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ISSUE 3

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JANUARY 2009

Gaming Code Review part 2

Gaming Code cont.

In this, the second of two articles covering the proposed new gaming code of practice, we continue to review the most important points of the proposal.

Site content

by Steven Caetano

Operating Procedures Internal Controls

The Act creates an obligation for licensees to establish an effective system of internal controls and procedures. Although it is recognised that operators have adopted different standards for different procedures and internal controls pursuant to their individual circumstances and business requirements it is necessary for operators and industries at large to make such information readily available to the Gambling Commissioner. Operating procedures and controls should be proportionate to the scale and nature of the licence holders’ gambling activities. Generally speaking, these should address: Corporate structure and reporting; Internal and external audit arrangements; Accounting and financial control standards; Customer and transaction controls including security; Business continuity/disaster recovery plans; Antimoney laundering arrangements; Age verification procedures; Problem gambling and self-exclusion policies; Customer complaints arrangements; System testing and security arrangements; and Web content; Needless to say, a comprehensive published operating procedure manual or internal controls booklet is considered as basic good governance and will facilitate internal audit by the Gambling Commissioner.

Minimum Age for Gambling

by Steven Caetano

people may now access remote gambling facilities (including mobile gaming) A potential requirement of the Code could inclusion of the above information on the cause the operator to display on each homepage only is now seen as sufficient. homepage a link or links to a page that As a consequence, the final version of the includes:Code could require Licence Holders to ensure that these motif emblems and those (a) Full name of the licence holder and associates with problem gambling advice address from which it carries on and any other warranty assurance or business pursuant to its Gibraltar warning links or terms or conditions are licence; displayed on every page preceding and (b) A statement that the licence holder following the actual betting pages. is licensed under the Act by the Mobile Gaming Gibraltar Licensing Authority or Government of Gibraltar; Given recent trends in the technology and

and

the Regulatory Return is seen as a primary indicator of the licensee’s scale and range of activities to enable adequate supervision. Suitable security and confidentiality measures would be applied by all parties concerned in accordance with applicable data protection and privacy laws. It remains to be seen whether the industry will concur with the Gambling Commissioner that quarterly as opposed to bi annual or annual returns are adequate enough, and quarterly returns could be seen as disproportionate, especially when the Gambling Commissioner is already empowered under the Act to request any type of information related to the gambling activities taking place at any time on reasonable notice.

Data Protection Measures

The Data Protection Act 2004 applies to all Licensees. The final version of the code Age verification measures should be in may well regurgitate the main obligations place and these include, as a minimum, of the Data Protection Act and related individuals’ names, age and address. All privacy provisions. operators are expected to take reasonable steps to prevent a person under the Complaints minimum permitted age from All Licence Holders are required to participating in gambling activities and promptly enquire into any complaint these also include free play. Licence about a gambling transaction made to holders are expected to take reasonable them by a participant or referred to them measures to test the effectiveness of their by the Gambling Commissioner. systems and permit the use of parental Wherever possible, complaints should be blocking and filtering systems. investigated by the Operator and brought Transaction Record Keeping to the attention of the Gambling and Provisional Accounts Commissioner but only if the Licence The final version of the Code could Holders’ internal complaints procedures require each licence holder to provide the have failed to resolve the issue at first Gambling Commissioner with quarterly instance. Exceptions to this would include statistical financial returns in respect of very serious complaints involving each licensed activity. The data comprising substantial sums of money or issues of

public interest. In this case, it is recommended that the complaint or issue incapable of being resolved be brought to the Gambling Commissioner’s attention at the earliest available opportunity. Kindly note that the term “Gambling Transaction” in this context is given a broad interpretation including, the wide administration of gaming accounts, marketing and any matters designed to affect the gambling transactions themselves. In addition, Licence Holders will be expected to have in place a system for recording and examining customer or third party complaints. This should include adequate resources to address complaints expeditiously, access to an independent adjudication process for appropriate disputes and a means of maintaining a record of all complaints that can be made available to the Gambling Commissioner as and when reasonably required.

Registration of Participants The Act requires operators to ensure that all their players are registered with them in the form specified under the Act (and indeed the Licence Agreement). This is a minimum standard imposed by both the terms of conditions of Licence and the Act and requires the players full name, residential address and age. Needless to say, this information must be kept by the operator in accordance with data protection principles currently applicable. Random checks and dip sampling of accounts by the Gambling Commissioner and other examinations would be subject to proportionate and ad hoc recording.

JANUARY 2009

ISSUE 3

mobile, telephone gambling a reminder that the gambling is provided under the agreed terms and conditions on the website should be acknowledged by the player.

www.gibraltarlawyers.com

Similarly, mobile phone gambling may only draw on funds credited via the parent website or by voice call arrangements where the Customer Services Operator has sight of the player’s gambling account and history. Therefore, it is a condition precedent to the use of mobile phones in gambling under the new Code to conduct every registration, procedure and avail oneself of the terms and conditions of methodology by which gaming is currently gaming through a computer in the offered to the public at large the proposed traditional sense. code of practice recognises the use of This article is necessarily limited in its mobile telephones and notes the scope and, in light of the fact that the additional challenges presented by this subject matter of the article is currently in method of remote gambling. proposal form, regard must be had to the

(c) A statement that the licence holder is regulated under the Act by the Gibraltar Gambling Commissioner (in this regard the final version of the Code could require a live link be set up to the GRA site); and (d) A statement in respect of the permitted age for gambling. Therefore, it is regarded as good practice to include the emblem of the Government of Gibraltar as a link to the Government website and a separate link on the motif of the GRA to the GRA website which would serve as a means of indicating to users that the licence holder is indeed regulated by this body in addition to being licensed by the Government. Given the complexity of various Licence Holders’ websites and web operating structures and given the diversity in which

It is likely that the code will impose preconditions to facilitate mobile gaming. For example, operators may only allow players to use mobile facilities if the player has first registered to play via the licensee’s website and in doing so acknowledges that gambling by mobile phone should be done in conjunction with an internet account and not in isolation of it. This would mean in practice that the player will have to register via a PC. In particular new deposits to the account should only be possible through the website or through voice communication with a live agent. In addition, at the commencement of any

its continuing success on the international stage and of the growing number of awards its various teams are attracting in a wide range of practice areas. ISOLAS has ranked and continues to rank consistently as a

By Christian Rocca

possible changes that may be effected to the actual code. ISOLAS will continue to monitor developments in this area and will continue to keep its clients and partners up to speed on any developments.”

ISOLAS recognised once more ISOLAS has recently been informed of its nomination as “Best Banking and Finance Team-Gibraltar & Spain 2009” by European CEO Magazine. In addition to this nomination, ISOLAS is very proud of

Communiqué Introduction

leading law firm in various fields, including M&A, Banking and Shipping, in the most prestigious legal directories such as Chambers Global, Legal 500 and European Legal Experts.

Associated with

www.gibraltarlawyers.com Portland House Glacis Road PO Box 204 Gibraltar Tel +350 200 78363 Regulated by the Gibraltar Financial Services Commission. Licence Numbers FSC00277B FSC00276B

New Year is a time for change, hope and hard work. Looking back to 2008 and, in particular, the last few months, there have been a number of important developments for Gibraltar Participants from the 24hr and ISOLAS which, Relay For Life, Gibraltar of course, are covered for Cancer Research in the third edition of our newsletter, the Communique. I’m also very happy to note that this publication is going from strength to strength, with a growing number of partners and clients asking to receive it as soon as we print it. What’s more, we’ve had a very helpful response from our readers as to how we might improve and enhance the Communique. In response to that, this edition includes an article from one of our professional partners, Credit Suisse, about cash investment options in the current financial crisis environment. In future editions we will be continuing this partnership and would be grateful to hear from any reader who might have an idea for an item in our Communique. Simply let us know and we’ll be glad to consider it. An important development in the Gibraltar story came on the 18th December 2008 in

On a personal level, I’m very proud of the firm’s participation in September in the very successful 24hr Relay For Life Gibraltar, organised by Cancer Research UK. the shape of a judgment of the European Court of First Instance annulling a decision previously made by the European Commission in respect of Gibraltar’s proposed tax reform. Our article on this deals with the details and explains how important this decision is for Gibraltar’s future as an International Finance Centre. On a personal level, I’m very proud of the firm’s participation in September in the very successful 24hr Relay For Life Gibraltar, organised by Cancer Research UK. The event was extremely well attended and ISOLAS fielded a team of more than twenty participants who, over a 24hr period, took turns to lap the athletics track at Victoria Stadium. As part of our continuing participation in events of this nature a few members of the team and I have been contemplating a challenge to raise funds for the PJ Isola Foundation. On the cards is a long distance charity cycle so watch this space for news of our training and fund raising.

Finally, I hope that 2009 brings the recovery and stabilisation of the financial markets and the confidence which, during the latter part of 2008, dropped to unprecedented levels. We remain at the service of you and your clients and look forward to a 2009 full of prosperity and positive development.

In this issue Page

1. Introduction 2. Cash Is King 3. Arresting Ships In Gibraltar Court Of First Instance Decison 4. Protecting Their Own Pillars Of Hercules 5. Gaming Code Review Part 2


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ISSUE 3

JANUARY 2009

Cash Is King by Yan K Delgado, Trino Cruz and Carlos M. Martins,

With customer demand for cash-plus returns, is there an increasing role for liquidity funds to play above holding cash on deposit? And what should investors look for when it comes to, say, 30-day access? Are they simply a product made of short duration bonds? Are there any hidden risks that investors need to be aware of?

Arresting Ships In Gibraltar

Credit Suisse

by Christian C. Hernandez

Gibraltar has long been acknowledged as one of the premier arrest jurisdictions in the world, and its success is due to a number of factors. The certainty of law, ease of procedure and a large volume of shipping traffic allied with the Gibraltar port’s comparatively low port charges give Gibraltar the edge as an arrest jurisdiction in the Mediterranean. Gibraltar’s legal system is based on the common and statute law of England & Wales and, therefore, all requirements relating to the information, documents and undertakings required to arrest a ship in Gibraltar mirror those of the English system. Importantly, the Supreme Court of Gibraltar’s track record illustrates the speed and efficiency with which shipping matters are dealt with, particularly in the case of uncontested matters which are commonly disposed of in a matter of weeks.

dramatic swings in the Net Asset Value of the fund if interest rates move), with no more than 5% in any one underlying, though generally the funds try to maintain this at less than 2%.

