p6 Double Tax Deal? p21 Telecommunications Winter 2008/9 INTERNATIONAL FINANCE AND BUSINESS Moves to keep bunkering afloat

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WINTER 2008/9 GIBRALTAR INTERNATIONAL 3 Winter 2008/9 EDITORIAL COMMENT Volume 15 / Number 1 What’s in a name? Contents ibraltar variously has been described as a NEWS ‘tax haven’ and, more damaging, as an Double tax deal prospect ‘offshore tax haven’; Wooing Ga place perhaps where tax that would properly be due in one share sale? country is evaded in another. New casino opens 6-8 Several countries, Spain historically, but reinforced more recently by and INSURANCE , consider Gibraltar to be a tax haven. Passporting on-line policies 10 True a zero tax rate for some companies, when other - sometimes competing - companies pay tax, has not helped FUNDS Gibraltar’s situation. But this act of ‘material selectivity’ ends next year. Trend followers see growth 12 The OECD campaign against “harmful” tax practices, PROPERTY principally tax havens, arouses mixed reaction; some claim tax policy is a sovereign entitlement. Prompted by 17 2009 revival forecast 14 countries, the OECD is now preparing a new blacklist of BUNKERING tax havens for summer. In its drive for tax transparency and effective information exchange, it already has a Keeping refuelling afloat blacklist of ‘uncooperative’ countries, but not Gibraltar. Growing Straits competition In truth, it has not been possible to hide behind The Rock’s lack of any double taxation or information 16 exchange agreements, because of its anti- money TELECOMMUNICATIONS laundering laws, firm regulatory system, EU taxation of savings directive and the Schengen Convention. Competition hots up! 21 The European Court of Justice’s welcome decision PROFILE against the EU and in favour of Gibraltar - agreeing it can legitimately set corporation tax levels independent of Perez balancing risk & reward 26 Britain -has helped raise The Rock’s standing and LAST WORD reputation. It reinforces firmly the fact that Gibraltar is part of the EU, able to passport financial services ‘Credit crunch’, words of the year 31 throughout all 27 member countries. It has also meant a new 10 per cent tax rate can be introduced with confidence from July 2010, previously zero-rated companies contributing for the first time. Effectively, that removes the ammunition for Gibraltar to be described as a tax haven. But what about Gibraltar being ‘offshore’? GIBRALTAR INTERNATIONAL MAGAZINE The IMF at its simplest describes ‘offshore’ jurisdictions as having relatively large numbers of financial Published by Gibraltar No part of this publication institutions engaged primarily in business with non- International Publications Ltd . may be reproduced without residents. It lists Jersey and Guernsey as offshore finance 1/5 Irish Town, Icom House, the written permission of the Suite 6/PMB 104 publishers. The publishers centres for example, and less obvious and PO Box 561, Gibraltar have tried to ensure that all Luxembourg but, most surprisingly, the City of London information is accurate, but too! Editor emphasise that they cannot Off-shore it is then; particularly when the IMF Ray Spencer accept responsibility for any definition adds “jurisdictions that have low or zero rate [email protected] errors or omissions. The taxation”! publishers accept no Spain cannot argue that Gibraltar is a finance centre Sales responsibility for statements C.A. Tanner made by contributors or for that wants to earn a living by providing a location on [email protected] any claim made in an Spain’s doorstep in which its residents can simply conceal advertisement. their wealth. A double taxation agreement and exchange Design of information agreement at the Tripartite talks this Bil Brooks Gibraltar International summer will be positive for all concerned. [email protected] Magazine is available on Now Gibraltar is presenting itself as an ‘on-shore, subscription, 4 issues posted UK Agent: to: UK £24 - EU £32 - main-stream, international financial centre’. A bit of a Tel: 0044 (0) 1993 703560 Rest of World £44. mouthful – but at least accurate. Fax: 0044 (0) 1628 630316 © 2009 Gibraltar International Publications Ltd.

