Interpretation

(1) In this Act, unless the context otherwise requires“advertisement” means any form of advertising intended to promote interest in any product, process, institution, whether notified, published, mailed, posted, inserted, distributed electronically or otherwise transmitted by any means or device– (a) in a newspaper, magazine, journal or other publication; (b) by the display of cinematographic notices; (c) by means of circulars, brochures, pamphlets, optically or electronically readable devices or handbills; 12 (d) by an exhibition of photographs or cinematographic films; (e) by way of sound broadcasting or television, on- air or by cable; (f) by way of computer-readable data storage devices, computer networks, satellite or telephone; or (g) by way of solicitation in any form; “affiliate” means an entity that directly or indirectly controls, or is under common control with, another entity; “Appeal Board” means the Domestic Banks and Financial Institutions Appeal Board established by section 128 of this Act; “assigned capital” means such portion of the capital of a foreign licensee consisting of unimpaired assets, as determined by the Central Bank, and assigned to the exclusive use of its operations in Belize; “auditor” means the partners of any firm of public accountants that is a member of the Institute of Chartered Accountants of Belize that has been designated in writing by the Central Bank as the approved auditor of a licensee; “bank” means any body corporate duly licensed under this Act to conduct banking business and all offices and branches of a bank in Belize shall be deemed to be one bank, except as otherwise expressly provided; “banking business” means the business of soliciting and receiving money from the public through the acceptance of deposits on current account, deposit account or other similar account which may be withdrawn by check, draft, order or 13 notice, and using that money for the granting of credit facilities, to customers and, generally, the undertaking of any business appertaining to the business of commercial banking, but does not include any such business conducted solely with persons not resident in Belize exclusively in a currency or currencies other than the Belize dollar under an enactment authorising the carrying on of such business; “board of directors” means the most senior governing body of management of a body corporate holding a licence under this Act, the members of which are “directors” as defined in this section; “body corporate” means an incorporated body and any other legal person or entity wherever or however incorporated, and includes a company, but excludes an individual; “borrower group” includes– (a) a family group comprising an individual and his spouse, parents, children and dependants of the individual; (b) a company in which the family group indicated in paragraph (a) has controlling (c) a company in which the family group indicated in paragraph (a) has a substantial (d) a group of companies which has a common shareholder with substantial investment; (e) a group of companies which has a common controlling interest; 14 (f) a group of persons in which the credit worthiness, ability to generate funds or the future viability of each, depends on one or other members of the group; (g) a group of persons in which one member has power directly or indirectly to control the other members; (h) two or more borrowers, whether individuals, companies or unincorporated bodies, whether on a joint or separate basis, who, in the opinion of the Central Bank, are interrelated through common ownership, control or management; (i) any other group of persons whose relationship with each other is such that it may, in the opinion of the Central Bank, lead to a conflict of interest or other regulatory risk; “branch” means– (a) an office or place of business, whether in Belize or elsewhere, where a licensee carries on all or any part of its banking business or financial business, other than its principal place of business in Belize; or (b) an office or place of business in Belize where a foreign licensee carries on all or any part of its banking business or financial business in “business of securities” means the business of brokering and dealing in securities as conducted by a broker and dealer respectively, as defined in the relevant Act; 15 “capital” means the total of paid up share capital, statutory reserve fund, share premium account, retained earnings, and any other capital account approved by the Central Bank; “Central Bank” means the Central Bank of Belize established under the Central Bank of Belize Act; CAP. 262. “company” means a legal person established under companies legislation in any jurisdiction in or outside of Belize, but does not include a limited liability partnership; “competent judicial authority” means a court, as defined in this Act, whether in Belize or another jurisdiction; “counterparty” for the purpose of measuring credit exposure means the borrower or customer, the person guaranteed, the issuer of a security in the case of an investment in a security, or the party with whom a contract is made or obligor in the case of a derivative contract; “Court” means a governmental body that adjudicates legal disputes; “credit exposure” means the amount at risk arising from the extension of credit or funds by a licensee and includes, without (a) facilities, including equities, participations, guarantees, and acceptances; (b) claims on a counterparty including actual and potential claims that would arise from the drawing down in full of undrawn advised facilities, whether revocable or irrevocable, conditional or unconditional, that the licensee has committed itself to provide, arrange, purchase or underwrite; and (c) contingent liabilities arising in the normal course of business, and which would arise from the drawing down in full of undrawn advised facilities, whether revocable or irrevocable, conditional or unconditional, that the licensee has committed itself to provide; “credit facilities” include loans, advances, lines of credit, overdrafts, credit cards, commitment letters, standby facilities, letters of credit and any other facilities or arrangements whereby a licensee agrees to provide funds, financial guarantees or commitments to a customer, or the licensee undertakes on behalf of a customer, a financial liability to another person; “demand deposit” means any deposit repayable to a depositor upon the demand of such person, or withdrawable or transferable by the depositor upon advance