Strict limits on an individual underlying are important in order to obtain as much diversification as possible. Diversification is not The current uncertainty in financial markets has limited to the number of investments, it is crucial prompted many investors to increase cash holdings in the event of the insolvency of an issuer. whilst continuing to observe the market As the investment vehicles are non-UK OEIC’s, environment carefully. They are seeking to any income arising or gains on disposal are taxed maintain flexibility in order to re-invest at short according to the rules for “offshore funds”. notice and aiming to maximise returns but Distributing share classes are taxed as offshore maintain liquidity. funds with distributor status. If the owner is a UK More conservative investors who have always been heavily exposed to cash, have more recently been reappraising their cash holdings, and looking for greater diversity, often moving away from deposit accounts to other more esoteric options.

resident individual paying tax at the highest rate in the UK, then any interest is taxed as a distribution from an offshore fund (at 32.5%). Accumulating share classes rolls-up the interest, with any benefit arising on disposal of the units or shares. For a In the past, investors tended to rely on a limited UK higher rate taxpayer, the disposal is taxed at number of options; various term deposits would 40%. It is therefore important investors consider normally have delivered the required returns, but these facts when investing in a liquidity fund.

It should be noted that only claims which give rise to an action in rem i.e., a claim which gives rise to an action against the vessel itself, will permit a claimant to arrest a ship. Claims giving rights to an action in rem

government bonds. A recent development is a new kind of liquidity fund which should especially appeal to those investors who do not want any corporate exposure, but still do not want to own individual government bonds. These new liquidity funds exclusively invest in government debt and repurchase agreements backed by government debt in Euros, Sterling and U.S. Dollars. Given that all The breadth of underlying investments in a the debt is issued by European and U.S. liquidity fund means risk is spread across a very governments these funds offer a very high level of diverse portfolio of financial instruments, but security, with a spread of exposure normally only investors should not view liquidity funds as a attainable by the wealthiest of investors. replacement for traditional deposit accounts, as they do not benefit from the Generally speaking, Credit Suisse would advise same protections under the Financial Services clients against keeping cash in one single Compensation Scheme. The value of investments instrument. A combination of liquidity funds, and the income derived from Liquidity funds can fiduciary deposits, onshore cash-based insurance obviously fall as well as rise, and should an investor bonds, and inflation linked-government bonds, as incur a loss, they may not recoup the original well as straight forward term deposits is a preferable solution. amount invested.

Recent events have highlighted the importance of superior credit ratings and diversified risk. the credit crunch and some significant exposures to the downturn in the asset-backed security markets, clearly illustrated the requirement for diversification.

Many investors have found attractive opportunities in the higher interest rates offered by liquidity funds. Most liquidity funds are structured as Open Ended Investment Companies (OEIC’s), and the majority are based in Dublin or Luxembourg. Liquidity funds aim to provide an investment return that is consistent with a very high degree of security of capital and liquidity. They are designed for short term investment with instant access and a Liquidity funds have proven to be attractive in the Readers are advised that Credit Suisse does not competitive yield. corporate environment, where Finance Directors provide tax advice, and investors are encouraged to seek independent tax advice. Investors acquire units or shares in a particular are looking to maximise returns and access funds fund where the capital is invested in various on a daily basis. financial instruments, including overnight deposits, short term bonds, floating-rate notes, commercial paper, certificates of deposit and even asset-backed securities, spread across a wide range of high quality financial institutions, sovereign and corporate issuers.

More recently, we have seen the popularity of the accumulating share classes’ increase with UK Resident Non-Domiciled investors who are not prepared to pay £30,000 flat rate charge to benefit from this status. The accumulating share classes allow investors to roll-up any interest and defer the All these instruments are associated with taxable event until they actually sell their units. counterparty and credit risk, and whilst most have An alternative to liquidity funds and deposits managed to avoid difficulties in the asset-backed would be investments in inflation linked market, some recent cases have illustrated that a government bonds which compensate for default of one or more of the underlying issues can increased levels of inflation. These bonds are have a serious impact on the mark-to-market especially interesting in light of the current valuation of the liquidity fund concerned. forecasts for inflation and can add value to a Recent events have highlighted the importance of portfolio where suitable for a client. In addition, superior credit ratings and diversified risk. Credit the lack of taxation on the final redemption Suisse recommends a variety of liquidity funds to amount considerably enhances the gross equivalent clients, each have an AAA rating, and a short term returns when comparing the overall returns to Credit Rating of A1/P1. Of the underlying bank and building society accounts. investments, none can be more than 13 months to Another option exists half way between the maturity (longer maturities could result in standard liquidity funds and inflation linked

This article was written several weeks ago, in advance of the recent turbulence experienced in the financial markets. As a result, many clients have become considerably more conservative in their attitude to risk, moving their balances from cash or money market funds to gilts. Liquidity funds have seen a reduction in their balances, but in most instances this is matched by an increase in similar funds where UK, US or Euro Government Bonds form the basis of the underlying investments. It is important if you are considering liquidity funds to not only review the underlying investments held, to make sure there is nothing of a toxic variety, but also to establish the levels of daily liquidity within the Fund and the weighted average maturity, should you need to exit quickly.

(a) any claim to the possession or ownership of a ship or the ownership of any share therein; (b) any question arising between the co-owners of a ship as to the possession, employment or earning of that ship; (c) any claim in respect of a mortgage of or charge on a ship or any share therein; (e) any claim for damage done by a ship. (maritime lien); (f ) any claim for loss of life or personal injury in respect of a defect in a ship, neglect or default in navigation, management of the ship, loading, carriage or discharge of goods, embarkation, carriage or disembarkation of passengers; (g) any claim for loss or for damage to goods carried in a ship; (h) any claim arising out of an agreement relating to the carriage of goods in a ship or the use or hire of a ship; (i) any claim in the nature of salvage (including aircraft). (maritime lien); (j) any claim in the nature of towage in respect of a ship or an aircraft; and (k) any claim in the nature of pilotage in respect of a ship or an aircraft; There are various other claims which give rise to claims in rem too numerous for the scope of this article but which we are happy to list for you should you require it. Once it is established that a claim form in rem can be issued, the ship will be arrested if the Court Registry is satisfied that the Affidavit to lead warrant complies with the statutory and procedural requirements. Provided therefore that full instructions with the supporting documents are received enabling the solicitor to prepare short particulars of the claim on the claim form itself, together with an Affidavit in support, an arrest may be carried out within hours of receiving said instructions. The Admiralty Marshal or her substitute will be on call 24 hours a day, 365 days a year, and therefore in urgent cases a ship may be arrested at any time. In this respect and compared

to other jurisdictions in the Mediterranean Sea, Gibraltar clearly has the advantage. Likewise should the claim in respect of which the arrest has been carried out be satisfied, an arrest may be lifted almost immediately and it is frequent for a claimant to be satisfied by the provision of a letter of undertaking from the ship’s P and I Club or a guarantee from a first class bank. However, if no form of security is provided the arresting party would apply by a motion for judgement in default or otherwise and also for an order for appraisement and sale of the ship. An order for sale pendente lite (i.e. before judgement) is possible and can be made when the security is deteriorating for one reason or another. A motion for judgement in default will usually be heard shortly after the period for acknowledging service is up and after delivery of a statement of claim and the filing of an Affidavit verifying the claim. However, if the Defendant appears to contest the claim the case will proceed to trial in the normal manner. If judgement is given for the claimant, it is normal for the vessel to be ordered to be appraised and sold. It is possible for such a sale to be by way of public auction or by way of private treaty. Public auction sales are by sealed bids and normally take about 4 weeks from the date the order is made. Private treaty sales can be done in less than a week. However in order to seek a sale by way of private treaty one must have a buyer willing to pay at least market value for the vessel having regard to the fact that the vessel is under arrest in Gibraltar. This is done by obtaining two valuations from reputable London brokers and securing an offer to buy the vessel on an as is where is basis in an amount over and above those valuations. When a vessel is sold by private treaty, the sale is not advertised although the money would have to be paid into Court for a period typically of 60 ñ 90 days in order to allow other creditors the chance to claim against the proceeds of sale of the vessel For all these reasons, Gibraltar is one of the premier arrest jurisdictions in the world, not least because of its geographical location and use of English admiralty law and practice. In addition, not only can vessels be arrested in Gibraltar, but also, in certain cases, cargo and/or freight.

European Court of First Instance annuls decision of European Commission regarding Gibraltar’s proposed tax reform by Selwyn Figueras

The European Court of First Instance, on 18 December 2008, has annulled the decision of the European Commission (Commission Decision 2005/261/EC of 30 March 2004 ) according to which the proposed reform of corporate tax in Gibraltar constitutes unlawful state aid. In that decision, the Commission found that the tax reform proposed by the Government of Gibraltar in August 2002 was regionally selective because companies in Gibraltar would be taxed at a level lower than those in the UK. The proposed reform failed the regional selectivity test on the basis that the reform in question fell foul of state aid rules which apply to all member states, including Gibraltar.

The Court of First Instance, on an application by the Gibraltar and UK Governments for the annulment of the decision, having found that state aid rules apply to Gibraltar, went on to determine whether it was the territory of Gibraltar or that of the UK which should be used as the reference framework for determining whether there is, in fact, regional selectivity. On the application of the three-tier test established in the Azores case of September 2006, the Court of First Instance found that Gibraltar had sufficient institutional, The current worldwide economic climate has procedural and economic/financial autonomy to resulted in an increasing number of instructions for render the regional selectivity argument raised by the arrest of vessels in Gibraltar and, if the large the Commission irrelevant. number of vessels at anchor on the East Side of Gibraltar awaiting instructions is anything to go by, The significance of this decision is the recognition we anticipate that the current trend is set to by the Court of First Instance of Gibraltar’s continue as shipowners default on their obligations. autonomy and independence in taxation matters and cements the view that Gibraltar has always been and will continue to be an autonomous, separate and distinct jurisdiction from the UK, clearly falling outside the reach and remit of the UK’s tax legislation. The decision now paves the way for what many expect will be an acceleration of the implementation of a new flat rate of corporate tax of 10%, applicable across the board to all companies established in Gibraltar.