4 GIBRALTAR INTERNATIONAL WINTER 2008/9 NEWS NEWS First double tax deal in sight as Gibraltar prepares to shed ‘tax haven’ tag and kills off its Zero rate tax status

Gibraltar expects to have full on Spain’s doorstep”, is beginning to put its mind agreement. Ministerial talks. which has Gibraltar on its details of its new 10 per cent declared Chief Minister Peter to”. He assured: “The Last July, the official “We have made a lot of ‘black ‘list’ of tax havens that corporate tax rate passed into Caruana in a wide-ranging Government has no policy dif- Communiqué of theprogress, but are not yet work- also includes other EU coun- law by July removing any exclusive interview with ficulty with such agreements if Ministerial Meeting of theing on texts of agreements and tries such as Malta and obstacles to a full exchange of Gibraltar International on the Finance Centre Council Forum of Dialogue onare almost at the end of that Cyprus. information agreement with what he described as “the advises that they are in the Gibraltar – the Tripartiteprocess”, Caruana said. They Under Spanish law there Spain later that month. huge opportunities” available best interests of Gibraltar.” Agreement – involving thehad been ruminating over was automatic delisting when The agreement would for the finance centre. Gibraltar’s status as a UK, Spain’s foreign affairssome issues and there was not exchange of information cover tax, supervisory and Areas that would benefit main-stream EU on-shore minister, Miguel Angelyet complete accord about the agreements are in place, regulatory matters and from a Spanish double taxa- finance centre brought many Moratinos and Caruana, saidextent of any agreement. explained Caruana. potentially include a double tion agreement include collec- advantages that were being there was agreement to work As a result of a personal A lot of rubbish is pub- taxation agreement - a first tive investment schemes, exploited, but there were also towards co-operation oninvitation from the Chief lished in the less well-informed for Gibraltar with any Experienced Investor Funds, a number of obligations. financial services and taxationMinister, the Tripartite Spanish press, said Caruana as country. bank lenders – a range of This is why offers were (amongst other things). Ministerial talks are expected he emphasised that “the It follows a land-mark rul- passported cross-border being made “to match the Since then officials from allto be held in Gibraltar and Sn Spanish Government at the ing by the European Court of financial services. benefits we get from member- three countries have met toMoratinos had indicated highest levels had no doubt Justice in December that con- And he revealed to Editor ship with a willingness to for- prepare the basis of agree-informally “that there should about what is on offer to them firmed Gibraltar’s ability to Ray Spencer, that in advance malise co-operation arrange- ments – negotiating briefs thatbe no problem”. from Gibraltar and our will- set its own tax rates inde- of the new low tax rate for all ments and exchange of infor- set out detailed objectives and If that happens, it will be ingness has been declared both pendent of Britain, despite businesses, he would make a mation agreements”, which how they can be achieved -the first visit to The Rock by a publicly and privately. opposition from the EU. further substantial, “mean- may include a double taxation ready for the next round ofsenior Minister from Spain, The existence of a Zero ingful cut” this summer in Continued on P10 Rate tax, which must be the present 27 per cent phased out under EU material Corporation tax rate. selectivity rules by the end of In the space of two years, next year, is seen as a major the tax on business profits the University of Algeceras, factor that allows a large will have fallen then by nearly Moves to woo Spanish the Law Faculty of Seville body of opinion in Spain to half with the further reduc- University and in January to resist acceptance of Gibraltar tion to 10 per cent from 01 public opinion Cordaba University. as a main stream finance July 2010. This initiative he regards centre. investments and Experienced “wary of double tax agree- “Gibraltar is not a finance their global organisational Gibraltar”, he said. as “very important” and the Some 7,000 Gibraltar busi- Investor schemes, bank ments, because they came centre that wants to earn a structures and have nothing “The first reaction of aim now was for people to nesses, including on-line gam- investments and loans and with an exchange of informa- living by providing a location to gain from using Gibraltar younger people is an unwill- put aside whether they con- ing companies, some private Spanish tax prize insurance for people living in tion clause, but this has come on Spain’s doorstep in which simply to conceal wealth ingness or reluctance to sider they have claims on banks and insurers, benefit But it is the prize of gaining a Spain. about anyway by another Spanish residents can simply from the Spanish authorities, believe, because it disarms; Gibraltar, and instead look at from a historic nil rate tax double tax agreement with “Banks, insurance and, route – the OECD, the conceal their wealth from because of the tax savings it’s not what they have been what can be achieved for the band. Spain that would have the more recently, investment EU taxation of savings Spain,” Peter Caruana, directives and the obligation taught to believe. Because it is better of all parties con- “Gibraltar is not, and does greatest impact on the services businesses are keen directive