive
in a timely manner.
“The world has changed and Gibraltar has changed,” he adds.
“A number of years ago, our zero corporate tax policy contributed to the perception that we were a lax offshore jurisdiction. We recognized that and instituted a flat 10 percent corporate tax rate. We’re deadly serious about building Gibraltar’s reputation as a respected onshore
gibraltar Wants a FeW good e-Money issuers
The government of Gibraltar wants quality, not quantity, in the e-money issuers it attracts. Gibraltar Fi- nance’s Senior Executive Paul Astengo points to Gibraltar’s establishment as an international hub for insurance and online gaming as the model for the e-money businesses it hopes
to attract.
“We’ve built a platform here for technology-based businesses that don’t need thousands of people,” he says. “We’re looking for the best global brands that genuinely are taking a long-term view. We want them to stay and grow with us
and, in turn, we’ll add luster to their branding.”
Key reasons to support Gibraltar
as the jurisdiction of choice for
an e-money license, according to Astengo: its comforting Britishness, English as the official language,
a parliamentary democracy with
a long history, part of the European continent, strong regulatory en- vironment and favorable cost structure—including taxes, labor and real estate.
Boris15 / Shutterstock.com