Protecting Their Own by Selwyn Figueras

No amount of speak and rhetoric about change, or even the acute focus brought upon the American and worldwide financial crisis generated by the closing weeks of the US Presidential Election Campaign, seems to have done anything to allay the fears over the meltdown. In September last year, the US Treasury managed, just barely, to get an initiative through the American political process designed to bail out financial firms in crisis and in danger of folding, to the tune of seven hundred billions US Dollars.

the uncertain and difficult consequences of the drop in share values and the freezing up of credit systems worldwide. The Russian state’s development bank, Vneshekonombank (referred to as VEB), chaired by the country’s Prime Minister, ex-President Vladimir Putin, announced its plans to pump fifty billion US Dollars into the Russian economy by way of loans to distressed borrowers. It has since entered into the first two of what is anticipated to be a number of finance arrangements with the country’s corporate big guns in an effort to assist these companies in avoiding the potentially severe financial consequences arising from their failure to observe their obligations under other finance arrangements with Western banks. VEB has moved swiftly enough to save a number of large Russian corporations, owned by some of Russia’s richest individuals, from losing key assets to western banks which had been offered as collateral for large finance arrangements.

With the American state’s shore-up of firms like Bank of America and American International Group, in the wake of the Lehman Brothers collapse, pressure mounted on the now outgoing Administration to do all it could to bolster the US economy. By pumping cash into the country’s biggest lenders and relieving them of their overleveraged and ‘bad’ assets, the hope was that credit markets would thaw and the big mortgage lenders would live to see another day and eventually rise up from the ashes of the sub-prime lending fiasco. One of the distressed Russian companies was These moves were swiftly followed by a massive VimpelCom, owned by well-known and wellcash injection by other world central banks, connected, Mikhail Friedman and part of the Alfa including the European Central Bank and the Group of Companies. In a lending arrangement Bank of England. worth two billion US Dollars, VimpelCom’s The Russian economy has not escaped the effect refinancing of a debt owed to Deutsche Bank has of the worldwide downturn, causing politicians rendered the 44% stake in the Company pledged and economists to come together and roll out to Deustche Bank as collateral, safe from western their own salvage package. In frantic times over hands. the last few months, as stock markets around the As is often the case in transactions of this nature, world were crashing through the floor, Russia’s corporate entities from a number of jurisdictions stock markets resorted to pauses in trading to play a part and a local law firm, ISOLAS, acted for protect the value of the Russian Stock Index, the VEB in the $2 billion letter of credit from VEB to RTS. ECO Telecom Limited as borrower. Eco Telecom Emulating other large economies, the Russian is also part of the Alpha group and the letter of government too has moved to save its own from credit rescued the most valuable asset in ALFA

group’s telecommunications holdings, VimpelCom, from collapse. Vimpelcom is Russia’s No 2 mobile telephone operator and is listed on the New York Stock Exchange. “We were instructed to act at extremely short notice and managed to get the matter to a close within a couple of very frantic days. The markets being as volatile as they are, getting the transaction completed in the shortest time possible was of paramount importance and we’re happy we were able to get the result the clients were hoping for,” said Christian Hernandez, partner in charge of the Finance Team. International Finance Centres such as Gibraltar continue to attract corporate work from financial institutions demanding the solutions, efficacy, dynamism and professionalism required in transactional work of this nature. As the world turns the page on 2008, the weeks pass and the bigger picture of the global economic situation continues to reveal itself, the world will hope that such unprecedented state action in so many countries worldwide, will be enough to stem the flow of bad news and lead to the recovery of the world markets over the next 18-24 months. Barack Obama, the President-Elect, takes command on January 20th 2009 of a country where 83% of its people believe it’s all gone horribly wrong and he will certainly be hoping that he can help the world economy rally back to a state of health before long. There’s no doubt, however, that no matter how big the picture, Finance Centres like Gibraltar will continue to play a role in the financial arrangements of even the largest, most demanding and headline making clients.

Pillars of Hercules Stand Tall in New York by Joey Garcia

The Gibraltar based rugby team, Pillars of Hercules (www.pillarsofhercules7s.com) travelled across the globe to compete in the 50th Anniversary New York Sevens, club-level competition, to represent Gibraltar on the international field. The tournament is a large event on the rugby 7’s calendar and features 106 teams in total. During the group stages P.O.H took out, amongst others, the New York state champions as well as 2007 winners (The Brantford Harlequins), a team that included two Canada A international players. The final group game was the decider against Brantford who had beaten the other two teams by similar scores to P.O.H. Needing a win to progress to the cup competition the stakes were high but a fantastic performance meant that the Canadian team were unable to deal with the pressure and P.O.H came away as 24-7 winners.

very good tries from Captain Joey Garcia (a lawyer at ISOLAS) started the ball rolling well for P.O.H who characteristically got off to a strong start. P.O.H were 12 -5 up at half time and two late tries secured the victory and a place in the Cup final. In the final which took place on the main stadium pitch under floodlights, P.O.H were faced with very strong opposition from Baltimore in the shape of the ‘Flagrant Fouls.’ P.O.H took an early lead of 7-0 and then endured a long period of defence. The pressure proved too much and the Baltimoreans tied seven-all at the expiry of full time.

Sudden death ensued and high pressure defence kept P.O.H in the game on multiple occasions. Flagrant Fouls had one kick at goal in the first half of sudden death to win the match but the kick With only the group winners going through to the went thankfully wide and P.O.H continued to slog Cup, P.O.H went straight into the semi final slot it out. In the second half of sudden death the and came up against another strong team from P.O.H confidence started to come back and Long Island who had been identified earlier by various breaks could have produced winning scouts as one of the better sevens teams in the scores. In the dying moments of the game, a kick competition. Another high intensity game and two from the Flagrant Fouls which could have ended

the game (on the last play of the match before a coin toss) was caught by Jakey Coates and, after going through various sets of hands Mark Garcia put Joey Garcia through a gap to race away and beat the last defender before linking up with Mark Breen who kept in close support and was able to speed away to score a brilliant winning try. Madness and tears followed the famous moment, a fantastic victory for the Gibraltar team.


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ISSUE 3

JANUARY 2009

Cash Is King by Yan K Delgado, Trino Cruz and Carlos M. Martins,

With customer demand for cash-plus returns, is there an increasing role for liquidity funds to play above holding cash on deposit? And what should investors look for when it comes to, say, 30-day access? Are they simply a product made of short duration bonds? Are there any hidden risks that investors need to be aware of?

Arresting Ships In Gibraltar

Credit Suisse

by Christian C. Hernandez

Gibraltar has long been acknowledged as one of the premier arrest jurisdictions in the world, and its success is due to a number of factors. The certainty of law, ease of procedure and a large volume of shipping traffic allied with the Gibraltar port’s comparatively low port charges give Gibraltar the edge as an arrest jurisdiction in the Mediterranean. Gibraltar’s legal system is based on the common and statute law of England & Wales and, therefore, all requirements relating to the information, documents and undertakings required to arrest a ship in Gibraltar mirror those of the English system. Importantly, the Supreme Court of Gibraltar’s track record illustrates the speed and efficiency with which shipping matters are dealt with, particularly in the case of uncontested matters which are commonly disposed of in a matter of weeks.

dramatic swings in the Net Asset Value of the fund if interest rates move), with no more than 5% in any one underlying, though generally the funds try to maintain this at less than 2%.

Strict limits on an individual underlying are important in order to obtain as much diversification as possible. Diversification is not The current uncertainty in financial markets has limited to the number of investments, it is crucial prompted many investors to increase cash holdings in the event of the insolvency of an issuer. whilst continuing to observe the market As the investment vehicles are non-UK OEIC’s, environment carefully. They are seeking to any income arising or gains on disposal are taxed maintain flexibility in order to re-invest at short according to the rules for “offshore funds”. notice and aiming to maximise returns but Distributing share classes are taxed as offshore maintain liquidity. funds with distributor status. If the owner is a UK More conservative investors who have always been heavily exposed to cash, have more recently been reappraising their cash holdings, and looking for greater diversity, often moving away from deposit accounts to other more esoteric options.

resident individual paying tax at the highest rate in the UK, then any interest is taxed as a distribution from an offshore fund (at 32.5%). Accumulating share classes rolls-up the interest, with any benefit arising on disposal of the units or shares. For a In the past, investors tended to rely on a limited UK higher rate taxpayer, the disposal is taxed at number of options; various term deposits would 40%. It is therefore important investors consider normally have delivered the required returns, but these facts when investing in a liquidity fund.

It should be noted that only claims which give rise to an action in rem i.e., a claim which gives rise to an action against the vessel itself, will permit a claimant to arrest a ship. Claims giving rights to an action in rem

government bonds. A recent development is a new kind of liquidity fund which should especially appeal to those investors who do not want any corporate exposure, but still do not want to own individual government bonds. These new liquidity funds exclusively invest in government debt and repurchase agreements backed by government debt in Euros, Sterling and U.S. Dollars. Given that all The breadth of underlying investments in a the debt is issued by European and U.S. liquidity fund means risk is spread across a very governments these funds offer a very high level of diverse portfolio of financial instruments, but security, with a spread of exposure normally only investors should not view liquidity funds as a attainable by the wealthiest of investors. replacement for traditional deposit accounts, as they do not benefit from the Generally speaking, Credit Suisse would advise same protections under the Financial Services clients against keeping cash in one single Compensation Scheme. The value of investments instrument. A combination of liquidity funds, and the income derived from Liquidity funds can fiduciary deposits, onshore cash-based insurance obviously fall as well as rise, and should an investor bonds, and inflation linked-government bonds, as incur a loss, they may not recoup the original well as straight forward term deposits is a preferable solution. amount invested.

