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VISVESVARAYA TECHNOLOGICAL UNIVERSITY
Belgaum, Karnataka-590014
A Report on
INTERNATIONAL FINANCIAL ACTS
Submitted by,
Ramya.c.v.
Jaya NC glow
DEPARTMENT OF INSTRUMENTATION AND TECHNOLOGY
DAYANANDA SAGAR COLLEGE OF ENGINEERING
(Affiliated to VTU and approved by AICTE)
K.S. Layout, Bangalore-560 078
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1)International Financial Institutions Act of 1977, As Amended*
*includes amendments of 1988 and 2005 Foreign Operations Appropriation Acts
SEC 1301. The Congress finds that
(1) United States assistance to the multilateral development banks should promote sustainable
use of natural resources and the protection of the environment, public health, and the status of
indigenous peoples in developing countries;
(2) multilateral development bank projects, policies, and loans have failed in some cases to
provide adequate safeguards for the environment, public health, natural resources, and
indigenous peoples;
(3) many development efforts of the multilateral development banks are more enduring and less
costly if based on consultations with directly affected population groups and communities;
(4) developing country governments sometimes do not ensure that appropriate policies and
procedures are in place to use natural resources sustainably or consult with affected population
groups and communities, where costs could be reduced or benefits made more enduring; and
(5) in general, the multilateral development banks do not yet provide systematic and adequate
assistance to their borrowers to encourage sustainable resource use and consultation with
affected communities, where costs could be reduced or benefits made more enduring.
SEC. 1302.
The Secretary of the Treasurer and the Secretary of State, in cooperation with the Administrator
of the Agency for International Development, shall vigorously promote mechanisms to
strengthen the environmental performance of these banks. These mechanisms shall include
strengthening organizational, administrative, and procedural arrangements within the banks
which will substantially improve management of assistance programs necessary to ensure the
sustainable use of natural resources and the protection of indigenous peoples.
SEC. 1303.
(a)
(1) In the course of reviewing assistance proposals of the multilateral development banks, the
Administrator of the Agency for International Development, in consultation with the Secretary of
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the Treasury and the Secretary of State, shall ensure that other agencies and appropriate United
States embassies and overseas missions of the Agency for International Development are
instructed to analyze, where feasible, the environmental impacts of multilateral development
loans well in advance of such loans ' approval by the relevant institutions to determine whether
the proposals will contribute to the sustainable development of the borrowing country.
(2) To the extent possible, such reviews shall address the economic viability of the project,
adverse impacts on the environment, natural resources, public health, and indigenous peoples,
and recommendations as to measures, including alternatives that could eliminate or mitigate
adverse impacts.
(3) If there is reason to believe that any such loan is particularly likely to have substantial
adverse impacts, the Administrator of the Agency for International Development, in consultation
with the Secretary of the Treasury and the Secretary of State, shall ensure that an affirmative
investigation of such impacts is undertaken in consultation with relevant Federal agencies. If notclassified under the national security system of classification, the information collected pursuant
to this paragraph shall be made available to the public.
(b)
(1) The Secretary of the Treasury shall instruct the Executive Directors representing the United
States at the multilateral development banks as defined in section 1307(g) to urge the
management and other directors of each such bank, to provide sufficient time between the
circulation of assistance proposals and bank action on those proposals, in order to permit their
evaluation by major shareholder governments.
(2) The Secretary of the Treasury shall instruct such Executive Directors to work with other
countries ' Executive Directors and multilateral development bank management to
(A) improve the procedures of each multilateral development bank for providing its board of
directors with a complete and accurate record regarding public consultation before they vote on
proposed projects with significant environmental implications; and
(B) Revise bank procedures to consistently require public consultation on operational policy
proposals or revisions that have significant environmental or social implications.
(3) Progress under this subsection shall be incorporated into Treasurys required annual report to
Congress on the environmental performance of the multilateral development banks.
(c) Based on the information obtained during the evaluation referred to in subsection (a) of this
section and other available information, the Administrator of the Agency for International
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Development, in consultation with the Secretary of the Treasury and the Secretary of State, shall
identify those assistance proposals likely to have adverse impacts on the environment, natural
resources, public health, or indigenous peoples. The proposals so identified shall be transmitted
to the Committee on Appropriations and the Committee on Banking, Finance and Urban Affairs
of the House of Representatives and the Committee on Appropriations and the Committee onForeign Relations of the Senate, not later than April 1 and October 1 of each year following the
date of enactment of this title.