notice of less than seven days or without prior notice by cheque, draft or order, electronically or via computerized networks, or by any other means; “deposit” means– (a) the unpaid balance of money received or held by a bank in the usual course of business and for which it has given or is obligated to give credit to a demand, passbook savings or time account or which is evidenced by its certificate of deposit, certificate of indebtedness or other acknowledgement of obligation; (b) money received or held by a bank or the credit given for money or its equivalent received or held by a bank, in the usual course of business for a special or specific purpose, regardless of the legal relationship thereby established, including but not limited to escrow funds, funds held as security for an obligation due to the bank or others, funds deposited by a debtor to meet maturing obligations, funds held to meet its acceptance or letters of credit, but does not include funds which are received by the bank for immediate application to the satisfaction or reduction of indebtedness to the receiving bank; (c) an outstanding draft (including advice or authorization to charge the bank’s balance at another bank), cashier’s cheque, money order, or other official cheque or draft received by a bank and which has been issued by another bank in the usual course of business for any purpose, including but not limited to those issued in payment for services, dividends, or purchases; and (d) such liabilities or other obligations as the Central Bank may specify by Circulars to be a deposit for purposes of this Act; “deposit liabilities” means those liabilities of a licensee represented by deposits held by that licensee; “director” means an individual occupying the position of director or member or alternate member of the governing board of management of a body corporate or other entity by whatever name he may be called and includes a member of a local managing board of a body corporate whose head office is situated outside Belize or which is incorporated outside Belize; “dollar” means the Belize dollar; 18 “entity” means a body corporate, company, trust, partnership, fund, an unincorporated association or organization, joint venture, the government of Belize and any agency thereof and the government of a foreign country or any political subdivision thereof and any agency thereof; “financial business” means the business of receiving funds from the public through the obtaining of loans, advances, extensions of credit, investments, sales of securities of any kind and the relending or reinvestment of such funds in loans to the public or to any person or entity, advances to the public or to any person or entity, shares or securities of any kind; or the business of a trust corporation, or securities brokerage house; as well as the types of businesses set out in Schedule I to this Act, but does not include a banking business or an insurance business, or any financial business conducted solely with persons not resident in Belize exclusively in a currency or currencies other than the Belize dollar under an enactment authorising the carrying on of such business; “financial entity” means any entity that carries on a business that includes the provisions of any financial service, including without limitation, any service comprised in banking business, the business of international banking, the business of a financial institution and the business of a credit union and includes the holding company of any such financial entity; “financial group” means a related group, the members of which are incorporated in Belize and are limited in their activities to– (a) (b) (c) international banking; (d) 19 (e) trading in securities; and such other necessary services to support the activities of the members of the related group, as approved by the Central Bank and includes a financial holding company; “financial holding company” means a holding body corporate of a local licensee; “financial institution” means a company which carries on or used to carry on all or any aspects of financial business; “foreign bank” means a bank incorporated outside Belize and refers to the branch or branches in Belize through which such bank carries on its banking business in Belize; “foreign financial institution” means a financial institution which is incorporated outside Belize and refers to the branch or branches in Belize through which such financial institution carries on its financial business in Belize; “foreign international bank” means a foreign bank holding a valid license under the International Banking Act to carry on an international banking business from within Belize and refers to the branch or branches in Belize through which such foreign bank carries on its international banking business; CAP. 267. “foreign licensee” means a foreign bank licensee and a foreign financial institution licensee; “former licensee” means a company which was a former licensed institution whether under this Act or any other Act repealed by this Act; “Government” means the Government of Belize; “Governor” means the Governor of the Central Bank of Belize; 20 “holding body corporate” means a body corporate that owns or controls any other body corporate; “holding company” means a company that owns more than fifty percent of the voting shares in another company, and/ or controls directly or indirectly that other company’s board of directors; “independent director” has the meaning assigned to that expression under section 45(8)(c) (Audit Committee); “large exposure” means the total of all loans, advances and extensions of credit granted by a licensee that is a bank to a person or to a borrower group that exceeds twenty-five percent of the fully paid up capital and reserves in the case of a local bank, or of the assigned capital and reserves in the case of a “licensed bank” means a company licensed or required to be licensed as a bank under this Act; “licence” means a licence granted under this Act, and “licensed” shall be construed accordingly; “licensee” means a company licensed or required to be licensed as a bank or financial institution under this Act; “loans, advances and extensions of credit” shall include all loans, advances, overdrafts, debt securities, holdings of papers and all direct and indirect obligations of the borrower as well as off-balance sheet commitments, including but not limited to acceptances and guarantees on behalf of the borrower, underwriting facilities, endorsements, placements, documentary credits