Recent events have highlighted the importance of superior credit ratings and diversified risk. the credit crunch and some significant exposures to the downturn in the asset-backed security markets, clearly illustrated the requirement for diversification.

Many investors have found attractive opportunities in the higher interest rates offered by liquidity funds. Most liquidity funds are structured as Open Ended Investment Companies (OEIC’s), and the majority are based in Dublin or Luxembourg. Liquidity funds aim to provide an investment return that is consistent with a very high degree of security of capital and liquidity. They are designed for short term investment with instant access and a Liquidity funds have proven to be attractive in the Readers are advised that Credit Suisse does not competitive yield. corporate environment, where Finance Directors provide tax advice, and investors are encouraged to seek independent tax advice. Investors acquire units or shares in a particular are looking to maximise returns and access funds fund where the capital is invested in various on a daily basis. financial instruments, including overnight deposits, short term bonds, floating-rate notes, commercial paper, certificates of deposit and even asset-backed securities, spread across a wide range of high quality financial institutions, sovereign and corporate issuers.

More recently, we have seen the popularity of the accumulating share classes’ increase with UK Resident Non-Domiciled investors who are not prepared to pay £30,000 flat rate charge to benefit from this status. The accumulating share classes allow investors to roll-up any interest and defer the All these instruments are associated with taxable event until they actually sell their units. counterparty and credit risk, and whilst most have An alternative to liquidity funds and deposits managed to avoid difficulties in the asset-backed would be investments in inflation linked market, some recent cases have illustrated that a government bonds which compensate for default of one or more of the underlying issues can increased levels of inflation. These bonds are have a serious impact on the mark-to-market especially interesting in light of the current valuation of the liquidity fund concerned. forecasts for inflation and can add value to a Recent events have highlighted the importance of portfolio where suitable for a client. In addition, superior credit ratings and diversified risk. Credit the lack of taxation on the final redemption Suisse recommends a variety of liquidity funds to amount considerably enhances the gross equivalent clients, each have an AAA rating, and a short term returns when comparing the overall returns to Credit Rating of A1/P1. Of the underlying bank and building society accounts. investments, none can be more than 13 months to Another option exists half way between the maturity (longer maturities could result in standard liquidity funds and inflation linked

This article was written several weeks ago, in advance of the recent turbulence experienced in the financial markets. As a result, many clients have become considerably more conservative in their attitude to risk, moving their balances from cash or money market funds to gilts. Liquidity funds have seen a reduction in their balances, but in most instances this is matched by an increase in similar funds where UK, US or Euro Government Bonds form the basis of the underlying investments. It is important if you are considering liquidity funds to not only review the underlying investments held, to make sure there is nothing of a toxic variety, but also to establish the levels of daily liquidity within the Fund and the weighted average maturity, should you need to exit quickly.

(a) any claim to the possession or ownership of a ship or the ownership of any share therein; (b) any question arising between the co-owners of a ship as to the possession, employment or earning of that ship; (c) any claim in respect of a mortgage of or charge on a ship or any share therein; (e) any claim for damage done by a ship. (maritime lien); (f ) any claim for loss of life or personal injury in respect of a defect in a ship, neglect or default in navigation, management of the ship, loading, carriage or discharge of goods, embarkation, carriage or disembarkation of passengers; (g) any claim for loss or for damage to goods carried in a ship; (h) any claim arising out of an agreement relating to the carriage of goods in a ship or the use or hire of a ship; (i) any claim in the nature of salvage (including aircraft). (maritime lien); (j) any claim in the nature of towage in respect of a ship or an aircraft; and (k) any claim in the nature of pilotage in respect of a ship or an aircraft; There are various other claims which give rise to claims in rem too numerous for the scope of this article but which we are happy to list for you should you require it. Once it is established that a claim form in rem can be issued, the ship will be arrested if the Court Registry is satisfied that the Affidavit to lead warrant complies with the statutory and procedural requirements. Provided therefore that full instructions with the supporting documents are received enabling the solicitor to prepare short particulars of the claim on the claim form itself, together with an Affidavit in support, an arrest may be carried out within hours of receiving said instructions. The Admiralty Marshal or her substitute will be on call 24 hours a day, 365 days a year, and therefore in urgent cases a ship may be arrested at any time. In this respect and compared

to other jurisdictions in the Mediterranean Sea, Gibraltar clearly has the advantage. Likewise should the claim in respect of which the arrest has been carried out be satisfied, an arrest may be lifted almost immediately and it is frequent for a claimant to be satisfied by the provision of a letter of undertaking from the ship’s P and I Club or a guarantee from a first class bank. However, if no form of security is provided the arresting party would apply by a motion for judgement in default or otherwise and also for an order for appraisement and sale of the ship. An order for sale pendente lite (i.e. before judgement) is possible and can be made when the security is deteriorating for one reason or another. A motion for judgement in default will usually be heard shortly after the period for acknowledging service is up and after delivery of a statement of claim and the filing of an Affidavit verifying the claim. However, if the Defendant appears to contest the claim the case will proceed to trial in the normal manner. If judgement is given for the claimant, it is normal for the vessel to be ordered to be appraised and sold. It is possible for such a sale to be by way of public auction or by way of private treaty. Public auction sales are by sealed bids and normally take about 4 weeks from the date the order is made. Private treaty sales can be done in less than a week. However in order to seek a sale by way of private treaty one must have a buyer willing to pay at least market value for the vessel having regard to the fact that the vessel is under arrest in Gibraltar. This is done by obtaining two valuations from reputable London brokers and securing an offer to buy the vessel on an as is where is basis in an amount over and above those valuations. When a vessel is sold by private treaty, the sale is not advertised although the money would have to be paid into Court for a period typically of 60 ñ 90 days in order to allow other creditors the chance to claim against the proceeds of sale of the vessel For all these reasons, Gibraltar is one of the premier arrest jurisdictions in the world, not least because of its geographical location and use of English admiralty law and practice. In addition, not only can vessels be arrested in Gibraltar, but also, in certain cases, cargo and/or freight.

European Court of First Instance annuls decision of European Commission regarding Gibraltar’s proposed tax reform by Selwyn Figueras

The European Court of First Instance, on 18 December 2008, has annulled the decision of the European Commission (Commission Decision 2005/261/EC of 30 March 2004 ) according to which the proposed reform of corporate tax in Gibraltar constitutes unlawful state aid. In that decision, the Commission found that the tax reform proposed by the Government of Gibraltar in August 2002 was regionally selective because companies in Gibraltar would be taxed at a level lower than those in the UK. The proposed reform failed the regional selectivity test on the basis that the reform in question fell foul of state aid rules which apply to all member states, including Gibraltar.

The Court of First Instance, on an application by the Gibraltar and UK Governments for the annulment of the decision, having found that state aid rules apply to Gibraltar, went on to determine whether it was the territory of Gibraltar or that of the UK which should be used as the reference framework for determining whether there is, in fact, regional selectivity. On the application of the three-tier test established in the Azores case of September 2006, the Court of First Instance found that Gibraltar had sufficient institutional, The current worldwide economic climate has procedural and economic/financial autonomy to resulted in an increasing number of instructions for render the regional selectivity argument raised by the arrest of vessels in Gibraltar and, if the large the Commission irrelevant. number of vessels at anchor on the East Side of Gibraltar awaiting instructions is anything to go by, The significance of this decision is the recognition we anticipate that the current trend is set to by the Court of First Instance of Gibraltar’s continue as shipowners default on their obligations. autonomy and independence in taxation matters and cements the view that Gibraltar has always been and will continue to be an autonomous, separate and distinct jurisdiction from the UK, clearly falling outside the reach and remit of the UK’s tax legislation. The decision now paves the way for what many expect will be an acceleration of the implementation of a new flat rate of corporate tax of 10%, applicable across the board to all companies established in Gibraltar.

Protecting Their Own by Selwyn Figueras

No amount of speak and rhetoric about change, or even the acute focus brought upon the American and worldwide financial crisis generated by the closing weeks of the US Presidential Election Campaign, seems to have done anything to allay the fears over the meltdown. In September last year, the US Treasury managed, just barely, to get an initiative through the American political process designed to bail out financial firms in crisis and in danger of folding, to the tune of seven hundred billions US Dollars.

the uncertain and difficult consequences of the drop in share values and the freezing up of credit systems worldwide. The Russian state’s development bank, Vneshekonombank (referred to as VEB), chaired by the country’s Prime Minister, ex-President Vladimir Putin, announced its plans to pump fifty billion US Dollars into the Russian economy by way of loans to distressed borrowers. It has since entered into the first two of what is anticipated to be a number of finance arrangements with the country’s corporate big guns in an effort to assist these companies in avoiding the potentially severe financial consequences arising from their failure to observe their obligations under other finance arrangements with Western banks. VEB has moved swiftly enough to save a number of large Russian corporations, owned by some of Russia’s richest individuals, from losing key assets to western banks which had been offered as collateral for large finance arrangements.