(d) The Secretary of the Treasury shall forward reports concerning information received under
subsection (a) of this section to the Executive Director representing the United States in the
appropriate bank with instructions to seek to eliminate or mitigate adverse impacts which may
result from the proposal.
SEC. 1304.
The Secretary of the Treasury, in consultation with the Secretary of State and the Administrator
of the Agency for International Development, shall create a system for cooperative exchange of
information with other interested member countries on assistance proposals of the multilateral
development banks.
SEC. 1305.
The Secretary of the Treasury shall instruct the United States Executive Directors of the
multilateral development banks to support the strengthening of educational programs within each
multilateral development bank to improve the capacity of mid-level managers to initiate andmanage environmental aspects of development activities, and to train officials of borrowing
countries in the conduct of environmental analyses.
SEC. 1306.
(a) The Secretary of the Treasury shall instruct the United States Executive Director of each
multilateral development bank to vigorously and continuously urge that each bank identify and
develop methods and procedures to insure that in addition to economic and technical
considerations, unquantified environmental values be given appropriate consideration in decision
making, and include in the documents circulated to the Board of Executive Directors concerning
each assistance proposal a detailed statement, to include assessment of the benefits and costs of
environmental impacts and possible mitigating measures, on the environmental impact of the
proposed action, any adverse environmental effects which cannot be avoided if the proposal is
implemented, and alternatives to the proposed action.
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(b) The Secretary of the Treasury shall instruct the United States Executive Director of each
multilateral development bank to vigorously and continuously promote
(1) increases in the proportion of loans supporting environmentally beneficial policies, projects,
and project components;
(2) the establishment of environmental programs in appropriate policy-based loans for the
purpose of improving natural resource management, environmental quality, and protection of
biological diversity;
(3) increases in the proportion of staff with professional training and experience in ecology and
related areas and in the areas of anthropological and sociological impact analysis to ensure
systematic appraisal and monitoring of environmental and sociocultural impacts of projects and
policies;
(4) active and systematic encouragement of participation by borrowing countries
nongovernmental environmental, community and indigenous peoples ' organizations at all stages
of preparations for country lending strategies, policy based loans, and loans that may have
adverse environmental or sociocultural impacts; and
(5) full availability to concerned or affected nongovernmental and community organization, early
in the preparation phase and at all subsequent stages of planning of full documentary information
concerning details of design and potential environmental and sociocultural impacts of proposed
loans.
SEC. 1307.
Assessment of Environmental Impact on Proposed Multilateral Development Bank Actions.
(a) ASSESSMENT REQUIRED BEFORE FAVORABLE VOTE ON PROPOSAL The
Secretary of the Treasury shall instruct the United States Executive Director of each multilateral
development bank not to vote in favor of any proposal (including but not limited to any loan,
credit, grant, guarantee) which would result or be likely to result in significant impact on the
environment, unless the Secretary, after consultation with the Secretary of State and the
Administrators of the United States Agency for International Development and the
Environmental Protection Agency, determines that for at least 120 days before the date of the
vote
(1) an assessment analyzing the environmental impacts of the proposed action, including
associated and cumulative impacts, and of alternatives to the proposed action, has been
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completed by the borrower or the bank and has been made available to the board of directors of
the bank; and
(2) Such assessment or a comprehensive summary of the assessment (with proprietary
information redacted) has been made available to affected groups, and local nongovernmentalorganizations and notice of its availability in the country and at the bank has been posted on the
banks website.
(b) Access to Assessments in All Member Countries.
The Secretary of the Treasury shall seek the adoption of policies and procedures, through
discussions and negotiations with the other member countries of the multilateral development
banks and with the management of such banks, which result in access by governmental agencies
and interested members of the public of such member countries, to environmental assessments or
documentary information containing comprehensive summaries of such assessments whichdiscuss the environmental impact of prospective projects and programs being considered by such
banks. Such assessments or summaries should be made available to such governmental agencies
and interested members of the public at least 120 days before scheduled board action, and public
participation in review of the relevant environmental information should be encouraged.