issued, performance bonds and other contingent liabilities on behalf of such person or any other facility or instrument that the Central Bank may specify in writing; 21 “local bank” means a bank that is incorporated in Belize under the Companies Act that is licensed under this Act to conduct, in or from Belize, a banking business; CAP. 250. “local company” means a body corporate incorporated in Belize under the Companies Act, or the International Business Companies Act; CAP. 250. CAP. 270. “local financial institution” means a local company that is licensed under this Act to conduct a financial business in and from Belize; “local international bank” means a local company holding a valid license granted under the International Banking Act to carry on international banking business from within Belize; CAP. 267. “local licensee” means a local bank and a local financial “managing director” means the managing director or president of a body corporate or other entity, or a person holding an equivalent position; “Minister” means the Minister for the time being responsible for banks and banking who has been assigned such responsibility under section 41 of the Belize Constitution; CAP. 4. “officer” means– (a) in relation to a company or unincorporated body, a chief operating officer, chief executive officer, president, vice-president, corporate secretary, treasurer, chief financial officer, chief accountant, chief chief investment officer, chief compliance officer or chief risk officer and any other individual designated as an officer by its articles of 22 incorporation or continuance, by-laws or other constituent document, or resolution of the directors or members; (b) any other individual, who performs functions for the company or other unincorporated body similar to those performed by a person referred to in paragraph (a), whether or not the individual is formally designated as an officer, and includes a principal officer; “ownership interests” means the units of value, however designated, into which an unincorporated body is divided; “person” means an individual, body corporate, entity or a personal representative; “prescribed” means prescribed by any written law; “prescribed liabilities” means such liabilities as may, by notice, from time to time be specified by the Central Bank; “principal officer” means a person who, either alone or jointly with one or more persons, is responsible under the immediate authority of the board of directors of an institution for the conduct of the business of that institution, whether or not the individual is formally designated as a principal officer; “prudential criteria” are criteria and standards established under this Act for the purpose of setting outside limits and constraints on licensees for the protection of depositors and potential depositors and for ensuring the safety and soundness of the financial system; “related group” means23 (a) two or more bodies corporate that are controlled by the same person; (b) the direct and indirect subsidiaries of the bodies corporate referred to in paragraph (a); and (c) the controlling person referred to in paragraph (a); “shell bank” means a bank that– (a) is incorporated and licensed in a country in which it has no physical presence involving meaningful decision-making and management; and (b) is not an affiliate of a corporate body that– (i) has a physical presence in a country that involves meaningful decision- making and management; (ii) is authorised to carry on banking business in that country; and (iii) is subject to effective consolidated supervision in relation to its banking which extends to its affiliates; “significant influence” means— (a) the power to participate in the financial and operating policy decisions of an entity; or 24 (b) where an investor holds more than twenty per cent of the voting power of an entity, it shall be presumed unless the contrary is shown that there is significant influence; “spouse” means in relation to an individual person, a wife, husband, or other individual with whom the first-named natural person is engaged in an ongoing conjugal relationship, whether common-law union as defined by section 148(D) of the Supreme Court of Judicature Act, or not and whether or not the two persons are living together; “subsidiary” means a company in which fifty percent or more of its shares are held directly or indirectly by another company, or whose board of directors is controlled directly or indirectly by another company; “tangible asset” means real property or personal property, such as buildings, furniture, equipment and machinery; “trust business” means the acceptance of funds in the capacity of trustee, guardian, administrator, executor or similar fiduciary capacity; “trust corporation” means a body corporate which offers services to the public as a professional trustee engaged in the management or administration of financial or other trust assets but does not include a body corporate which acts as a nominee trustee where the custodianship or management of the trust assets is delegated to another person; “ultimate beneficial owner” means an individual that ultimately derives the benefits of ownership or control of a person; “unsecured loans, advances and extensions of credit” means loans, advances and extensions of credit made without tangible security or realizable collateral, or in respect of any loans, 25 advances and extensions of credit made with tangible security or realizable collateral, any part thereof which exceeds the fair or market value, as determined in a manner acceptable to the Central Bank, of the assets comprising the security given. (2) Grammatical variations of any expression defined in sub-section (1) shall be construed accordingly. (3) For purposes of this Act, a person shall be deemed to accept deposits if he advertises or solicits such deposits from any person, irrespective of any terms or conditions under which such deposits are solicited or received and whether or not certificates or other instruments are issued in respect of such (4) With respect to any bank or financial institution to which the Companies Act or any other law then being in force relating thereto may apply, in the case of any conflict or inconsistency between this Act on the one hand or such other Act or law on the other hand, the provisions of this Act shall supersede and take precedence over such other Act or law, unless expressly provided to the contrary in this Act or such other Act or law by language to that effect and not merely by implication. CAP. 250.