and the Schengen Gibraltar’s Chief Minister, to disclose anyway”. politically expedient – almost cerned. not aspire to be, a tax haven Finance Centre. It would on this agenda”, Caruana Convention”. declared. In the meantime, Gibraltar like stripping someone’s Gibraltar was well then be unnecessary to deduct maintained. Many within the Having already been “We have no way of is in the midst of a ‘win clothes away, their first reac- advanced in repositioning the withholding tax on collective finance centre had been “exposed to many of the knowing if that happens”, he hearts-and-minds campaign’ tion is to cover up. finance centre as “a stable, historically perceived disad- admitted, “but the finance in Spain, accepting any “That can be overcome in sustainable and main stream vantages of double taxation centre has moved in great opportunity to speak on tele- time, because the reality is financial service centre offer- agreements, I don’t think leaps and bounds away from vision, conferences and meet- that the young, educated, ing quality and value added they are seen as a sort of the classical tax haven ings about its modern more European and open- business away from brass threat very much anymore, so arrangement into a much Finance Centre. minded people - even if they plate tax haven”. we now may as well get the more main stream finance “We have to overcome think Gibraltar should be The extent to which matching“ benefits of EU membership with benefit,” he declared. centre. deep-rooted, intense, concen- Spanish - are much less vitri- Gibraltar as a whole depend- There were growing views “Everywhere there will be trate, long-running layers of olic and less hung-up about ed on Zero tax and brass willingness to formalise co-operation that such agreements are “a good thing, although the clients who are present for brain-washing propaganda to the issue”, he went on. plate tax haven company arrangements debate within the Finance different reasons. I’m told by which Spanish public opinion In December, the Minister work “is very, very small - Centre is quite young; it’s banks and others that people has been subjected over many laid out Gibraltar’s case to maybe there is the odd opera- something the finance centre who are resident in Spain use years and this is not easy to Madrid’s Nueva Economia tor out there, but there are ” Gibraltar legitimately for dispel on the reality of Forum and recently spoke at casualties in all reforms!” 6 GIBRALTAR INTERNATIONAL WINTER 2008/9 WINTER 2008/9 GIBRALTAR INTERNATIONAL 7 NEWS Gibtelecom sale in prospect, but experience does not bode well You don’t have The Gibraltar Government is trying this year to sell off - or at least to speak Danish … reduce - its 50 per cent stake in Gibtelecom, the former wholly State- owned telecommunications business.

But experience shows it may not Gibtelecom call centre staff answer be as easy as advocates of the as such, also has owned half of customer quieries 24 hours each day Government’s exit from con- Gibtelecom since June 2007. flicting roles of telecoms opera- Gibtelecom’s pre-tax profitholding then was just over 14 tor and telecoms Regulator for the year 2007 (revealed lastper cent. might have expected! November) rose by more than a High demand for those commission in charge of con- quarter to reach £8.7m onshares was encouraged by the ducting and monitoring the sale Peter Caruana, Gibraltar’s turnover of £30.4m, up 6 perGovernment’s announcement of the State holding in Telekom chief minister, told Gibraltar cent. The total dividend was 9that it would sell its interest in Slovenije “recommended that International that some inter- per cent higher at £6.3m. Telekom Slovenije to the best the Slovenian Government not est had already resulted from Telekom Slovenije sharebidder in an international accept any of the bids”. market soundings. A decision of 2007 dividends wasoff-loading process. None of the candidates had on the Government’s stake in d2,820,000, the Slovenian opera- Experts assessed the value of met the requirements, reported Gibtelecom was likely to be tor’s annual report reveals, hav-assets for the purpose of the bid- Bojan Dremelj, President of the made this year, Caruana indicat- ing paid previous owner Verizonding, while seven candidates Telekom Slovenije Management d ed, “to remove uncertainty on Communications 36.7m for itsinterested in purchasing the Board. this issue”. 50 per cent stake in GibtelecomRepublic’s shares conducted due Given the current world- Any sale had to be “at the in April 2007. diligence reviews of the wide economic downturn, right price” by an organisation company. finding a suitable bidder in 2009 At about that time, the that would “ensure that invest- In the end, a total of at the right price may prove telephony company’s share was ment continues to be made in 12 organisations submitted difficult for the Gibraltar included in the Ljubljana Stock technology to ensure a good bids, and talks subsequently Government too! Exchange prime market listing service for business and proceeded with two. See also Competition having being quoted there for residents of Gibraltar”, he said. But in March last year, the hots up page 21. over 18 months. However, it’s an approach At the end of 2007, the already tried without success by Gibraltar Phone Facts Republic of Slovenia had the Slovakian Government, ● 23,000 fixed telephone lines reduced its ownership of ● which now owns around 49 per 98m minutes of calls originated in Gibraltar, nearly Telekom Slovenije to 52.53 per cent of Telekom Slovenije, and, two thirds from fixed landlines