(c) Consideration of Assessment. The Secretary of the Treasury shall
(1) Ensure that an environmental impact assessment or comprehensive summary of such
assessment described in subsection (a) of this section accompanies loan proposals through the
agency review process; and
(2) take into consideration recommendations from all other interested Federal agencies and
interested members of the public.
(d) Development of Procedures for Systematic Environmental Assessment.
The Secretary of the Treasury, in consultation with other Federal agencies, including the
Environmental Protection Agency, the Department of State, and the Council on Environmental
Quality, shall
(1) instruct the United States Executive Director of each multilateral development bank to
initiate discussions with the other executive directors of the respective bank and to propose that
the respective bank develop and make available to member governments of, and borrowers from,
the respective bank, within 18 months after December 19, 1989, a procedure for the systematic
environmental assessment of development projects for which the respective bank provides
financial assistance, taking into consideration the Guidelines and Principles for Environmental
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Impact Assessment promulgated by the United Nations Environmental Programme and other
bilateral or multilateral assessment procedures; and
(2) in determining the position of the United States on any action proposed to be taken by a
multilateral development bank, develop and prescribe procedures for the consideration of, amongother things
(A) The environmental impact assessment of the action described in subsection (a);
(B) interagency and public review of such assessment; and
(C) other environmental review and consultation of such action that is required by other law.
(e) Use of United States Personnel.
The Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of the
Interior, the Administrator of the Environmental Protection Agency, the Chairman of the Council
on Environmental Quality, the Administrator of the Agency for International Development, and
the Administrator of the National Oceanic and Atmospheric Administration, shall
(1) Make available to the multilateral development banks, without charge, appropriate United
States Government personnel to assist in
(A) training bank staff in environmental impact assessment procedures;
(B) providing advice on environmental issues;
(C) preparing environmental studies for projects with potentially significant environmental
impacts; and
(D) preparing documents for public release, and developing procedures to provide for the
inclusion of interested nongovernmental organizations in the environmental review process; and
(2) Encourage other member countries of such banks to provide similar assistance.
(f) Reports.
(1) In General. - The Secretary of the Treasury shall submit to the Committees on Foreign
Relations and Environment and Public Works of the Senate and the Committee on Banking,
Finance and Urban Affairs of the House of Representatives
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(A) not later than the end of the 1-year period beginning on December 19, 1989 , a progress
report on the efficacy of efforts by the United States to encourage consistent and timely
environmental impact assessment of actions proposed to be taken by the multilateral
development banks and on the progress made by the multilateral development banks in
developing and instituting environmental assessment policies and procedures; and
(B) not later than January 1, 1993, a detailed report on the matters described in subparagraph
(A).
(2) Availability of Reports. - The reports required by paragraph (1) shall be made available to the
member governments of and the borrowers from, the multilateral development banks, and to the
public.
(g) MULTILATERAL DEVELOPMENT BANK DEFINED In this title, the term `multilateral
development bank ' means the International Bank for Reconstruction and Development, theEuropean Bank for Reconstruction and Development, the International Development
Association, the International Finance Corporation, the Multilateral Investment Guarantee
Agency, the African Development Bank, the African Development Fund, the Asian
Development Bank, the Inter-American Development Bank, the Inter-American Investment
Corporation, any other institution (other than the International Monetary Fund) specified in
section 1701(c)(2), and any subsidiary of any such institution.
International Financial Activity Act Overview
International Financial Activity Act
The International Financial Activity Act, (IFAA) and related regulation provide the
Legislative framework for the International Financial Activity (IFA) Program described in the
bulletin.
The IFA Program came into effect on September 1, 2004 and replaces the International
Financial Business (Tax Refund) Act, which has been repealed.
The IFA Program provides eligible corporations and specialists who work for those
Corporations a refund of the British Columbia income tax paid on income related to
The corporations international financial activities carried on in British Columbia.
On February 21, 2006, the government proposed to eliminate the interest adjustment
Formula in the calculation of the tax refund, effective September 1, 2004, the
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Commencement date of the IFAA. This bulletin assumes the amendments will be
Enacted by the legislature and proclaimed in force.
The IFA program is expanded, effective January 1, 2006, to include refunds of
British Columbia corporate income taxes on income derived from certain patents.
