(Seychelles News Agency) - The Organisation for Economic Co-operation and Development (OECD) will carry out a review later this year to test the effectiveness of financial services laws amended in Seychelles in 2021, says a top government official.

According to the Financial Services Authority (FSA), this review will ensure that the island nation's financial sector is complying with international standards for the exchange of information on tax matters relating to corporate products.

FSA chief executive Damien Thesee told SNA that international business companies (IBCs) registered in Seychelles have been given until the February 6 deadline to ensure all their accounting information is in order.

"One of our failures in the past was the inability to provide accounting information to other competent authorities from other jurisdictions upon request and this was one of the reasons why Seychelles was blacklisted as we could not exchange information for tax purposes," Thesee explained.

Thesee said that the deadline will not be extended despite receiving requests from some partners in the sector.

"This is a commitment to the EU and the review will establish where we are. Maybe the industry and the government were not on the same page in the past, but it is important to follow international norms as we do not want the risks associated with the financial sector to lead the country to be blacklisted again and lose correspondent banking relationship which in return affect other sectors," he said.

Seychelles, an archipelago in the western Indian Ocean, was added to the European Union's (EU) list of non-cooperative jurisdictions for tax purposes in February 2020 and was upgraded to the grey list last October. 

However, the EU was concerned that Seychelles did not get a rating of at least "largely compliant" from the OECD global forum on the exchange of tax information with other countries. In April 2020, Seychelles got a rating "partially compliant" in the OECD review.

One of the laws amended in 2021 was the International Business Companies Act, introducing the obligation for corporate service providers to preserve information of all IBCs under their administration for a minimum period of seven years.

The information includes the registers which the companies are required to keep as well as their accounting records. This is also extended to companies that have been dissolved and struck off. These will then be handed over to FSA when the service providers cease to operate to ensure that information requested by foreign authorities is always accessible.

Thesee added that the sector performed well in 2021 earning SCR167million ($12.1 million) as of November last year out of which SCR95 million ($6.9 million) were paid to the government as dividends.

He told SNA that revision of the law might affect this year's performance.

"We will know the full impact of the revision after February, but we do expect a number of companies to close down and only the good actors will remain. Having said that, we do not want to attract mass numbers but bad operators. We want those that will conform to the laws", says Thesee.

As of November 2021, there were 54,764 IBCS registered in Seychelles.