cent; the next nearest single ● 25m local calls and 5.2m international calls were made in 2007 from landlines, down from the 38m … to get personal investment advice and 7m in the peak 2004 year. ● 3 VoIP providers - Gibtelecom, Easycall and CTS - accounted for 6.8m outgoing international calls, We offer you personal and individual invest- languages – in a truly international environ- Island captive’s choice 27% of the total in 2007. ● half of VoIP international calls were to the UK; ment advice. ment. Guernsey’s largest independ- insurance management, just over a quarter were to Spain. So do a lot of other banks. But we insist on Get an idea of what we can offer you in the ent captive manager, Heritage broking, aviation underwrit- making a difference. We have Danish roots. way of personal investment advice on your Group launched Heritage ing, company secretarial, fund Insurance Management administration and wealth Still we offer international advice with a local terms. as being chief executive (Gibraltar) in January as “a management services in Dinner date TOUCH™ALWAYSMATCHINGYOURSPECI€CREQUIRE- of Caledonian Insurance natural extension of the juris- Guernsey and has insurance Vice president of the Chartered Management Services. ments. Contact me today: dictional choice that our management offices in Malta Insurance Institute in London, The GII was formed in We have clients all over the world and Tessie clients expect”, says Tracey and Bermuda, with affiliates Branko Bjelobaba, is to be the September and its President is speak to people of different nationalities every tel. +350 200 59222 Jones, who has been appoint- in London, Jersey and guest speaker at the first annu- Andy Baker, chief executive of day. Therefore, we speak many languages, [email protected] ed head of operations locally. Bahrain. al dinner of the Gibraltar Argus Insurance Company Formerly a self-employed “We feel that Gibraltar Insurance Institute on 26 (). such as English, German and the Scandinavian consultant to private banks offers an exciting, well regu- February at . His 2009 programme and having trained with Price lated market with a lot of The event is expected to be includes a breakfast visit to the Waterhouse Cooper as a char- growth potential”, enthuses attended by 150 people, includ- FSC on 04 March to hear of tered accountant, 34-years Jones, whose local managing ing Gibraltar Financial Service pointers and lessons learned for old Miss Jones has worked in director Kevin Rye, and Commissioner, Marcus Killick the industry and a one-day Gibraltar for four years. Group chief executive, and Penny Hudson, who is Risk Regulation & Capital JYSKE BANK (GIBRALTAR) LIMITED · Private Banking · 76, Main Street · P.O. Box 143 · Gibraltar The independent Richard Tee, hosted a January President of the Gibraltar Adequacy training workshop Tel.: +350 200 72782 · Fax: +350 200 76782 · e-mail: [email protected] · www.jyskebank.gi Heritage Group provides launch event. Insurance Association as well on 26 March.

Jyske Bank (Gibraltar) Limited is licensed by the Financial Services Commission, Licence No. FSC 001 00B. 8 GIBRALTAR INTERNATIONAL WINTER 2008/9 Services and products are not available to everybody, for instance not to residents of the US. INSURANCE Link to passport direct on-line car insurance to UK A new direct private motor insurer for the UK market has gocompare.com and money- deal they were prevented fromadministration at offices in been launched combining supermarket.com. working in the market for aHaywards Heath, West Sussex. for the first time separate Cover is provided by both period, but now have been Already employing 60 Gibraltar-based insurance and firms because aspects are pro- joined as First Central jointstaff, First Central anticipates broking companies that are vided through the broker with founders by three others that- this will grow to over 100 passporting their services with those insurance risks laid-off Mike Leonard, Peter Creedin 2009. the target of writing £70m of elsewhere. and Anne Cowland - all of Group chief executive, business in the first year’s First Central has become whom previously worked inLeonard said: “The aggregator operation. the first insurer to market its the Zenith Group. distribution model will fully policies solely through com- meet our business needs as our parison web-sites, known asMotorcyles & vans research identified that more Leading the way aggregators. The plan is to launch policies and more people in the UK are Already providing “tens of Both firms are members ofto cover motorcycle and van using comparison sites to thousands of quotes” and hav- the First Central Group, basedinsurance later this year. source their personal lines ing issued 2,000 policies in the in Guernsey, and founded by a The new businesses are insurance requirements.” first few weeks, First Central core team of Ken Acott andbeing managed from Gibraltar Insurance Company Ltd and Patrick Tilley, previously jointby the fast growing Quest Further information broker First Central Insurance majority owners of ZenithGroup, under chairman Steve contact: Tom Acott Quinn, and UK administrator, Services Ltd, are together Insurance PLC, which was ([email protected]) working exclusively through sold to Guardian HoldingsFirst Central Insurance or Steve Quinn specialist insurance compari- Limited in early 2005. Management Limited, is ([email protected]). son sites such as confused.com, Under the terms of thefulfilling policy and claims