Please read this bulletin in conjunction with Bulletin IFA 002, Life Science Patents
2)USA PATRIOT Act
The USA PATRIOT Act was passed by the United States Congress in 2001 as a response to
the September 11, 2001 attacks. It has ten titles, each containing numerous sections. Title III:
International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 is
actually an act of Congress in its own right as well as being a title of the USA PATRIOT Act,
and is intended to facilitate the prevention, detection and prosecution of international moneylaundering and the financing of terrorism. The title's sections primarily amend portions of
the Money Laundering Control Act of 1986 and the Bank Secrecy Act of 1970.
The provisions of Title III are divided into three subtitles. The first deals primarily with
strengthening banking rules specifically against money laundering, especially on the
international stage. Communication between law enforcement agencies and financial institutions,
as well as among institutions, is expanded by the second subtitle, which also increases record
keeping and reporting requirements. The final portion of the title deals with currency smuggling
and counterfeiting, including quadrupling the maximum penalty for counterfeiting foreign
currency
Findings
The United States Congress found that money laundering "provides the financial fuel that
permits transnational criminal enterprises to conduct and expand their operations to the detriment
of the safety and security of American citizens" and that it is critical to the financing of global
terrorism and terrorist attacks. Money laundering is used "as protective covering for the
movement of criminal proceeds and the financing of crime and terrorism". Findings (4) and (5)
state that:
"certain jurisdictions outside of the United States that offer `offshore' banking and related
facilities designed to provide anonymity, coupled with weak financial supervisory andenforcement regimes, provide essential tools to disguise ownership and movement of
criminal funds, derived from, or used to commit, offenses ranging from narcotics
trafficking, terrorism, arms smuggling, and trafficking in human beings, to financial
frauds that prey on law-abiding citizens... [T]transactions involving such offshore
jurisdictions make it difficult for law enforcement officials and regulators to follow the
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trail of money earned by criminals, organized international criminal enterprises, and
global terrorist organizations "
Congress in particular noted that correspondent accounts are vulnerable to use by money
launderers as it is easier to obscure the identities of the owners of such accounts than with
other types of bank accounts, and that private banking services can be susceptible to
manipulation by money launderers.
Congress also found that:
"United States anti-money laundering efforts are impeded by outmoded and inadequate
statutory provisions that make investigations, prosecutions, and forfeitures more difficult,
particularly in cases in which money laundering involves foreign persons, foreign banks,
or foreign countries"
"The ability to mount effective counter-measures to international money launderers
requires national, as well as bilateral and multilateral action, using tools specially
designed for that effort"
Purposes
The purposes of the title are defined in section 302. It states that:
The purposes of this title are
(1) To increase the strength of United States measures to prevent, detect, and prosecute
international money laundering and the financing of terrorism;
(2) To ensure that--
(A) banking transactions and financial relationships and the conduct of such transactions
and relationships, do not contravene the purposes of subchapter II of chapter 53 of title31, United States Code, section 21 of the Federal Deposit Insurance Act, or chapter 2 of
title I of Public Law 91-508 (84 Stat. 1116), or facilitate the evasion of any such
provision; and
(B) The purposes of such provisions of law continue to be fulfilled, and such provisions
of law are effectively and efficiently administered;
(3) To strengthen the provisions put into place by the Money Laundering Control Act of
1986 (18 U.S.C. 981 note), especially with respect to crimes by non-United States
nationals and foreign financial institutions;
(4) to provide a clear national mandate for subjecting to special scrutiny those foreignjurisdictions, financial institutions operating outside of the United States, and classes of
international transactions or types of accounts that pose particular, identifiable
opportunities for criminal abuse;
(5) to provide the Secretary of the Treasury (in this title referred to as the `Secretary')
with broad discretion, subject to the safeguards provided by the Administrative Procedure
Act under title 5, United States Code, to take measures tailored to the particular money
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laundering problems presented by specific foreign jurisdictions, financial institutions
operating outside of the United States, and classes of international transactions or types of
accounts;
(6) To ensure that the employment of such measures by the Secretary permits appropriate
opportunity for comment by affected financial institutions;(7) To provide guidance to domestic financial institutions on particular foreign
jurisdictions, financial institutions operating outside of the United States, and classes of
international transactions that are of primary money laundering concern to the United
States Government;
(8) To ensure that the forfeiture of any assets in connection with the anti-terrorist efforts
of the United States permits for adequate challenge consistent with providing due process
rights;
(9) To clarify the terms of the safe harbor from civil liability for filing suspicious activity
reports;
(10) to strengthen the authority of the Secretary to issue and administer geographic
targeting orders, and to clarify that violations of such orders or any other requirement
imposed under the authority contained in chapter 2 of title I of Public Law 91-508 and
subchapters II and III of chapter 53 of title 31, United States Code, may result in criminal
and civil penalties;
(11) to ensure that all appropriate elements of the financial services industry are subject
to appropriate requirements to report potential money laundering transactions to proper
authorities, and that jurisdictional disputes do not hinder examination of compliance by
financial institutions with relevant reporting requirements;
(12) To strengthen the ability of financial institutions to maintain the integrity of theiremployee population; and
(13) to strengthen measures to prevent the use of the United States financial system for
personal gain by corrupt foreign officials and to facilitate the repatriation of any stolen
assets to the citizens of countries to whom such assets belong.
