Letter to the Committee from Mr Alan Savery,
Banking Supervisor, St Helena
1. I understand that you are conducting
an enquiry into the FCO and its responsibilities in relation to
the Overseas Territories including the regulation of financial
sector in those territories. Clearly as the Banking Supervisor
for St Helena I have an interest in this enquiry.
2. I advised the Government of St Helena
on the setting up of a commercial banking operation there, managed
the implementation of the plans, drafted the Banking Ordinance
and was appointed Banking Supervisor in 2003. The Bank of St Helena
was established in 2003 and has been very successful in providing
the residents with an efficient and cost effective service.
3. In addition I currently have a contract
with DFID to draft a Financial Services Ordinance for St Helena.
4. My experiences in dealing with Government
Officials in St Helena and the FCO have not always been satisfactory.
The main problems have arisen where the officials concerned did
not have a sufficient technical grasp of the issues. This has
resulted in long delays particularly as a result of the FCO having
only one person with the necessary technical skills to advise
them on such matters and that person trying to carry out a full
time job in the Cayman Isles at the same time.
5. Another problem area for me which is
particularly acute at present is the turnover of key personnel
in the Government of St Helena. It can be difficult to get Government
Officials to focus on important issues when they know that their
term of office is drawing to a close. At present this problem
is exacerbated by the fact that the term of office of all the
key officials appointed by the FCO (including the Governor) comes
to an end over the next few months. I fail to understand why when
these officials are appointed on fixed term contracts there is
consistently a significant time interval between someone leaving
and their replacement being identified. My key contact on most
issues is the Financial Secretary. It has been known for at least
six months that she will not renew her contract when it expires
at the end of September but the recruitment process to find a
successor only started a few weeks ago. Whereas in such a key
role there really ought to be a handover period, it is quite clear
that there will once again be a significant gap before a successor
is appointed.
6. Although St Helena has banking legislation
and a regulatory regime for banks it has at present no legislation
relating to other financial services or money laundering. There
have been indications that certain parties would like to take
advantage of this situation and one website described St Helena
as the "last unregulated financial centre in the world".
To deal with this situation I have been trying to get financial
services legislation introduced for almost three years. The delays
in doing so have largely been with the FCO and DFID. However,
as noted above I am currently working on draft legislation and
will be visiting the island in September to discuss this. One
of the problems I have had with this work so far is persuading
FCO/ DFID officials that as a very small community and economy
St Helena does not need (and cannot afford) the type of regulatory
regimes that are necessary in the developed world. In creating
a regime for a country like St Helena it is extremely important
to have a thorough understanding of the needs of the local economy
and the manner in which business is done there. I think I have
proved this point through the successful establishment of the
bank and an appropriate level of regulation but am still fighting
this battle in relation to financial services.
7. If I can be of any further assistance
to your enquiry I would be happy to help.
20 August 2007
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