Deal in sight continued from P7 “If this doesn’t happen, it to find alternative countries which “specialist taxation will not through a lack of will- legislation. with still lower, or no tax. techniques” needed to be There was now some feeling ingness on Gibraltar’s part”, Had Gibraltar lost the ECJ worked out covering the insur- he declared. for how much extra the insur- case, Gibraltar would have ance and on-line gaming sec-ance industry, tax-exempt had to adopt the UK’s compa- tors that would be defensible –banking businesses and on-line Low tax not bad ny tax system and company “staying the right side of EUgaming companies might con- “Low tax is good, not bad” tax rates and “that would State Aid rules and not beingtribute in tax Caruana declared, pointing result in the bulk, if not all, of materially selective”. A separate group of out that Gibraltar was like the the finance centre and gam- external tax advisers, along Republic of Ireland, Cyprus bling companies leavingPanel to advise with the Inland Revenue and and most of Eastern Europe Gibraltar”. In the UK, for example, there the government, are consider- where there were lower rates Those new tax contributorswere legitimate differences in ing the implications of either of tax. were not in Gibraltar only forthe way profit is calculated in asking the exempt companies “All countries should strive the tax advantage, which stilldifferent industries. “We are to forfeit the final six months to have the lowest possible rate would be good, but for a vari-not talking about re-inventing of tax free existence – from of taxation. The difference ety of other reasons. “A poli-the wheel - we not trying to be July to December 2010 – or between good and bad cannot cy of zero tax is simply just notclever here – it’s a question of whether the shortfall in that be the distinction between high going to be sustainable withlooking at other systems of tax period can be made up by util- and low tax. There is no virtue world opinion,” he felt. that are valid and learning so ising Government reserves in high tax and there is no sin Nevertheless, Caruana hasthat we can properly tax a sec- arising from past surpluses, or in low tax”, he emphasised. said publicly that the zero-tor that has not being paying from finding the money else- The new low 10 per cent rated on-line gaming compa-before”, said Caruana. where. rate will mean less income, off- nies and insurers effectively The Government has The current year is likely to set to some extent by the tax will pay less than 10 per cent.employed a panel of eight tax end up with another budget that will be paid for the first Taxation computation rulesexperts locally – lawyers and surplus of £12-15m, Caruana time by exempt companies, would result in the effectiveaccountants – to help with the forecasts, if oil prices remain which the Government rate being less and separatedetails of the 10 per cent around US$50 a barrel or less believes will not be encouraged meetings were taking place atscheme and drafting of until March.

10 GIBRALTAR INTERNATIONAL WINTER 2008/9 FUNDS Systematic trend followers have simple beliefs for future growth Despite a general loss of trust in the veracity and expertise of those managing alternative investments, some Hedge Funds still offer a “safe and profitable” home, argues Chris Clarke – probably!

2008 will go down in history as one of the worst periods for the global invest- decline of equity and property values. instruments with little of no liquidity. ment industry. In early 2007, the hedge fund Certainly the way forward for the The value of global equities declined industry had assets under management alternative investment industry lies in by over 30 per cent, commodity indexes estimated at US$ 2.5 - 3 trillion. Since greater transparency and accountability. made multi-year lows and property val- then, there has seen an investor exodus But the general lack of trust in the ues collapsed, following the sub-prime with total assets now estimated at industry and demands for excessive regu- mortgage debacle. US$1.5 trillion - and still declining fast, lation will hamper their ability of those The problems for investors have as investors run for cover. But just where funds to operate efficiently, effectively, been made much worse by the exception- are these investors going to put their resulting in the baby being thrown out al levels of market volatility and a series money in 2009; and is there anywhere with the bathwater! of major scandals, culminating in the left that offers a safe bet for investors? Maybe recent events will wake up Bernard Madoff affair involving allega- The simple truth of the matter - investors, regulators and other tions that investors were defrauded of whichever way you cut it – is that the Government agencies alike to the fact US$50 billion in a “ponzi” (pyramid) alternative investment industry probably that you cannot throw generic terms like scheme. still offers investors the best chance of a “ Hedge Funds” around and that you need to do the homework, as with any- In effect, the global situation is so safe and profitable place to put their thing in life, if you want to be successful. bad that politicians are apparently loath money in the current circumstances. Look up the definition of a hedge to admit to the depth of the problems, The recent spout of scandals and fund on any good internet search engine and the implications for national debt reports of poor performance is, unfortu- and you will probably come across at and pension commitments. nately, exactly what is needed to shake up the industry – an industry that has long least ten variations. Only a few independent commenta- suffered from