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3)Offshore Banking Act
Offshore banks are financial establishments used to hold funds and trusts through deposits andthe sale of financial services. The Offshore Banking Act was first enacted in Barbados in 1979
and has since been amended. The details of its establishment and legacy are best described
through its purpose, conditions and related legislation.
1. Purposeo The chief purpose of the legislation is to provide means for the licensing of offshore banks.
Although the minister of finance is ultimately responsible for approving or denying applications
for licenses, the financial institutions governed under the act are primarily administered through
the Central Bank of Barbados. Customers of the existing approved banking services include
foreign sales corporations and international business companies. Services offered includecommercial loans for international customers, international deposit transactions and foreign
exchange transactions.
Qualifications
o Service providers seeking licenses to qualify as an offshore banking provider must meet certainqualifications. First, they must receive approval from the minister of finance and be able to pay
an annual fee equivalent to $12,000 in U.S. dollars. In addition, they must show they are
qualified to conduct foreign business transactions, and they must show proof of their
incorporation as a company as well as provide personal information on their board of directors.
Other requirements include providing shareholder information as well as information forshareholder and director residents in Barbados.
Benefits
o The proposed benefits of offshore banking include no tax being withheld as well as no direct taxor capital gains imposed on the service provider. In addition, the service providers are only
required to pay between 1 percent and 2.5 percent in income tax on profits that accrue in excess
of $1 million. Lastly, the legislation operates under the condition that offshore banking services
are exempt from the Exchange Control Act, which would otherwise require excessive taxes on
dividends, royalties and other major assets controlled under the Offshore Banking Act.
Subsequent Legislation
o In 2003, the International Financial Services Act replaced the amended Offshore Banking Act of1979. Under the new legislation, the definition of international financial services in Barbados
was altered to include a broader scope under which foreign money could be received and used in
the country. In addition, this new legislation required that all licensed businesses performing
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foreign financial services have a place of business in Barbados and undergo on site examination
by the Central Bank of Barbados.
Anti-Money Laundering
o The application process for new institutions has been tightly restricted by the country's centralbank as a result of past foreign money laundering schemes. In 1998, the Barbados Parliament
established the Money Laundering (Prevention and Control) Act as a regulatory control for
domestic and offshore financial institutions in the country. The legislation required all
institutions to report all unusual transactions as well as establish effective methods for protecting
4)Bretton Woods and Related Agreements Act
R.S.C., 1985, c. B-7
An Act for carrying into effect the Agreements for an International Monetary Fund, an
International Bank for Reconstruction and Development, an International Development
Association and an International Finance Corporation and the Convention establishing the
Multilateral Investment Guarantee Agency
WHEREAS the United Nations Monetary and Financial Conference held at Bretton Woods
in July 1944 prepared the Articles of Agreement set out in Schedule I for an International
Monetary Fund and in Schedule II for an International Bank for Reconstruction and
Development;
AND WHEREAS since that time there have been prepared Articles of Agreement set out in
Schedule III for an International Development Association, in Schedule IV for an International
Finance Corporation and in Schedule V for a Multilateral Investment Guarantee Agency;
AND WHEREAS it is expedient that Canada become a member of the International
Monetary Fund, the International Bank for Reconstruction and Development, the International
Development Association, the International Finance Corporation and the Multilateral Investment
Guarantee Agency and that provision be made for acceptance by Canada of the Agreements and
the Convention therefore and for carrying out the obligations and exercising any rights of Canada
there under;
THEREFORE Her Majesty, by and with the advice and consent of the Senate and House of
Commons of Canada enacts as follows:
R.S., 1985, c. B-7, Preamble; R.S., 1985, c. 24 (1st Supp.), s. 2, c. 32 (3rd Supp.), s. 2.
