At a time when the vast majority of jurisdictions, prudential and otherwise, are distancing themselves from single shareholder banks and those that only exist in filing cabinets, sadly some do not heed the warnings or adopt global standards.
Apparently, the Financial Services Regulatory Commission of Antigua and Barbuda has granted a Class I International Banking License to a Julius Capital Bank Inc., which was incorporated in May 2019, in Antigua and Barbuda.
Observers will recall that this is the Commission that oversaw the R. Allen Stanford debacle, which is still arguably the world's greatest bank robbery.
It is important not to confuse Julius Capital Bank Inc with the long-established and well-respected Julius Capital, a Chicago based credit facilitation company and/or the historic Julius Baer Bank, headquartered in Switzerland.
On its website, Julius Capital Bank Inc. claims to be part of a Swiss Group that has been active for more than 30 years in the field of legal consulting, trust services and asset management.
The Julius Capital Bank Inc. website also states that its London Rappresentative (sic) Office is located at 13 Charles II Street in London, which serves as the registered home of hundreds of other different companies, including Item Consulting Limited.
In Antigua, Julius Capital Bank Inc. is registered c/o B. Hesse & Associates, Long Street, St. John's Antigua. Among other services offered, B. Hesse & Associates serve as licensed agents for Antigua & Barbuda's Citizenship by Investment Programme.
The father of the principal, Mr. Lebrech Hesse, served for over two decades as Antigua's Solicitor General, until recently becoming one of the two Senior Counsels in the Office of the Attorney General
Offshore Alert has revealed that a Certificate of Incumbency issued by the Financial Services Regulatory Commission of Antigua and Barbuda declares that the new Bank has a sole shareholder, Dario Item, identified as a Swiss lawyer, and that he, Dario Item, Andrea Mezzi and Gabriele Rossi are its three Directors.
It should be noted that Mr. Item is also currently Antigua & Barbuda's Ambassador to Monaco, Liechtenstein and Spain. Presumably, as such he has been granted an Antigua & Barbuda diplomatic passport, which in normal circumstances would be expected to afford certain privileges, ease of movement and access to financial as well as diplomatic circles.
Prior to Mr. Item's connection to Julius Capital Bank, Inc, he was the Principal Officer and Director of two financial entities, namely Blue Investment Bank Inc. and Blue Wealth Management Limited, a provider of corporate services, based and licensed in Labuan.
Some readers would be forgiven for never having heard of the jurisdiction.
Labuan is a free trade zone island located near Borneo and Brunei. It is a federal territory of Malaysia and is traditionally known as an offshore hub for deep water gas and oil exploration.
More recently, it had become an international tax haven but now has its own regulator, the Labuan Financial Services Authority.
Crucial to its success has been the number and calibre of leading brand international banks that have established their own footprint in Labuan, among a growing number of block-chain technology and cryptocurrency companies, especially start-ups.
Despite the Island's small size, the Labuan Regulator has developed an uncompromising reputation for good governance and has committed to deal firmly with those flouting corporate and financial regulations.
It is, therefore, particularly disturbing to note that prior to the Financial Services Regulatory Commission of Antigua and Barbuda was licensing Julius Capital Bank in May of 2019, on the 28th of March of the very same year, the Labuan Offshore Financial Services Authority in Malaysia had disqualified and removed Dario Item as principal Officer and Director of Blue Investment Bank Inc. and Blue Wealth Management Limited.
The Labuan Authority had also issued Restriction of Business Notices to the two companies involved.
Following an appeal, however, the Authority updated its Notices on 24th March 2020, saying that both Blue Investment Bank Inc. and Blue Wealth Management Limited had received administrative penalties of RM 10,000.00 (£1,850 approx.) each, with no action taken against the Directors and Principal Officer.
There appears to be no explanation why a reputable regulator moved from imposing massive sanctions to then grant virtually their entire removal.
It is equally unusual for one regulator to accept an application, let alone approve a party already under investigation by another financial services regulator. But then again, Antigua & Barbuda is not known for its adherence to international convention and laws, or even its own Constitution, when it becomes an inconvenience.
When it comes to licensing shell banks, the Government of Antigua and Barbuda has clearly not learned the lessons taught recently and at a heavy cost to the nation.
Footnote - The wording of the enforcement notices is reproduced below the following link for the ease of readers:
16
BLUE INVESTMENT BANK INC (LL 13561)
28.03.2019
-
24.03.2020
[SEE UPDATES BELOW]
(1) Disqualification & Removal from acting as Director of Blue
Investment Bank Inc
I. Dario Item
II. Andrea Mezzi
III. Mauro Giacomo Silva
(2) Disqualification & Removal from acting as Principal Officer
of Blue Investment Bank Inc
I. Dario Item
(3) Restriction of Business of Blue Investment Bank Inc
*Note: Blue Investment Bank Inc, Dario Item, Andrea Mezzi and Mauro
Giacomo Silva have obtained, on an ex-parte basis, Leave to file a
Judicial Review application and a Stay Order against the above
actions on 25 June 2019. Labuan Financial Services Authority is in
the process of responding to the said application
accordingly*
Update [24.3.2020]
Blue Investment Bank Inc. was imposed with an administrative
penalty of RM10,000.00 with no action taken against the Directors.
Blue Investment Bank Inc. has paid the penalty. Accordingly, the
case has been settled administratively with no further actions to
be taken against Blue Investment Bank Inc. Case closed,
disqualification & removal from acting as Director and/or
Principal Officer of Blue Investment Bank Inc, which was suspended
by virtue of the above mentioned Stay Order of High Court, cease to
be in effect on 24 March 2020. The Judicial Review Application is
withdrawn with no liberty to file afresh and no order as to
costs.
17
BLUE WEALTH MANAGEMENT LTD (LL 12322)
06.05.2019
-
24.03.2020
[SEE UPDATES BELOW]
(1) Disqualification & Removal from acting as Director of Blue
Wealth Management Ltd
I. Dario Item
II. Andrea Mezzi
III. Mauro Giacomo Silva
(2) Disqualification & Removal from acting as Principal Officer
of Blue Wealth Management Ltd
I. Dario Item
(3) Restriction of Business of Blue Wealth Management Ltd
*Note: Blue Wealth Management Ltd, Dario Item, Andrea Mezzi and
Mauro Giacomo Silva have obtained, on an ex-parte basis, Leave to
file a Judicial Review application and a Stay Order against the
above actions on 25 June 2019. Labuan Financial Services Authority
is in the process of responding to the said application
accordingly*
Update [24.3.2020]
Blue Wealth Management Ltd was imposed with an administrative
penalty of RM10,000.00 with no action taken against the Directors.
Blue Wealth Management Ltd has paid the penalty. Accordingly, the
case has been settled administratively with no further actions to
be taken against Blue Wealth Management Ltd. Case closed,
disqualification & removal from acting as Director and/or
Principal Officer of Blue Wealth Management Ltd, which was
suspended by virtue of the above mentioned Stay Order of High
Court, cease to be in effect on 24 March 2020. The Judicial Review
Application is withdrawn with no liberty to file afresh and no
order as to costs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.