With the American state’s shore-up of firms like Bank of America and American International Group, in the wake of the Lehman Brothers collapse, pressure mounted on the now outgoing Administration to do all it could to bolster the US economy. By pumping cash into the country’s biggest lenders and relieving them of their overleveraged and ‘bad’ assets, the hope was that credit markets would thaw and the big mortgage lenders would live to see another day and eventually rise up from the ashes of the sub-prime lending fiasco. One of the distressed Russian companies was These moves were swiftly followed by a massive VimpelCom, owned by well-known and wellcash injection by other world central banks, connected, Mikhail Friedman and part of the Alfa including the European Central Bank and the Group of Companies. In a lending arrangement Bank of England. worth two billion US Dollars, VimpelCom’s The Russian economy has not escaped the effect refinancing of a debt owed to Deutsche Bank has of the worldwide downturn, causing politicians rendered the 44% stake in the Company pledged and economists to come together and roll out to Deustche Bank as collateral, safe from western their own salvage package. In frantic times over hands. the last few months, as stock markets around the As is often the case in transactions of this nature, world were crashing through the floor, Russia’s corporate entities from a number of jurisdictions stock markets resorted to pauses in trading to play a part and a local law firm, ISOLAS, acted for protect the value of the Russian Stock Index, the VEB in the $2 billion letter of credit from VEB to RTS. ECO Telecom Limited as borrower. Eco Telecom Emulating other large economies, the Russian is also part of the Alpha group and the letter of government too has moved to save its own from credit rescued the most valuable asset in ALFA

group’s telecommunications holdings, VimpelCom, from collapse. Vimpelcom is Russia’s No 2 mobile telephone operator and is listed on the New York Stock Exchange. “We were instructed to act at extremely short notice and managed to get the matter to a close within a couple of very frantic days. The markets being as volatile as they are, getting the transaction completed in the shortest time possible was of paramount importance and we’re happy we were able to get the result the clients were hoping for,” said Christian Hernandez, partner in charge of the Finance Team. International Finance Centres such as Gibraltar continue to attract corporate work from financial institutions demanding the solutions, efficacy, dynamism and professionalism required in transactional work of this nature. As the world turns the page on 2008, the weeks pass and the bigger picture of the global economic situation continues to reveal itself, the world will hope that such unprecedented state action in so many countries worldwide, will be enough to stem the flow of bad news and lead to the recovery of the world markets over the next 18-24 months. Barack Obama, the President-Elect, takes command on January 20th 2009 of a country where 83% of its people believe it’s all gone horribly wrong and he will certainly be hoping that he can help the world economy rally back to a state of health before long. There’s no doubt, however, that no matter how big the picture, Finance Centres like Gibraltar will continue to play a role in the financial arrangements of even the largest, most demanding and headline making clients.

Pillars of Hercules Stand Tall in New York by Joey Garcia

The Gibraltar based rugby team, Pillars of Hercules (www.pillarsofhercules7s.com) travelled across the globe to compete in the 50th Anniversary New York Sevens, club-level competition, to represent Gibraltar on the international field. The tournament is a large event on the rugby 7’s calendar and features 106 teams in total. During the group stages P.O.H took out, amongst others, the New York state champions as well as 2007 winners (The Brantford Harlequins), a team that included two Canada A international players. The final group game was the decider against Brantford who had beaten the other two teams by similar scores to P.O.H. Needing a win to progress to the cup competition the stakes were high but a fantastic performance meant that the Canadian team were unable to deal with the pressure and P.O.H came away as 24-7 winners.

very good tries from Captain Joey Garcia (a lawyer at ISOLAS) started the ball rolling well for P.O.H who characteristically got off to a strong start. P.O.H were 12 -5 up at half time and two late tries secured the victory and a place in the Cup final. In the final which took place on the main stadium pitch under floodlights, P.O.H were faced with very strong opposition from Baltimore in the shape of the ‘Flagrant Fouls.’ P.O.H took an early lead of 7-0 and then endured a long period of defence. The pressure proved too much and the Baltimoreans tied seven-all at the expiry of full time.

Sudden death ensued and high pressure defence kept P.O.H in the game on multiple occasions. Flagrant Fouls had one kick at goal in the first half of sudden death to win the match but the kick With only the group winners going through to the went thankfully wide and P.O.H continued to slog Cup, P.O.H went straight into the semi final slot it out. In the second half of sudden death the and came up against another strong team from P.O.H confidence started to come back and Long Island who had been identified earlier by various breaks could have produced winning scouts as one of the better sevens teams in the scores. In the dying moments of the game, a kick competition. Another high intensity game and two from the Flagrant Fouls which could have ended

the game (on the last play of the match before a coin toss) was caught by Jakey Coates and, after going through various sets of hands Mark Garcia put Joey Garcia through a gap to race away and beat the last defender before linking up with Mark Breen who kept in close support and was able to speed away to score a brilliant winning try. Madness and tears followed the famous moment, a fantastic victory for the Gibraltar team.


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Page 2

ISSUE 3

JANUARY 2009

Cash Is King by Yan K Delgado, Trino Cruz and Carlos M. Martins,

With customer demand for cash-plus returns, is there an increasing role for liquidity funds to play above holding cash on deposit? And what should investors look for when it comes to, say, 30-day access? Are they simply a product made of short duration bonds? Are there any hidden risks that investors need to be aware of?

Arresting Ships In Gibraltar

Credit Suisse

by Christian C. Hernandez

Gibraltar has long been acknowledged as one of the premier arrest jurisdictions in the world, and its success is due to a number of factors. The certainty of law, ease of procedure and a large volume of shipping traffic allied with the Gibraltar port’s comparatively low port charges give Gibraltar the edge as an arrest jurisdiction in the Mediterranean. Gibraltar’s legal system is based on the common and statute law of England & Wales and, therefore, all requirements relating to the information, documents and undertakings required to arrest a ship in Gibraltar mirror those of the English system. Importantly, the Supreme Court of Gibraltar’s track record illustrates the speed and efficiency with which shipping matters are dealt with, particularly in the case of uncontested matters which are commonly disposed of in a matter of weeks.

dramatic swings in the Net Asset Value of the fund if interest rates move), with no more than 5% in any one underlying, though generally the funds try to maintain this at less than 2%.

Strict limits on an individual underlying are important in order to obtain as much diversification as possible. Diversification is not The current uncertainty in financial markets has limited to the number of investments, it is crucial prompted many investors to increase cash holdings in the event of the insolvency of an issuer. whilst continuing to observe the market As the investment vehicles are non-UK OEIC’s, environment carefully. They are seeking to any income arising or gains on disposal are taxed maintain flexibility in order to re-invest at short according to the rules for “offshore funds”. notice and aiming to maximise returns but Distributing share classes are taxed as offshore maintain liquidity. funds with distributor status. If the owner is a UK More conservative investors who have always been heavily exposed to cash, have more recently been reappraising their cash holdings, and looking for greater diversity, often moving away from deposit accounts to other more esoteric options.

resident individual paying tax at the highest rate in the UK, then any interest is taxed as a distribution from an offshore fund (at 32.5%). Accumulating share classes rolls-up the interest, with any benefit arising on disposal of the units or shares. For a In the past, investors tended to rely on a limited UK higher rate taxpayer, the disposal is taxed at number of options; various term deposits would 40%. It is therefore important investors consider normally have delivered the required returns, but these facts when investing in a liquidity fund.

It should be noted that only claims which give rise to an action in rem i.e., a claim which gives rise to an action against the vessel itself, will permit a claimant to arrest a ship. Claims giving rights to an action in rem

government bonds. A recent development is a new kind of liquidity fund which should especially appeal to those investors who do not want any corporate exposure, but still do not want to own individual government bonds. These new liquidity funds exclusively invest in government debt and repurchase agreements backed by government debt in Euros, Sterling and U.S. Dollars. Given that all The breadth of underlying investments in a the debt is issued by European and U.S. liquidity fund means risk is spread across a very governments these funds offer a very high level of diverse portfolio of financial instruments, but security, with a spread of exposure normally only investors should not view liquidity funds as a attainable by the wealthiest of investors. replacement for traditional deposit accounts, as they do not benefit from the Generally speaking, Credit Suisse would advise same protections under the Financial Services clients against keeping cash in one single Compensation Scheme. The value of investments instrument. A combination of liquidity funds, and the income derived from Liquidity funds can fiduciary deposits, onshore cash-based insurance obviously fall as well as rise, and should an investor bonds, and inflation linked-government bonds, as incur a loss, they may not recoup the original well as straight forward term deposits is a preferable solution. amount invested.

Recent events have highlighted the importance of superior credit ratings and diversified risk. the credit crunch and some significant exposures to the downturn in the asset-backed security markets, clearly illustrated the requirement for diversification.

Many investors have found attractive opportunities in the higher interest rates offered by liquidity funds. Most liquidity funds are structured as Open Ended Investment Companies (OEIC’s), and the majority are based in Dublin or Luxembourg. Liquidity funds aim to provide an investment return that is consistent with a very high degree of security of capital and liquidity. They are designed for short term investment with instant access and a Liquidity funds have proven to be attractive in the Readers are advised that Credit Suisse does not competitive yield. corporate environment, where Finance Directors provide tax advice, and investors are encouraged to seek independent tax advice. Investors acquire units or shares in a particular are looking to maximise returns and access funds fund where the capital is invested in various on a daily basis. financial instruments, including overnight deposits, short term bonds, floating-rate notes, commercial paper, certificates of deposit and even asset-backed securities, spread across a wide range of high quality financial institutions, sovereign and corporate issuers.

More recently, we have seen the popularity of the accumulating share classes’ increase with UK Resident Non-Domiciled investors who are not prepared to pay £30,000 flat rate charge to benefit from this status. The accumulating share classes allow investors to roll-up any interest and defer the All these instruments are associated with taxable event until they actually sell their units. counterparty and credit risk, and whilst most have An alternative to liquidity funds and deposits managed to avoid difficulties in the asset-backed would be investments in inflation linked market, some recent cases have illustrated that a government bonds which compensate for default of one or more of the underlying issues can increased levels of inflation. These bonds are have a serious impact on the mark-to-market especially interesting in light of the current valuation of the liquidity fund concerned. forecasts for inflation and can add value to a Recent events have highlighted the importance of portfolio where suitable for a client. In addition, superior credit ratings and diversified risk. Credit the lack of taxation on the final redemption Suisse recommends a variety of liquidity funds to amount considerably enhances the gross equivalent clients, each have an AAA rating, and a short term returns when comparing the overall returns to Credit Rating of A1/P1. Of the underlying bank and building society accounts. investments, none can be more than 13 months to Another option exists half way between the maturity (longer maturities could result in standard liquidity funds and inflation linked

This article was written several weeks ago, in advance of the recent turbulence experienced in the financial markets. As a result, many clients have become considerably more conservative in their attitude to risk, moving their balances from cash or money market funds to gilts. Liquidity funds have seen a reduction in their balances, but in most instances this is matched by an increase in similar funds where UK, US or Euro Government Bonds form the basis of the underlying investments. It is important if you are considering liquidity funds to not only review the underlying investments held, to make sure there is nothing of a toxic variety, but also to establish the levels of daily liquidity within the Fund and the weighted average maturity, should you need to exit quickly.