misconceptions, poor Once you think you’ve defined what tors are prepared to address the serious- definitions of terms and a regulatory a hedge fund is then look at how the ness of the situation. blanket that has failed to do its job. industry itself categorises the 10,000-plus The Alternative Investment industry hedge funds with confusing terms such has suffered greatly from the series of Still performing as ‘long only equity’, ‘equity short bias’, major fund disasters, with the shattering Despite the recent traumas, many of ‘equity market neutral’, ‘event driven’, of trust in the competence and integrity these alternative investment funds have ‘managed futures’, ‘equity arbitrage’, of fund managers and regulators. continued to perform well. ‘short volatility’ and many more! Alternative Investment vehicles These are generally the funds with The list is seemingly endless, but (“hedge funds”) were developed to pro- sound strategies and risk management unfortunately, it is also essentially mean- vide absolute returns and, therefore, to who have avoided the traps of excessive ingless as many hedge funds do not oper- offer some security in the event of the leverage and the trading of financial ate with any constraints and the authori- ties are apparently unable to ensure that £400 they do what they say they will do. £350 £300 Realistic aims needed £250 So how can an investor select a suitable £200 fund? The secret lies in the identification £150 of sound strategies and competent man- £100 agement capable of achieving realistic £50 aims. £0 The alternative investment industry 1999 2000 2007 2002 2005 2004 2005 2006 2007 2008 probably still offers most investors the CSFB Hedge Fund Index S&P 500 Index of 6 Trend Following Funds best chance of future success, but investors can no longer assume anything The Chart shows a comparison between the S&P 500, a widely used benchmark of Global stock markets , and will have to develop a better the Credit Suisse Tremont Hedge Fund Industry benchmark of returns, and a custom benchmark of the returns for the ten large ‘trend following’ vehicles (asset weighted and managing US$20 bn). Continued on p14

12 GIBRALTAR INTERNATIONAL WINTER 2008/9 PROPERTY Ruling prompts property revival, but shortages again predicted An expected shortage of rental property, heavily favoured by finance centre workers, is expected to push achievable rents up by around 10 per cent this year.

he rise is the result of the twin across the border to save money. shortage of quality one and three effects of lack of sufficient The first quarter of each year always bedroom rental apartments, and as a suitable properties and an sees an increase in letting enquiries when result generally yields on capital are anticipated increase in demand High Net Worth and other individuals expected to remain around 6 per cent prompted by the poor consider relocating to Gibraltar to take this year”. exchangeT rate and the recent European advantage of the favourable tax rates In the final quarter of 2008, Court of Justice (ECJ) ruling that before the UK financial year ends in Chesterton reported an upturn in inter- confirmed Gibraltar’s Corporation Tax- April. est from some buyers looking to buy setting ability according to estate agent, The Ocean Village estate agency, Gibraltar property as opposed to leaving Chesterton. opened last summer, has confidence that cash in the bank, because saving rates Commercial property too should the revival in the rental market will also are low at about 4-4.5 per cent. receive a boost, both because 80 per cent generate interest in property sales, after of the 15,000 sq m of new office space a year of some decline in prices – down Local tax breaks has already been let or sold and also 5-10 per cent on 2007. Most employed and self-employed first from more companies choosing to The currency value issue, coupled time buyers who live in Gibraltar also relocate to Gibraltar following the with the availability now of low benefit from Government tax breaks. favourable ECJ decision. mortgage rates, has prompted people to Boyd calculates that a working look at buying Gibraltar property. couple buying a typical £150,000 prop- Euro promps However, stock levels are expected erty with a 90 per cent mortgage could “For some time we have known of to diminish in 2009 as more sellers recover half of the interest paid for the insurance and gaming companies in choose letting as an option whilst they first four years of their loan, through particular, holding off their decision to wait for market conditions to improve. tax relief and the present attractive move here until the tax situation was In the last 24 months, Gibraltar has mortgage rates. resolved; now there is nothing to seen the largest delivery of privately “Unlike other Mediterranean desti- nations, where the local population have Original and effective stop them”, explains Jeremy Boyd, built property – some 900 units Chesterton’s local director. completed – “and occupancy rates now been priced out of the market, But deteriorating and unsettled exceed 90 per cent with the best rental Gibraltar’s first time buyers benefiting Sterling-Euro exchange rates is prompt- properties receiving multiple offers”, a from both reduced Sterling interest rates ing existing staff working on The Rock situation expected to remain in 2009. and the favourable tax incentives to buy and living in Spain to consider moving Boyd notes that “there is a distinct property”, he notes. solutions Trend followers continued from p12 can find only eleven investment vehicles Trading with the odds