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Supervision Trust (English)

Frequently Asked Questions

According to article 1, paragraph 12 of the Foreign Exchange Regulation Curaçao and Sint Maarten (2010), an international company is:

"a public limited company or a private limited company established in the country of Curaçao or the country of Sint Maarten, whose statutory objective is pursued on behalf of and for the benefit of one or more non-residents of the company itself with funds belonging to one or more non-residents or the company itself, and whose issued shares are owned by one or more non-residents or such public limited company or private limited company are considered  non-residents pursuant to this Regulation."

In short, an international company is a legal entity, company, trust, or natural person which has its registered office or its actual place of business in Curaçao or Sint Maarten and that has been exempted from the provisions in Articles 10 to 16 of the Foreign Exchange Regulation Curaçao and Sint Maarten. A Foreign Exchange exemption is obtained if the activities of the company are exclusively aimed internationally.

The international company has a special status in the economic activities in Curaçao and Sint Maarten. After all, it is a locally established company that is considered a non-resident. This brings several advantages compared to resident companies.

For example, no foreign exchange exemption is required for capital transactions with non-residents, and no license fee is owed on payments to non-residents. Moreover, international companies qualify for a special corporate tax rate that is significantly lower than the rate for resident enterprises. Due to the advantages that an international company enjoys over a resident enterprise, an international company is prohibited from doing business with residents.

Therefore, an international company must exclusively focus its activities on non-residents. This is also explicitly stated in the foreign exchange license of such a company. This license is granted provided that the activities take place outside the country. This prevents unfair competition with resident companies. This means that international companies are, among other things, not allowed to offer products or services to residents, participate in resident  companies, or provide loans to residents.

Yes, establishing or assisting in establishing an international company is considered a trust service under article 1 of the National Ordinance on the Supervision of Trust Service Providers (NOST). Providing this service requires a license or dispensation in accordance with articles 3 and 2 of the NOST, respectively.[1]

 

[1] As of May 16, 2024, the updated National Ordinance on the Supervision of Trust Service Providers (“NOST”)  that came into force states that an “international company” is also defined as:
Entities incorporated under Curaçao law and established in Curaçao, of which the activities occur outside of Curaçao, and which do not qualify for an exemption from the provisions of articles 10 to 16 of the Curaçao and Sint Maarten Foreign Exchange Regulation.

 

If you act as a legal entity or a natural person in one of these roles at an international company, you also fall under article 1 of the NOST. This is only permitted if you have obtained a license or dispensation under the NOST.

A provider of trust services must comply with requirements concerning, among other things, integrity and sound business operations. This means that the trust service provider must implement procedures and organizational measures to handle incidents with integrity and promote a corporate culture where integrity is central. Additionally, they must screen their staff, especially those in integrity-sensitive positions.

Furthermore, a trust service provider must ensure that neither they nor their employees become involved in criminal offenses that could damage trust in their office or in the financial markets in general. To ensure this, the CBCS can establish generally binding regulations.

Moreover, the trust service provider must comply with regulations issued by the CBCS for combating money laundering, financing of terrorism, and proliferation. If it is found that these standards are not met, the CBCS has the authority to take supervisory measures.

 

A criminal offense is an act that is considered a crime or an offense according to the law. It encompasses a wide range of behaviors, ranging from minor violations such as running a red light to serious crimes such as theft, fraud, or violence. Criminal offenses are described and punished in the Penal Code and other specific laws.

Upon receiving signals about potential criminal offences committed by international companies, the CBCS immediately contacts the trust service provider to obtain further information.

Based on the information received, the CBCS will take subsequent steps such as holding discussions with the management of the trust service provider and, if necessary, conducting on-site i examinations. Depending on the findings and results, the CBCS will decide on further actions or potential measures against the trust service provider, which may include giving instructions or warnings, imposing an order subject to an incremental penalty, or levying an administrative fine.

Complaints are a crucial source of information for the CBCS's supervisory activities. It is essential for the CBCS that the public can submit complaints and reports concerning financial institutions. When the CBCS receives a complaint or report notification, it assesses the seriousness and determines whether further investigation is necessary. In some cases, a single signal or report can be sufficient to initiate an investigation due to its (potential) impact.

With the complainant's permission, the CBCS can forward the complaint to the financial institution involved, if deemed necessary. In such cases, the complaint form completed by the complainant is shared with the financial institution, requesting a response. Based on the CBCS's investigation and the institution's response, the CBCS determines the necessary actions. This may involve urging the institution to tighten specific internal procedures, rectify any injustice towards the client, and implement measures to prevent future occurrences. Moreover, the institution will be required to periodically inform the CBCS about the status of the resolution of the case.

The confidentiality obligation to which the CBCS is bound somewhat prevents it from sharing specific information about the investigation results conducted in response to received complaints with the person who filed the complaint.

If the CBCS (e.g., through media information, court rulings, or information exchange with other (supervisory) authorities) finds that an international company has committed criminal offenses, it has a range of supervisory measures that can be taken. The approach and implementation are described in the enforcement policy of the CBCS as published on the CBCS website. These measures include issuing instructions, administrative sanctions such as an order subject to an incremental penalty or an administrative fine. The CBCS can also file a report with the Public Prosecutor of a criminal offense and, in certain cases, even revoke the license or dispensation granted to the trust service provider.

It is important to note that these supervisory measures are directed at the trust service provider that holds the license and/or the individuals who determine its policy (policy makers), or at natural persons who have a dispensation. They are not directed at the international company for which the services are provided. A trust service provider can offer services to an international company in the following capacities:

a. As a director
b. As a local representative
c. As a trustee

These different capacities help determine the enforcement measure the CBCS will take against the trust service provider. Acting as a director of an international company that commits a criminal offense requires different measures than when the management service provider acts as a trustee. In the first case, the director provided by the trust service provider is (co)liable for criminal offenses committed by the international company (these are attributable to him/her in his/her role as a director of that international company). In such a situation, the CBCS might, for instance, require the trust service provider to terminate the relationship with that director. In the case of a trustee, it might suffice to instruct the termination of the relationship with the client, i.e., the international company.

Thus the measures to be taken depend on the specific role the trust service provider fulfills and the level of responsibility for the activities of the international company.

The CBCS monitors the expertise and integrity of the directors and (co-)policy makers of the trust service provider. They can be re-evaluated if there is reason to do so. The CBCS expertise and integrity screening does not extend to employees of a management service provider who occasionally act as directors of an international company.

However, the CBCS ensures that the trust service provider ensures these employees act in accordance with policy procedures and organizational measures that guarantee the integrity of incident handling and promote a conscious corporate culture regarding integrity. This aims to prevent the trust service provider and its employees from becoming involved in criminal offenses or other socially unacceptable actions. If these control measures prove insufficient in practice, the trust service provider must take appropriate measures. Institutions take action when their employees commit a criminal offense and inform the CBCS according to the guidelines for incident reporting.

If a trust service provider no longer complies with the requirements set by the CBCS regarding expertise and integrity, as well as the NOST, the National Ordinance on Identification of Clients when Rendering Services (“NOIS”), and The National Ordinance on the Reporting of Unusual Transactions (NORUT), including regulations issued under the NOST, NOIS, and NORUT, the conditions included in the license or dispensation document, and the instructions given by the CBCS based on these, the CBCS has the authority to revoke the license or dispensation (article 2 NOST) under article 5 of the NOST.

Last updated: 19.06.2024 11:06