Title: International Trust Entities

Summary: Providing for a moratorium for a specified timeframe on enforcement by the Office of Financial Regulation of certain licensure requirements for certain organizations and entities providing services to international trust companies; providing conditions to apply the moratorium to specified persons of the organization or entity; requiring the office to issue a notice of denial if it determines that an organization or entity is not a party to the moratorium, etc.

Full Text:
An act relating to international trust entities; amending s. 663.01, F.S.; defining the term  international trust entity ; creating s. 663.041, F.S.; providing for a moratorium for a specified timeframe on enforcement by the Office of Financial Regulation of certain licensure requirements for certain organizations and entities providing services to international trust companies; providing conditions to apply the moratorium to specified persons of the organization or entity; providing for construction; specifying requirements for a letter to the office to request qualification as a party to the moratorium; requiring the office to confirm specified findings when processing a request; specifying circumstances for establishing adequate supervision; providing procedures and timeframes for the office s processing of requests and the office s requests for additional information; providing timeframes for the office to confirm with the organization or entity whether it has been confirmed as a party to the moratorium; requiring the office to issue a notice of denial if it determines that an organization or entity is not a party to the moratorium; providing that a denied organization or entity may request a certain hearing to contest the denial; providing for construction if certain timeframes are not met; authorizing the office to conduct an onsite visitation of an organization or entity for a specified purpose until a specified time; requiring the office to issue an immediate final order disqualifying an organization or entity if it finds that such organization or entity made a material false statement in its request; providing for construction; providing for future repeal; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Present subsections (10) and (11) of section 663.01, Florida Statutes, are renumbered as subsections (11) and (12), respectively, and a new subsection (10) is added to that section, to read: 663.01 Definitions. As used in this part, the term: (10)   International trust entity  means an international trust company, an international business, an international business organization, or an affiliated or subsidiary entit ythat is licensed, chartered, or similarly permitted to conduct trust business in a foreign country or countries under the laws of which it is organized and supervised. Section 2. Section 663.041, Florida Statutes, is created to read: 663.041  Moratorium on the office s enforcement of licensing requirements for an i nternational trust entity or related entities.  (1)   Until June 30, 2017, the office shall delay the enforcement of the requirement under s. 663.04(4) relating to licensure of an organization or entity in this state providing services to an i nternational trust entity that engages in the acti vities described in s. 663.0625. This delay applies to any person who manages or controls or is employed by such organization or entity that:(a) Has been organized to conduct business in this state before October 1, 2013; (b) Has not been fined or sanctioned as a result of any complaint to the office or to any other state or federal regulatory agency; (c) Has not been convicted of a felony or ordered to pay a fine or penalty in any proceeding initiated by any federal, state, foreign, or local law enforcement agency or international agency within the years before the effective date of this section;(d) Has not had any of its directors, executive officers, principal shareholders, managers, or employees arrested for, charged with, convicted of, or ple a dguilty or nolo contendere to, regardless of adjudication, any offense that is punishable by imprisonment for year or more, or to any offense that involves money laundering, currency transaction reporting, tax evasion, facilitating or furthering terrorism, fraud, or that is otherwise related to the operation of a financial institution, within the years before the effective date of this section;(e) Does not provide services for any international trust entity that is in bankruptcy, conservatorship, receivership, liquidation, or a similar status under the laws of any country; (f) Does not provide banking services or promote or sell investments or accept custody of assets; (g) Does not act as a fiduciary, which includes, but is not limited to, accepting the fiduciary appointment, executing the fiduciary documents that create the fiduciary relationship, or making discretionary decisions regarding the investment or distribution of fiduciary accounts; and (h) Conducts those activities permissible for an international trust company representative office as described in s. 663.0625. (2) This moratorium does not prevent the office from otherwise enforcing the financial institutions codes. (3)  An organization or entity that requests to qualify for this moratorium shall notify the office in writing by letter on official letterhead via United States Postal Service or commercial mail delivery service by July 1, 2016, and shall provide the following: (a)  Written proof that it has been organized to do business in this state before October 1, 2013; (b)  The name or names under which it conducts business in this state; (c)  The address es of its locations from which it conducts business; (d)  A detailed list and description of the activities being conducted at the locations from which it conducts business. The detailed description must include the types of consumer sthat utilize those activities and a nexplanation of how those activities serve the business purpose of an i nternational trust entity. (e) As to each i nternational trust entity the organization or entity provides services for in this state, the following:1. The name of the i nternational trust entity;2.  