in your favour understanding of where they put money. with a 20-year track record averaging does not, however, guarantee the smooth modelled for you Similarly, investors will have to fully more than 20 per cent a year, and four returns that investors are most happy understand that consistent, smooth and out of five of those vehicles are systemat- with. Best Private Bank in Western Europe and the UK for its offer in Structured guaranteed investment returns are a ic long term trend followers. Results are best judged over years Products (Euromoney 2008). Outstanding Wealth Manager for Innovation of “Holy Grail” that simply does not exist. Systematic trend followers have a rather than months and investor patience Products and Services (Private Banker International 2008). Some well established strategies do, simple belief that you must trade with the with some volatility of earnings is chang- Contact: Tel. +350 2000 2000 - PO Box 375, Hambros House, 32 Line Wall Road, Gibraltar - www.sghambros.com however, continue to achieve the twin odds in your favour and also that effec- ing. Investor demands for smooth aims of high levels of return and low risk. tive risk management is the core to suc- returns are responsible for most of the Issued by SG Hambros Bank (Gibraltar) Limited which is regulated by the Gibraltar Financial Services Commission. The most successful investment category cess. dangerous high leverage strategies in 2008 – and many, myself included, However, typically it is this simplici- developed in recent years! would argue the most successful invest- ty that seems to puts investors off; most ment category for the last 30 years – are seem to believe that a successful strategy Chris Clarke is a fund manager for those funds generally referred to as ‘sys- must involve great complexity, large CrystalClear Capital Management Fund, SG Hambros tematic trend followers’. numbers of economists and mathemati- part of Quay Umbrella Fund PCC Ltd. From my many years of research I cians and “star” managers. www.QuayUmbrellaFund.com Imagine solutions inspired by you.

14 GIBRALTAR INTERNATIONAL WINTER 2008/9 BUNKERING BUNKERING Moves to keep Gibraltar’s key ship refuelling sector afloat Far reaching plans are being made to secure and expand Gibraltar’s position also considering how much extra use could be made of existing anchorages if the pres- in 2009 as the most important ship refuelling point in the Mediterranean. But ent three large ‘mother’ storage ships are forced out of operation. Gibraltar International Editor Ray Spencer finds that significant obstacles have But in response to inquiries from still to be overcome. Gibraltar International, both the International Maritime Agency and aced with growing competition Transfer from military ownership to European Commission representatives around the Straits of Gibraltar civilian use of the depot could lead also to Bunkering Growth denied knowledge of any plans to prevent and physical constraints within opportunities for blending fuels at the on- Action Plan use of floating bulk storage ships. Many in the Bay, Government, Port shore depot, simplifying the bunker barge the industry, however, believe otherwise! Cruise ship Island Escape bunkering in Gibraltar Port Measures being investigated include: Davis Tony and photographer Courtesy of GPA Authority and industry leaders ship-to-ship operation, which still would be ■ Fare turning their attention to how the needed. reinstate ex-Military under-Rock bunkering business can be retained – and There would be local employment too; at storage tanks at US$ 30m; ■ further expanded. present those manning mother ships gener- greater harbour anchorage However, Gibraltar has very little land ally are foreign nationals not contributing efficiency management at £0.5m to gain 10% more capacity; Growing Straits Competition available for on-shore fuel storage facilities to the local economy. ■ re-opening Eastern anchorages to and bunker operators experience conges- But the government would be under add 30%+ capacity; Choice of which port to refuel at and which company to use is about tion at the deep water anchorages where pressure to ensure a good financial return ■ under-sea bulk storage. icant bunkering, and Span’s Algeceras, on ship-to-ship fuel transfers take place. for Gibraltar and to guarantee equal access location, price and availability and speed of turn-around; until recently, the north of the , is also Further pressure on Gibraltar to find a for all operators to the available supplies, if and thereby shorten calling times,” explainsthe demand for bunkering has been greater than Gibraltar’s supply. expanding its port facilities with associated solution comes from the concern of any private sector company was to gain Captain of the Port, Peter Hall, who is also bunkering expecting a larger share. environmental groups in Spain at risk of control of the large on-shore depot. the GPA chief executive. But bunkering growth in the Region pollution arising from accident or spillage Another, even longer-term potential The Port is bidding for £500,000The Rock holds a key strategic position for marine fuels soared. Gibraltar proved well commercial shipping – arguably the most able to reap the benefits of growth and generally stalled in 2008 and Gibraltar’s involving the three floating bulk fuel solution involves installation of a of extra capital spending in the capacity to handle more business has been storage vessals known as ‘mother ships’. land-based storage facility underwater, Government’s 2009-10 departmental budg-important and cost-efficient