(a) any claim to the possession or ownership of a ship or the ownership of any share therein; (b) any question arising between the co-owners of a ship as to the possession, employment or earning of that ship; (c) any claim in respect of a mortgage of or charge on a ship or any share therein; (e) any claim for damage done by a ship. (maritime lien); (f ) any claim for loss of life or personal injury in respect of a defect in a ship, neglect or default in navigation, management of the ship, loading, carriage or discharge of goods, embarkation, carriage or disembarkation of passengers; (g) any claim for loss or for damage to goods carried in a ship; (h) any claim arising out of an agreement relating to the carriage of goods in a ship or the use or hire of a ship; (i) any claim in the nature of salvage (including aircraft). (maritime lien); (j) any claim in the nature of towage in respect of a ship or an aircraft; and (k) any claim in the nature of pilotage in respect of a ship or an aircraft; There are various other claims which give rise to claims in rem too numerous for the scope of this article but which we are happy to list for you should you require it. Once it is established that a claim form in rem can be issued, the ship will be arrested if the Court Registry is satisfied that the Affidavit to lead warrant complies with the statutory and procedural requirements. Provided therefore that full instructions with the supporting documents are received enabling the solicitor to prepare short particulars of the claim on the claim form itself, together with an Affidavit in support, an arrest may be carried out within hours of receiving said instructions. The Admiralty Marshal or her substitute will be on call 24 hours a day, 365 days a year, and therefore in urgent cases a ship may be arrested at any time. In this respect and compared

to other jurisdictions in the Mediterranean Sea, Gibraltar clearly has the advantage. Likewise should the claim in respect of which the arrest has been carried out be satisfied, an arrest may be lifted almost immediately and it is frequent for a claimant to be satisfied by the provision of a letter of undertaking from the ship’s P and I Club or a guarantee from a first class bank. However, if no form of security is provided the arresting party would apply by a motion for judgement in default or otherwise and also for an order for appraisement and sale of the ship. An order for sale pendente lite (i.e. before judgement) is possible and can be made when the security is deteriorating for one reason or another. A motion for judgement in default will usually be heard shortly after the period for acknowledging service is up and after delivery of a statement of claim and the filing of an Affidavit verifying the claim. However, if the Defendant appears to contest the claim the case will proceed to trial in the normal manner. If judgement is given for the claimant, it is normal for the vessel to be ordered to be appraised and sold. It is possible for such a sale to be by way of public auction or by way of private treaty. Public auction sales are by sealed bids and normally take about 4 weeks from the date the order is made. Private treaty sales can be done in less than a week. However in order to seek a sale by way of private treaty one must have a buyer willing to pay at least market value for the vessel having regard to the fact that the vessel is under arrest in Gibraltar. This is done by obtaining two valuations from reputable London brokers and securing an offer to buy the vessel on an as is where is basis in an amount over and above those valuations. When a vessel is sold by private treaty, the sale is not advertised although the money would have to be paid into Court for a period typically of 60 ñ 90 days in order to allow other creditors the chance to claim against the proceeds of sale of the vessel For all these reasons, Gibraltar is one of the premier arrest jurisdictions in the world, not least because of its geographical location and use of English admiralty law and practice. In addition, not only can vessels be arrested in Gibraltar, but also, in certain cases, cargo and/or freight.

European Court of First Instance annuls decision of European Commission regarding Gibraltar’s proposed tax reform by Selwyn Figueras

The European Court of First Instance, on 18 December 2008, has annulled the decision of the European Commission (Commission Decision 2005/261/EC of 30 March 2004 ) according to which the proposed reform of corporate tax in Gibraltar constitutes unlawful state aid. In that decision, the Commission found that the tax reform proposed by the Government of Gibraltar in August 2002 was regionally selective because companies in Gibraltar would be taxed at a level lower than those in the UK. The proposed reform failed the regional selectivity test on the basis that the reform in question fell foul of state aid rules which apply to all member states, including Gibraltar.

The Court of First Instance, on an application by the Gibraltar and UK Governments for the annulment of the decision, having found that state aid rules apply to Gibraltar, went on to determine whether it was the territory of Gibraltar or that of the UK which should be used as the reference framework for determining whether there is, in fact, regional selectivity. On the application of the three-tier test established in the Azores case of September 2006, the Court of First Instance found that Gibraltar had sufficient institutional, The current worldwide economic climate has procedural and economic/financial autonomy to resulted in an increasing number of instructions for render the regional selectivity argument raised by the arrest of vessels in Gibraltar and, if the large the Commission irrelevant. number of vessels at anchor on the East Side of Gibraltar awaiting instructions is anything to go by, The significance of this decision is the recognition we anticipate that the current trend is set to by the Court of First Instance of Gibraltar’s continue as shipowners default on their obligations. autonomy and independence in taxation matters and cements the view that Gibraltar has always been and will continue to be an autonomous, separate and distinct jurisdiction from the UK, clearly falling outside the reach and remit of the UK’s tax legislation. The decision now paves the way for what many expect will be an acceleration of the implementation of a new flat rate of corporate tax of 10%, applicable across the board to all companies established in Gibraltar.

Protecting Their Own by Selwyn Figueras

No amount of speak and rhetoric about change, or even the acute focus brought upon the American and worldwide financial crisis generated by the closing weeks of the US Presidential Election Campaign, seems to have done anything to allay the fears over the meltdown. In September last year, the US Treasury managed, just barely, to get an initiative through the American political process designed to bail out financial firms in crisis and in danger of folding, to the tune of seven hundred billions US Dollars.

the uncertain and difficult consequences of the drop in share values and the freezing up of credit systems worldwide. The Russian state’s development bank, Vneshekonombank (referred to as VEB), chaired by the country’s Prime Minister, ex-President Vladimir Putin, announced its plans to pump fifty billion US Dollars into the Russian economy by way of loans to distressed borrowers. It has since entered into the first two of what is anticipated to be a number of finance arrangements with the country’s corporate big guns in an effort to assist these companies in avoiding the potentially severe financial consequences arising from their failure to observe their obligations under other finance arrangements with Western banks. VEB has moved swiftly enough to save a number of large Russian corporations, owned by some of Russia’s richest individuals, from losing key assets to western banks which had been offered as collateral for large finance arrangements.

With the American state’s shore-up of firms like Bank of America and American International Group, in the wake of the Lehman Brothers collapse, pressure mounted on the now outgoing Administration to do all it could to bolster the US economy. By pumping cash into the country’s biggest lenders and relieving them of their overleveraged and ‘bad’ assets, the hope was that credit markets would thaw and the big mortgage lenders would live to see another day and eventually rise up from the ashes of the sub-prime lending fiasco. One of the distressed Russian companies was These moves were swiftly followed by a massive VimpelCom, owned by well-known and wellcash injection by other world central banks, connected, Mikhail Friedman and part of the Alfa including the European Central Bank and the Group of Companies. In a lending arrangement Bank of England. worth two billion US Dollars, VimpelCom’s The Russian economy has not escaped the effect refinancing of a debt owed to Deutsche Bank has of the worldwide downturn, causing politicians rendered the 44% stake in the Company pledged and economists to come together and roll out to Deustche Bank as collateral, safe from western their own salvage package. In frantic times over hands. the last few months, as stock markets around the As is often the case in transactions of this nature, world were crashing through the floor, Russia’s corporate entities from a number of jurisdictions stock markets resorted to pauses in trading to play a part and a local law firm, ISOLAS, acted for protect the value of the Russian Stock Index, the VEB in the $2 billion letter of credit from VEB to RTS. ECO Telecom Limited as borrower. Eco Telecom Emulating other large economies, the Russian is also part of the Alpha group and the letter of government too has moved to save its own from credit rescued the most valuable asset in ALFA

group’s telecommunications holdings, VimpelCom, from collapse. Vimpelcom is Russia’s No 2 mobile telephone operator and is listed on the New York Stock Exchange. “We were instructed to act at extremely short notice and managed to get the matter to a close within a couple of very frantic days. The markets being as volatile as they are, getting the transaction completed in the shortest time possible was of paramount importance and we’re happy we were able to get the result the clients were hoping for,” said Christian Hernandez, partner in charge of the Finance Team. International Finance Centres such as Gibraltar continue to attract corporate work from financial institutions demanding the solutions, efficacy, dynamism and professionalism required in transactional work of this nature. As the world turns the page on 2008, the weeks pass and the bigger picture of the global economic situation continues to reveal itself, the world will hope that such unprecedented state action in so many countries worldwide, will be enough to stem the flow of bad news and lead to the recovery of the world markets over the next 18-24 months. Barack Obama, the President-Elect, takes command on January 20th 2009 of a country where 83% of its people believe it’s all gone horribly wrong and he will certainly be hoping that he can help the world economy rally back to a state of health before long. There’s no doubt, however, that no matter how big the picture, Finance Centres like Gibraltar will continue to play a role in the financial arrangements of even the largest, most demanding and headline making clients.

Pillars of Hercules Stand Tall in New York by Joey Garcia

The Gibraltar based rugby team, Pillars of Hercules (www.pillarsofhercules7s.com) travelled across the globe to compete in the 50th Anniversary New York Sevens, club-level competition, to represent Gibraltar on the international field. The tournament is a large event on the rugby 7’s calendar and features 106 teams in total. During the group stages P.O.H took out, amongst others, the New York state champions as well as 2007 winners (The Brantford Harlequins), a team that included two Canada A international players. The final group game was the decider against Brantford who had beaten the other two teams by similar scores to P.O.H. Needing a win to progress to the cup competition the stakes were high but a fantastic performance meant that the Canadian team were unable to deal with the pressure and P.O.H came away as 24-7 winners.

very good tries from Captain Joey Garcia (a lawyer at ISOLAS) started the ball rolling well for P.O.H who characteristically got off to a strong start. P.O.H were 12 -5 up at half time and two late tries secured the victory and a place in the Cup final. In the final which took place on the main stadium pitch under floodlights, P.O.H were faced with very strong opposition from Baltimore in the shape of the ‘Flagrant Fouls.’ P.O.H took an early lead of 7-0 and then endured a long period of defence. The pressure proved too much and the Baltimoreans tied seven-all at the expiry of full time.