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Short title
1. This Act may be cited as the Bretton Woods and Related Agreements Act.
R.S., 1985, c. B-7, s. 1; R.S., 1985, c. 24 (1st Supp.), s. 3.
Agreements approved
2. The Agreements for an International Monetary Fund, an International Bank for
Reconstruction and Development, an International Development Association and an
International Finance Corporation and the Convention establishing the Multilateral Investment
Guarantee Agency, in this Act referred to as the Agreements, set out in Schedules I to V,
respectively, are hereby approved.
R.S., 1985, c. B-7, s. 2; R.S., 1985, c. 24 (1st Supp.), s. 4, c. 32 (3rd Supp.), s. 3.
Acceptance authorized
3. The Governor in Council may authorize the acceptance on behalf of Canada of the
Agreements and may make such appointments, do and authorize such acts and things and make
such orders and regulations as are necessary for that purpose and for carrying out the obligations
and exercising any rights of Canada under the Agreements.
R.S., c. B-9, s. 2; 1980-81-82-83, c. 128, s. 1.
Establishment of par value
4. Without restricting the generality of section 3 and notwithstanding any other statute or law,the Governor in Council may take such measures as he deems necessary to establish, for the
purposes and in accordance with the terms of the Agreement for an International Monetary Fund,
the par value of the Canadian dollar.
R.S., c. B-9, s. 2; 1980-81-82-83, c. 128, s. 1.
5)Agreement on Internal Trade Implementation Act
S.C. 1996, c. 17
Assented to 1996-06-20
An Act to implement the Agreement on Internal Trade
WHEREAS the Government of Canada together with the Governments of Newfoundland,
Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan,
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Alberta, British Columbia, the Northwest Territories and the Yukon Territory have entered into
an Agreement on Internal Trade;
AND WHEREAS the reduction or elimination of barriers to the free movement of persons,
goods, services and investments is essential for the promotion of an open, efficient and stabledomestic market to enhance the competitiveness of Canadian business and sustainable
development;
NOW, THEREFORE, Her Majesty, by and with the advice and consent of the Senate and House
of Commons of Canada enacts as follows:
SHORT TITLE
Short title
1. This Act may be cited as the Agreement on Internal Trade Implementation Act.
INTERPRETATION
Definitions
2. in this Act,
Agreement
Accord
Agreement means the Agreement on Internal Trade signed in 1994 and published in Part Me
of the Canada Gazette;
Minister
Ministre
Minister, in respect of any provision of this Act, means the member of the Queens Privy
Council for Canada designated as the Minister for the purposes of that provision under section 8.
PURPOSE
3. The purpose of this Act is to implement the Agreement.
HER MAJESTY
Binding on Her Majesty
4. This Act is binding on Her Majesty in right of Canada.
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GENERAL
Prohibition of private cause of action
5. (1) there is no cause of action and no proceedings of any kind shall be taken, without the
consent of the Attorney General of Canada, to enforce or determine any right or obligation that is
claimed or arises solely under or by virtue of section 9 or 11, or an order made under section 9.
Where private cause of action under Agreement
(2) Except to the extent provided in Part B of Chapter Seventeen of the Agreement, there is
no cause of action and no proceedings of any kind shall be taken, without the consent of the
Attorney General of Canada, to enforce or determine any right or obligation that is claimed or
arises solely under or by virtue of the Agreement.