A list of the current officers and directors of the international trust entity; 3. The country or countries where the i nternational trust entity is organized; 4. T he supe rvisory or regulatory authority, or equivalent or other similarly sanctioned body, organization, governmental entity,or recognized authority that has licensing, chartering, oversight,or similar responsibilities over the i nternational trust entity; 5.  Proof that the i nternational trust entity has been authorized by a charter, license, or similar authorization by operation of law in its home country jurisdiction to engage in trust business; 6.  Proof that the i nternational trust entity lawfully exists and is in good standing under the laws of the jurisdiction where it is chartered, licensed, organized,or lawfully existing. The organization or entity shall submit a certificate of good standing or equivalent document issued by the supervisory or regulatory authority, or equivalent or other similarly sanctioned body, organization, governmental entity,or recognized authority that has similar responsibilities, of the country where the i nternational trust entity is licensed, chartered, or has similar authorization by operation of law and is duly organized and lawfully exist s; 7.  A statement that the i nternational trust entity is not in bankruptcy, conservatorship, receivership, liquidation, or in a similar status under the laws of any country; and. P roof that the i nternational trust entity is not operating under the direct control of the government, regulatory, or supervisory authority of the jurisdiction of its incorporation, through government intervention or any other extraordinary actions,and confirmation that it has not been in such a status or under such control at any time within the years before the date of notification to the office. (f) A declaration under penalty of perjury signed by an executive officer or managing member of the organization or entity, declaring that the information provided to the office is true and correct to the best of his or her knowledge. ( 4)  In processing the request to qualify for the moratorium, the office shall confirm the following: (a) That the i nternational trust entity is adequately supervised by the appropriate regulatory authority, or equivalent or other similarly sanctioned body, organization, governmental entity,or recognized authority that has similar responsibilities in the foreign country where it is organized, chartered,or licensed, or has similar auth orization by operation of law; and (b) That the jurisdiction of the i nternational trust entity or its offices, subsidiaries, or any affiliates that are directly involved in or facilitate the financial services function s, banking,or fiduciary activities of the i nternational trust entity, is not listed on the Financial Action Task Force Public Statement or on its list of jurisdictions with deficiencies in a nti-money laundering or counter terrorism. ( )   For purposes of establishing adequate supervision under paragraph (4)(a): (a)  An i nternational trust entity with foreign establishments is considered adequately supervised if it is subject to consolidated supervision. As used in this paragraph,  c onsolidated supervision   means supervision that enables the appropriate regulatory authority, or equivalent or other similarly sanctioned body, organization, governmental entity,or recognized authority that has similar responsibilities of the home country (home country supervisor) to evaluate: 1.  The safety and soundness of the i nternational trust entity s operations located within the home country supervisor s primary jurisdiction; and 2.  The safety and soundness of the operations performed by the i nternational trust entity s offices, subsidiaries, or any affiliates that are directly involved in or facilitate the financial services function s, banking,or fiduciary activities of the i nternational trust entity, wherever located. ( b)  An i nternational trust entity with no foreign establishments is considered adequately supervised if the home country supervisor can evaluate the safety and soundness of the i nternational trust entity s operations through its offices or subsidiaries located in the home country. For purposes of this paragraph, the home country supervisor is deemed to be able to evaluate the safety and soundness of the i nternational trust entity if the home country supervisor has the authority to collect and maintain information on the following regulatory components: 1.  The technical competence and administrative ability of the management of the i nternational trust entity; 2.   The adequacy of the operational, accounting,and internal control systems of the i nternational trust entity, particularly the i nternational trust entity s ability to monitor and supervise the activities of its offices or subsidiaries wherever located; 3.  The adequacy of asset management and asset administration policies and procedures; 4.  The capital adequacy of the i nternational trust entity, its offices or subsidiaries as specified by any capital adequacy guidelines in the home country; 5.   