Sudden death ensued and high pressure defence kept P.O.H in the game on multiple occasions. Flagrant Fouls had one kick at goal in the first half of sudden death to win the match but the kick With only the group winners going through to the went thankfully wide and P.O.H continued to slog Cup, P.O.H went straight into the semi final slot it out. In the second half of sudden death the and came up against another strong team from P.O.H confidence started to come back and Long Island who had been identified earlier by various breaks could have produced winning scouts as one of the better sevens teams in the scores. In the dying moments of the game, a kick competition. Another high intensity game and two from the Flagrant Fouls which could have ended

the game (on the last play of the match before a coin toss) was caught by Jakey Coates and, after going through various sets of hands Mark Garcia put Joey Garcia through a gap to race away and beat the last defender before linking up with Mark Breen who kept in close support and was able to speed away to score a brilliant winning try. Madness and tears followed the famous moment, a fantastic victory for the Gibraltar team.


isolas-communique-03

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09:07

Page 1

ISSUE 3

JANUARY 2009

ISSUE 3

JANUARY 2009

Gaming Code Review part 2

Gaming Code cont.

In this, the second of two articles covering the proposed new gaming code of practice, we continue to review the most important points of the proposal.

Site content

by Steven Caetano

Operating Procedures Internal Controls

The Act creates an obligation for licensees to establish an effective system of internal controls and procedures. Although it is recognised that operators have adopted different standards for different procedures and internal controls pursuant to their individual circumstances and business requirements it is necessary for operators and industries at large to make such information readily available to the Gambling Commissioner. Operating procedures and controls should be proportionate to the scale and nature of the licence holders’ gambling activities. Generally speaking, these should address: Corporate structure and reporting; Internal and external audit arrangements; Accounting and financial control standards; Customer and transaction controls including security; Business continuity/disaster recovery plans; Antimoney laundering arrangements; Age verification procedures; Problem gambling and self-exclusion policies; Customer complaints arrangements; System testing and security arrangements; and Web content; Needless to say, a comprehensive published operating procedure manual or internal controls booklet is considered as basic good governance and will facilitate internal audit by the Gambling Commissioner.

Minimum Age for Gambling

by Steven Caetano

people may now access remote gambling facilities (including mobile gaming) A potential requirement of the Code could inclusion of the above information on the cause the operator to display on each homepage only is now seen as sufficient. homepage a link or links to a page that As a consequence, the final version of the includes:Code could require Licence Holders to ensure that these motif emblems and those (a) Full name of the licence holder and associates with problem gambling advice address from which it carries on and any other warranty assurance or business pursuant to its Gibraltar warning links or terms or conditions are licence; displayed on every page preceding and (b) A statement that the licence holder following the actual betting pages. is licensed under the Act by the Mobile Gaming Gibraltar Licensing Authority or Government of Gibraltar; Given recent trends in the technology and

and

the Regulatory Return is seen as a primary indicator of the licensee’s scale and range of activities to enable adequate supervision. Suitable security and confidentiality measures would be applied by all parties concerned in accordance with applicable data protection and privacy laws. It remains to be seen whether the industry will concur with the Gambling Commissioner that quarterly as opposed to bi annual or annual returns are adequate enough, and quarterly returns could be seen as disproportionate, especially when the Gambling Commissioner is already empowered under the Act to request any type of information related to the gambling activities taking place at any time on reasonable notice.

Data Protection Measures

The Data Protection Act 2004 applies to all Licensees. The final version of the code Age verification measures should be in may well regurgitate the main obligations place and these include, as a minimum, of the Data Protection Act and related individuals’ names, age and address. All privacy provisions. operators are expected to take reasonable steps to prevent a person under the Complaints minimum permitted age from All Licence Holders are required to participating in gambling activities and promptly enquire into any complaint these also include free play. Licence about a gambling transaction made to holders are expected to take reasonable them by a participant or referred to them measures to test the effectiveness of their by the Gambling Commissioner. systems and permit the use of parental Wherever possible, complaints should be blocking and filtering systems. investigated by the Operator and brought Transaction Record Keeping to the attention of the Gambling and Provisional Accounts Commissioner but only if the Licence The final version of the Code could Holders’ internal complaints procedures require each licence holder to provide the have failed to resolve the issue at first Gambling Commissioner with quarterly instance. Exceptions to this would include statistical financial returns in respect of very serious complaints involving each licensed activity. The data comprising substantial sums of money or issues of

public interest. In this case, it is recommended that the complaint or issue incapable of being resolved be brought to the Gambling Commissioner’s attention at the earliest available opportunity. Kindly note that the term “Gambling Transaction” in this context is given a broad interpretation including, the wide administration of gaming accounts, marketing and any matters designed to affect the gambling transactions themselves. In addition, Licence Holders will be expected to have in place a system for recording and examining customer or third party complaints. This should include adequate resources to address complaints expeditiously, access to an independent adjudication process for appropriate disputes and a means of maintaining a record of all complaints that can be made available to the Gambling Commissioner as and when reasonably required.

Registration of Participants The Act requires operators to ensure that all their players are registered with them in the form specified under the Act (and indeed the Licence Agreement). This is a minimum standard imposed by both the terms of conditions of Licence and the Act and requires the players full name, residential address and age. Needless to say, this information must be kept by the operator in accordance with data protection principles currently applicable. Random checks and dip sampling of accounts by the Gambling Commissioner and other examinations would be subject to proportionate and ad hoc recording.

JANUARY 2009

ISSUE 3

mobile, telephone gambling a reminder that the gambling is provided under the agreed terms and conditions on the website should be acknowledged by the player.

www.gibraltarlawyers.com

Similarly, mobile phone gambling may only draw on funds credited via the parent website or by voice call arrangements where the Customer Services Operator has sight of the player’s gambling account and history. Therefore, it is a condition precedent to the use of mobile phones in gambling under the new Code to conduct every registration, procedure and avail oneself of the terms and conditions of methodology by which gaming is currently gaming through a computer in the offered to the public at large the proposed traditional sense. code of practice recognises the use of This article is necessarily limited in its mobile telephones and notes the scope and, in light of the fact that the additional challenges presented by this subject matter of the article is currently in method of remote gambling. proposal form, regard must be had to the

(c) A statement that the licence holder is regulated under the Act by the Gibraltar Gambling Commissioner (in this regard the final version of the Code could require a live link be set up to the GRA site); and (d) A statement in respect of the permitted age for gambling. Therefore, it is regarded as good practice to include the emblem of the Government of Gibraltar as a link to the Government website and a separate link on the motif of the GRA to the GRA website which would serve as a means of indicating to users that the licence holder is indeed regulated by this body in addition to being licensed by the Government. Given the complexity of various Licence Holders’ websites and web operating structures and given the diversity in which

It is likely that the code will impose preconditions to facilitate mobile gaming. For example, operators may only allow players to use mobile facilities if the player has first registered to play via the licensee’s website and in doing so acknowledges that gambling by mobile phone should be done in conjunction with an internet account and not in isolation of it. This would mean in practice that the player will have to register via a PC. In particular new deposits to the account should only be possible through the website or through voice communication with a live agent. In addition, at the commencement of any

its continuing success on the international stage and of the growing number of awards its various teams are attracting in a wide range of practice areas. ISOLAS has ranked and continues to rank consistently as a

By Christian Rocca

possible changes that may be effected to the actual code. ISOLAS will continue to monitor developments in this area and will continue to keep its clients and partners up to speed on any developments.”

ISOLAS recognised once more ISOLAS has recently been informed of its nomination as “Best Banking and Finance Team-Gibraltar & Spain 2009” by European CEO Magazine. In addition to this nomination, ISOLAS is very proud of

Communiqué Introduction

leading law firm in various fields, including M&A, Banking and Shipping, in the most prestigious legal directories such as Chambers Global, Legal 500 and European Legal Experts.

Associated with

www.gibraltarlawyers.com Portland House Glacis Road PO Box 204 Gibraltar Tel +350 200 78363 Regulated by the Gibraltar Financial Services Commission. Licence Numbers FSC00277B FSC00276B

New Year is a time for change, hope and hard work. Looking back to 2008 and, in particular, the last few months, there have been a number of important developments for Gibraltar Participants from the 24hr and ISOLAS which, Relay For Life, Gibraltar of course, are covered for Cancer Research in the third edition of our newsletter, the Communique. I’m also very happy to note that this publication is going from strength to strength, with a growing number of partners and clients asking to receive it as soon as we print it. What’s more, we’ve had a very helpful response from our readers as to how we might improve and enhance the Communique. In response to that, this edition includes an article from one of our professional partners, Credit Suisse, about cash investment options in the current financial crisis environment. In future editions we will be continuing this partnership and would be grateful to hear from any reader who might have an idea for an item in our Communique. Simply let us know and we’ll be glad to consider it. An important development in the Gibraltar story came on the 18th December 2008 in

On a personal level, I’m very proud of the firm’s participation in September in the very successful 24hr Relay For Life Gibraltar, organised by Cancer Research UK. the shape of a judgment of the European Court of First Instance annulling a decision previously made by the European Commission in respect of Gibraltar’s proposed tax reform. Our article on this deals with the details and explains how important this decision is for Gibraltar’s future as an International Finance Centre. On a personal level, I’m very proud of the firm’s participation in September in the very successful 24hr Relay For Life Gibraltar, organised by Cancer Research UK. The event was extremely well attended and ISOLAS fielded a team of more than twenty participants who, over a 24hr period, took turns to lap the athletics track at Victoria Stadium. As part of our continuing participation in events of this nature a few members of the team and I have been contemplating a challenge to raise funds for the PJ Isola Foundation. On the cards is a long distance charity cycle so watch this space for news of our training and fund raising.