6)INTERNATIONAL BUSINESS ACTIVITY ACT
Definitions
1 In this Act:
"Assess", in respect of assessing a penalty against a person under section 29 [assessment of
administrative penalty], includes reassess;
"Business" has the same meaning as in section 248 (1) of the federal Act but does not include an
adventure or concern in the nature of trade;
"Claimant" means
(a) A registered corporation or a corporation that previously was a registered corporation,
(b) AN IB specialist or an individual who previously was an IB specialist;
(c) In the definition of "claimant information" and in sections 46 [attachment] and
58 [communication of information], any other person assessed a penalty under section
29 [assessment of administrative penalty] or a director liable to pay an amount under section
48 [liability of directors];
"Claimant information" means information of any kind and in any form relating to one or
more claimants(A) that is obtained for the purposes of this Act by or on behalf of the minister, or
(B) that is prepared from information referred to in paragraph (a),
But does not include information that does not directly or indirectly reveal the identity of the
claimant to whom the information relates;
"Commissioner" means the Commissioner of Income Tax;
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"Designated international business" means a designated international business specified in the
regulations;
"determine", in respect of determining the amount of any tax refund, interest payable on a tax
refund under section 33 [interest on tax refunds and refundable fee]or interest payable by a
person under section 35 [interest on recoverable amount], includes predetermine;"Federal Act" means the Income Tax Act(Canada);
"IB specialist" means an individual who is registered under section 14 or who is an IFA
specialist;
"IFA specialist" means an individual who was first registered under section 14 before March 4,
2010;
"International business" in relation to a corporation, means the following types of businesses:
(a) International financial business;
(b) International film distribution business;
(c) International patent business;
"International film distribution business" means an international film distribution business
that meets the requirements of the regulations and, if required under the regulations, is certified
in accordance with the regulations;
"International financial activity" means an international financial activity under section 2;
"International financial business", in relation to a corporation, means a business
(A) that is a qualifying financial business carried on by the corporation through a fixed place of
business in British Columbia, and
(b) All the activities of which are international financial activities;
"International patent business" means an international patent business that meets the
requirements of the regulations and, if required under the regulations, is certified in accordance
with the regulations;
"Non-resident" has the same meaning as in section 248 (1) of the federal Act;
"Person" has the same meaning as in section 248 (1) of the federal Act and includes a
partnership;
"Permanent establishment" has the same meaning as in section 400 (2) of the Income Tax
Regulations (Canada);
"Property" has the same meaning as in section 248 (1) of the federal Act;
"Qualifying financial business" means a qualifying financial business under theregulations;"qualifying transaction" means a qualifying transaction under the regulations;
"Recoverable amount" means
(a) The amount a person is liable to pay to the government under section 34 [liability for
recoverable amount], or
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(b) in sections 41 to 45, 47, 49, 50 and 58, the amount a director is liable to pay to the
government under section 48 [liability of directors];
"Registered corporation" means a corporation that is registered under section
10 [registration] and whose registration is not suspended or cancelled;
"Report" means a report under section 26 [report respecting IFA specialists];"Return" means a return under section 24 [return];
"Securities Corporation" means
(a) A savings institution, or
(b) A corporation registered under the Securities Actas a dealer or underwriter;
"Society" means the International Financial Centre British Columbia Society;
"Tax refund" means a tax refund under this Act;
"Transaction" includes an arrangement or event.
International financial activity
2(1) in this section:
"Non-resident broker" means a non-resident person who
(a) Is authorized under the laws of a foreign jurisdiction to trade in securities as principal or
agent,
(b) Is not registered under the Securities Actand is not authorized under a similar law of another
province to trade in securities as principal or agent, and
(c) Is not related to a corporation that is registered under the Securities Actor authorized under asimilar law of another province to trade in securities as principal or agent;
"Non-resident person" does not include
(a) A partnership unless all of the partners of the partnership are non-resident persons, or
(b) A person who carries on a business through a permanent establishment in Canada, but only in
respect of that business.