The earnings of the i nternational trust entity; and 6.  The external and internal auditors  reports as well as any management comment letters or any documented corrective action by management. ( c)  As used in paragraphs (4)(a), (5)(a), and (5)(b), adequate supervision does not require supervision of companies that control the international trust entity or supervision of companies under common control with the i nternational trust entity but that are not in the i nternational trust entity s chain of control. However, in cases where a holding company is the only controlling element in a trust business group, holding company supervision by a home country supervisor shall be required when it is needed to ensure consolidated supervision of all trust business entities in the group. ( d) If a holding company is not supervised, adequate supervision is deemed to exist if the home country supervisor regulates transactions between the i nternational trust entity and controlling persons or entities under common control. ( e)  An international trust entity and its offices or subsid iaries is deemed to be adequately supervised if it is subject to comprehensive supervision. For purposes of this paragraph, comprehensive supervision:1. Means supervision that ensures that the supervisory processes and procedures are designed to inform the hom ecountry supervisor about the international trust entity s financial conditio n, including capital position; a sset management and asset administration; internal controls and audit; compliance with exi sting laws and regulations; and capability of management. 2. D oes not require the home country supervisor to conduct on site examinations of the i nternational trust entity or its offices or subsidiaries. However, at a minimum, it requires that the home country supervisor: a. Is able to determine that the i nternational trust entity and its offices a nd subsidiaries have adequate procedures for monitoring and controlling its domestic and foreign operations; b. Is authorized to obtain information, by examin ation, audits or by other means, on the domestic and foreign operations of the i nternational trust entity, includi ng its offices and subsidiaries, and the authority to demand financial reports which permit analysis of the consolidated condition of the i nternational trust entity; c. Is able to obtain information on the dealings and relationships between the international trust entity and its offices and subsidiaries,wherever located; and d.  Is authorized by the home country s laws to ensure the safety and soundness of the i nternational trust entity and its offices and subsidiaries. 3. I ncludes the ability and willingness of the home country supervisor to provide the office early notice of any weaknesses being experienced by the i nternational trust entities, including its offices or subsidiaries wherever located. 4. I ncludes the ability of the home country supervisor to provide the office assurance of cooperation by both the i nternational trust entity a nd the home country supervisor. (6)  The office shall process requests made for inclusion under the moratorium as follows: (a) Upon receipt of any request, the office shall review the information contained therein, and request any additional information to complete the request to qualify for the moratorium within days after receipt. The organization or entity shall provide the requested additional information within days after the receipt of the notice from the office. If the office does not make such request within days after receipt, the request to qualify for the moratorium is deemed complete as of the date it was received. (b) Within days after receipt of any additional information requested, the office shall deem the request to qualify for the moratorium complete or provide notification to the organization or entity that the information provided does not satisfy the office s request or requests. (c) Within days after receipt of a completed request to qualify for the moratorium,the office shall confirm with the organization or entity that they are or are not a party to the moratorium. 1.  If the office determines that an organization or entity is not a party to the moratorium, the office shall issue a notice of denial informing the organization or entity of its determination. An organization or entity receiving a notice of denial may request a hearing under chapter to contest the denial.2.  If the office fails to notify the organization or entity within such time whether or not the organization or entity is a party to the moratorium, then the organization or entity is considered a party to the moratorium by operation of law. ( d) During the period of the moratorium, the office may conduct an onsite visitation of an organization or entity to confirm information provided to the office in deeming the organization or entity qualified for the moratorium. I fthe office finds that the organization or entity made a material false statement in its request to qualify for th emoratorium,the office shall issue an immediate final order suspending the organization s or entity s qualification and disqualifying the organization or entity from participat ing in the moratorium. A material false statement made in the request to qualify for th emoratorium constitutes an immediate and serious danger to the public healt h, safety, and welfare.Section 3.  Section 663.041, Florida Statutes, and the amendments to section 663.01, Florida Statutes, made by this act, are repealed on July 1, 2017. Section 4. This act shall take effect upon becoming a law.