Finally, I hope that 2009 brings the recovery and stabilisation of the financial markets and the confidence which, during the latter part of 2008, dropped to unprecedented levels. We remain at the service of you and your clients and look forward to a 2009 full of prosperity and positive development.

In this issue Page

1. Introduction 2. Cash Is King 3. Arresting Ships In Gibraltar Court Of First Instance Decison 4. Protecting Their Own Pillars Of Hercules 5. Gaming Code Review Part 2


isolas-communique-03

27/1/09

09:07

Page 1

ISSUE 3

JANUARY 2009

ISSUE 3

JANUARY 2009

Gaming Code Review part 2

Gaming Code cont.

In this, the second of two articles covering the proposed new gaming code of practice, we continue to review the most important points of the proposal.

Site content

by Steven Caetano

Operating Procedures Internal Controls

The Act creates an obligation for licensees to establish an effective system of internal controls and procedures. Although it is recognised that operators have adopted different standards for different procedures and internal controls pursuant to their individual circumstances and business requirements it is necessary for operators and industries at large to make such information readily available to the Gambling Commissioner. Operating procedures and controls should be proportionate to the scale and nature of the licence holders’ gambling activities. Generally speaking, these should address: Corporate structure and reporting; Internal and external audit arrangements; Accounting and financial control standards; Customer and transaction controls including security; Business continuity/disaster recovery plans; Antimoney laundering arrangements; Age verification procedures; Problem gambling and self-exclusion policies; Customer complaints arrangements; System testing and security arrangements; and Web content; Needless to say, a comprehensive published operating procedure manual or internal controls booklet is considered as basic good governance and will facilitate internal audit by the Gambling Commissioner.

Minimum Age for Gambling

by Steven Caetano

people may now access remote gambling facilities (including mobile gaming) A potential requirement of the Code could inclusion of the above information on the cause the operator to display on each homepage only is now seen as sufficient. homepage a link or links to a page that As a consequence, the final version of the includes:Code could require Licence Holders to ensure that these motif emblems and those (a) Full name of the licence holder and associates with problem gambling advice address from which it carries on and any other warranty assurance or business pursuant to its Gibraltar warning links or terms or conditions are licence; displayed on every page preceding and (b) A statement that the licence holder following the actual betting pages. is licensed under the Act by the Mobile Gaming Gibraltar Licensing Authority or Government of Gibraltar; Given recent trends in the technology and

and

the Regulatory Return is seen as a primary indicator of the licensee’s scale and range of activities to enable adequate supervision. Suitable security and confidentiality measures would be applied by all parties concerned in accordance with applicable data protection and privacy laws. It remains to be seen whether the industry will concur with the Gambling Commissioner that quarterly as opposed to bi annual or annual returns are adequate enough, and quarterly returns could be seen as disproportionate, especially when the Gambling Commissioner is already empowered under the Act to request any type of information related to the gambling activities taking place at any time on reasonable notice.

Data Protection Measures

The Data Protection Act 2004 applies to all Licensees. The final version of the code Age verification measures should be in may well regurgitate the main obligations place and these include, as a minimum, of the Data Protection Act and related individuals’ names, age and address. All privacy provisions. operators are expected to take reasonable steps to prevent a person under the Complaints minimum permitted age from All Licence Holders are required to participating in gambling activities and promptly enquire into any complaint these also include free play. Licence about a gambling transaction made to holders are expected to take reasonable them by a participant or referred to them measures to test the effectiveness of their by the Gambling Commissioner. systems and permit the use of parental Wherever possible, complaints should be blocking and filtering systems. investigated by the Operator and brought Transaction Record Keeping to the attention of the Gambling and Provisional Accounts Commissioner but only if the Licence The final version of the Code could Holders’ internal complaints procedures require each licence holder to provide the have failed to resolve the issue at first Gambling Commissioner with quarterly instance. Exceptions to this would include statistical financial returns in respect of very serious complaints involving each licensed activity. The data comprising substantial sums of money or issues of

public interest. In this case, it is recommended that the complaint or issue incapable of being resolved be brought to the Gambling Commissioner’s attention at the earliest available opportunity. Kindly note that the term “Gambling Transaction” in this context is given a broad interpretation including, the wide administration of gaming accounts, marketing and any matters designed to affect the gambling transactions themselves. In addition, Licence Holders will be expected to have in place a system for recording and examining customer or third party complaints. This should include adequate resources to address complaints expeditiously, access to an independent adjudication process for appropriate disputes and a means of maintaining a record of all complaints that can be made available to the Gambling Commissioner as and when reasonably required.

Registration of Participants The Act requires operators to ensure that all their players are registered with them in the form specified under the Act (and indeed the Licence Agreement). This is a minimum standard imposed by both the terms of conditions of Licence and the Act and requires the players full name, residential address and age. Needless to say, this information must be kept by the operator in accordance with data protection principles currently applicable. Random checks and dip sampling of accounts by the Gambling Commissioner and other examinations would be subject to proportionate and ad hoc recording.

JANUARY 2009

ISSUE 3

mobile, telephone gambling a reminder that the gambling is provided under the agreed terms and conditions on the website should be acknowledged by the player.

www.gibraltarlawyers.com

Similarly, mobile phone gambling may only draw on funds credited via the parent website or by voice call arrangements where the Customer Services Operator has sight of the player’s gambling account and history. Therefore, it is a condition precedent to the use of mobile phones in gambling under the new Code to conduct every registration, procedure and avail oneself of the terms and conditions of methodology by which gaming is currently gaming through a computer in the offered to the public at large the proposed traditional sense. code of practice recognises the use of This article is necessarily limited in its mobile telephones and notes the scope and, in light of the fact that the additional challenges presented by this subject matter of the article is currently in method of remote gambling. proposal form, regard must be had to the

(c) A statement that the licence holder is regulated under the Act by the Gibraltar Gambling Commissioner (in this regard the final version of the Code could require a live link be set up to the GRA site); and (d) A statement in respect of the permitted age for gambling. Therefore, it is regarded as good practice to include the emblem of the Government of Gibraltar as a link to the Government website and a separate link on the motif of the GRA to the GRA website which would serve as a means of indicating to users that the licence holder is indeed regulated by this body in addition to being licensed by the Government. Given the complexity of various Licence Holders’ websites and web operating structures and given the diversity in which

It is likely that the code will impose preconditions to facilitate mobile gaming. For example, operators may only allow players to use mobile facilities if the player has first registered to play via the licensee’s website and in doing so acknowledges that gambling by mobile phone should be done in conjunction with an internet account and not in isolation of it. This would mean in practice that the player will have to register via a PC. In particular new deposits to the account should only be possible through the website or through voice communication with a live agent. In addition, at the commencement of any

its continuing success on the international stage and of the growing number of awards its various teams are attracting in a wide range of practice areas. ISOLAS has ranked and continues to rank consistently as a

By Christian Rocca

possible changes that may be effected to the actual code. ISOLAS will continue to monitor developments in this area and will continue to keep its clients and partners up to speed on any developments.”

ISOLAS recognised once more ISOLAS has recently been informed of its nomination as “Best Banking and Finance Team-Gibraltar & Spain 2009” by European CEO Magazine. In addition to this nomination, ISOLAS is very proud of

Communiqué Introduction

leading law firm in various fields, including M&A, Banking and Shipping, in the most prestigious legal directories such as Chambers Global, Legal 500 and European Legal Experts.

Associated with

www.gibraltarlawyers.com Portland House Glacis Road PO Box 204 Gibraltar Tel +350 200 78363 Regulated by the Gibraltar Financial Services Commission. Licence Numbers FSC00277B FSC00276B

New Year is a time for change, hope and hard work. Looking back to 2008 and, in particular, the last few months, there have been a number of important developments for Gibraltar Participants from the 24hr and ISOLAS which, Relay For Life, Gibraltar of course, are covered for Cancer Research in the third edition of our newsletter, the Communique. I’m also very happy to note that this publication is going from strength to strength, with a growing number of partners and clients asking to receive it as soon as we print it. What’s more, we’ve had a very helpful response from our readers as to how we might improve and enhance the Communique. In response to that, this edition includes an article from one of our professional partners, Credit Suisse, about cash investment options in the current financial crisis environment. In future editions we will be continuing this partnership and would be grateful to hear from any reader who might have an idea for an item in our Communique. Simply let us know and we’ll be glad to consider it. An important development in the Gibraltar story came on the 18th December 2008 in

On a personal level, I’m very proud of the firm’s participation in September in the very successful 24hr Relay For Life Gibraltar, organised by Cancer Research UK. the shape of a judgment of the European Court of First Instance annulling a decision previously made by the European Commission in respect of Gibraltar’s proposed tax reform. Our article on this deals with the details and explains how important this decision is for Gibraltar’s future as an International Finance Centre. On a personal level, I’m very proud of the firm’s participation in September in the very successful 24hr Relay For Life Gibraltar, organised by Cancer Research UK. The event was extremely well attended and ISOLAS fielded a team of more than twenty participants who, over a 24hr period, took turns to lap the athletics track at Victoria Stadium. As part of our continuing participation in events of this nature a few members of the team and I have been contemplating a challenge to raise funds for the PJ Isola Foundation. On the cards is a long distance charity cycle so watch this space for news of our training and fund raising.

Finally, I hope that 2009 brings the recovery and stabilisation of the financial markets and the confidence which, during the latter part of 2008, dropped to unprecedented levels. We remain at the service of you and your clients and look forward to a 2009 full of prosperity and positive development.

In this issue Page

1. Introduction 2. Cash Is King 3. Arresting Ships In Gibraltar Court Of First Instance Decison 4. Protecting Their Own Pillars Of Hercules 5. Gaming Code Review Part 2

ISOLAS Communique January 2009  

ISOLAS Newsletter

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