(2) Subject to subsections (3) to (5), any of the following is an international financial activity of a
corporation:
(A) Accepting deposits in any currency from a non-resident person;
(b) Making deposits in any currency with a non-resident person;
(c) Making loans in any currency to a non-resident person;
(d) Borrowing in any currency from a non-resident person;
(e) Guaranteeing the payment of a debt if all of the debtors or creditors are non-resident persons;
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(f) If the corporation is a savings institution,
(I) Issuing and accepting letters of credit, or
(ii) Handling documentary collections, in respect of a transaction of which not more than one
party is resident in Canada;
(g) Acting
(I) if the corporation is a securities corporation,
(A) as principal in making or offering to make with a non-resident person an agreement for
acquiring, disposing of, subscribing for or underwriting securities, or
(B) as agent for a person resident in Canada in making or offering to make with a non-resident
person an agreement for acquiring, disposing of, subscribing for or underwriting securities,
except securities that are listed on a stock exchange prescribed in section 3200 of the Income Tax
Regulations (Canada),
(ii) if the corporation is not a securities corporation, as principal in making or offering to makewith a non-resident person an agreement for acquiring or disposing of prescribed securities, or
(iii) as agent for a non-resident person in making or offering to make with a person resident in
Canada or another non-resident person an agreement for acquiring, disposing of, subscribing for
or underwriting securities;
(h) Insuring or reinsuring prescribed risks
(i) of, or relating to, non-resident persons, and
(ii) Relating to property situated or events occurring outside of Canada;
(J) Providing financial advice, other than prescribed financial advice, to non-resident persons;
(j) Dealing in foreign exchange other than on the corporation's own account, if the corporation is
(i) a savings institution,
(ii) A corporation whose primary business is dealing in foreign exchange, or
(iii) A prescribed corporation;
(k) Managing, for a fee or commission, foreign exchange activities for non-resident persons;
(l) Managing, for a fee or commission, investments for non-resident persons;
(m) managing, for a fee or commission and for persons resident in Canada, investments in
securities that are issued by a non-resident person and that are not listed with a stock exchangeprescribed in section 3200 of the Income Tax Regulations (Canada);
(n) Preparing stock market or other financial research, other than prescribed financial research,
for the exclusive use of non-resident persons;
(o) Collecting trade accounts that
(I) Are receivable from a non-resident person, and
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(ii) Have been bought outright from the seller and without recourse to the seller;
(p) leasing property to a non-resident person by means of a direct financing lease, as defined in
the Handbook of The Canadian Institute of Chartered Accountants, as amended from time to
time;
(q) [Repealed 2010-18-37.]
(q.1) [Repealed 2010-18-37.]
(q.2) [Repealed 2010-18-37.]
(r) providing, to a non-resident person, administrative support services, other than prescribed
administrative support services, that are directly related to a financial activity of the non-resident
person;
(r.1) [Repealed 2010-18-37.]
(s) Providing, to a non-resident person, services, equipment and premises for continuing thebusiness operations of the non-resident person if primary equipment or premises used by the
non-resident person becomes temporarily non-operational;
(t) Any other prescribed financial activity that is conducted exclusively for non-resident persons
and from which the corporation earns fee or commission income.
(3) An activity referred to in subsection (2) (c), (d), (f), (h) and (j) (ii) and (iii) is not an
international financial activity unless the corporation carries on the activity for, with or on behalf
of a person who is dealing at arm's length with and who is not affiliated with the corporation.
(3.1) an activity referred to in subsection (2) (a) to (d) is not an international financial activity
unless the corporation carries on the activity as principal in a debtor creditor relationship.
(4) Subsection (3) does not apply in respect of subsection (2) (h) if the corporation is registered
as a captive insurance company under the Insurance (Captive Company) Act.
(5) An activity referred to in subsection (2) (g) is not an international financial activity if the
corporation is acting in respect of securities of the capital stock of
(a) The corporation, or
(b) A person affiliated with the corporation.
(6) For the purposes of subsection (2) (g) (i) and (ii), if a corporation is acting as principal oragent in making or offering to make an agreement referred to in that subsection with a non-
resident broker acting as agent for another person, the non-resident broker is deemed to be the
non-resident person.
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Amounts fixed by assessment or determination
3 A reference in this Act to an amount, in respect of a claimant, under the Income Tax Actor
federal Act that is fixed, subject to variation on objection or on appeal, by assessment,
reassessment, determination or redetermination in accordance with the Income Tax Actor federal
Act is a reference to that amount as fixed in accordance with the applicable Act.
Dealing at arm's length and affiliated persons
4 Sections 251 and 251.1 of the federal Act apply for the purposes of this Act.
Resident in Canada
5 Section 250 of the federal Act applies for the purposes of this Act.
Series of transactions
6 For the purposes of this Act, a series of transactions is deemed to include any related
transactions completed in contemplation of the series.
Taxation year
7 The taxation year under this Act for a corporation or individual is the same as the taxation year
under the federal Act for the corporation or individual.
Application
8 (1) If a corporation is a registered financial institution under the International Financial
Business (Tax Refund) Acton August 31, 2004, this Act applies to the corporation only for
taxation years beginning on or after September 1, 2004.
(2) This Act applies to an individual for taxation years beginning on or after January 1, 2005.