means method now is estimated to be the 7th largest of transporting goods around the World. bunker port in the world! called into question. Nearly all marine fuel According to industry sources, there is which might involve widening of Gibraltar et plans, which would go on extra staff to from Gibraltar is supplied off-shore and the strong possibility that EU and interna- Port’s Detached Mole that protects carry out on-board barge vetting and to Vessels carrying all types of cargo have According to to be fuelled along the route of their voy- (GPA) figures, 4.3m tonnes of bunkers industry sources suggest there is only limit- tional maritime Regulators may seek in the Gibraltar’s harbour basin. supplement existing CCTV, purchase of ed further space at the anchorages, which next few years to outlaw these ships. More immediately, the Gibraltar Port new infra-red night time vision cameras toage. Some 75,000 ships pass through the were delivered in 2007, compared with just would severely limit further growth. For two years, the Gibraltar government Authority is looking at how to better use aid monitoring of bunkering activity. Straits of Gibraltar on their way from the 0.84m tonnes in 1990. Apart from its strategic location, ship has been in behind-the-scenes negotiation the - at times congested - sea anchorages. At the same time, re-opening of anchor-Mediterranean, the Black Sea, the Indian Only 1,617 ships called to Gibraltar for operators are also attracted to Gibraltar, with the British Ministry of Defence to take The aim is to achieve “greater efficiency ages on the Eastern side of the Rock – sub-Ocean and beyond to the Atlantic ports of bunkers in 1991, but 5,367 did in 2005 because its high turnover provides a com- over around a dozen large fuel tanks through better management of the facilities ject to the prevailing strong weather condi-Europe, North and South America and and still more - 5,640 - in 2007, represent- petitive market, there are low port dues installed more than 50 years ago at the tions, at certain times of the year - is anoth-West Africa. ing more than two thirds of the deep-sea and the government continuously monitors MoD’s King’s Lines fuel depot, deep inside er idea being actively considered. Shipping routes between Europe and vessels calling at Gibraltar. Top 10 Mediterranean bunker ports activity, the GPA says. of The Rock. Whilst this would require governmentWest and South Africa, Latin America and Other main ship re-fuelling centres in 18.3 million tonnes Gibraltar has been successful too in That would involve total refurbishment risk management assessment and approvalEurope, North America and Africa are also the region include the Suez Canal and Istanbul 8% attracting an increasing number of cruise or replacement of the disused tanks and to give perhaps up to 20 more bunkeringin close proximity to the Rock. Greece, with Piraeus / Kali Limenes supply- Genoa 9% ship to call at the Port and being able to their associated two separate pipelines anchorages, crucial to all the efficiency It’s little wonder that the Port of ing around 4m tonnes. But whilst , Marseille 8% take on competitively priced bunkers down to the Port at a significant cost - “pos- measures is introduction of greater manage-Gibraltar, at the cross roads of major glob- just across the Straits from Gibraltar, alongside the berth at the same time as call- sibly easily up to $US 30m”, according to 11% ment of information systems. al trading routes, has established a strong remains small in this business, other near- Novorossiysk 5% ing at a popular destination is an addition- an industry insider. “All ships today have auto-position as a major bunkering centre, by locations may in future represent a larg- al attraction to ship operators with “Even in these days of credit shortages, Barcelona 5% identification systems that help plot theiraccounting for just short of a quarter of all er competitive threat. Western Mediterranean itineraries. there are still sources very interested to position, but this is presently limited bythe business undertaken at the top ten Malta 4% However, the government receives rela- invest in such a venture”, the source con- Athens 23% horizon range, so a new aerial on top of TheMediterranean bunkering ports. Bunkering stalls tively little direct income from the four firmed, “but it would take two years for the Venice 3% Rock is an essential ingredient”, Hall points Unprecedented world-wide economic Oil giant Total is understood to be companies in bunkering, even though it is venture to become a reality and possibly Gibraltar 24% out. growth in the last couple of decades result- involved with the Moroccan government in by far the Port’s largest activity, because five years to achieve full potential”. In the meantime, bunker operators areed in a huge increase in maritime trans- portation and consequently the demand for a long term plan to construct a new port most of the transfers of fuel take place at facility for Tangier that will include signif- Continued P19

16 GIBRALTAR INTERNATIONAL WINTER 2008/9 WINTER 2008/9 GIBRALTAR INTERNATIONAL 17 BUNKERING

Continued from P17 sea from the three bulk storage vessels us, because it will bring still further anchored in Gibraltar territorial waters focus on the available bunkerage solu- that in turn, receive their supplies from tions and particularly on the other facil- tankers. GPA revenue is around £4m a ities that can also be offered as part of a year in Port dues and pilotage (that also complete package”, says Bassadoni. includes cruise ships) and a bunkering The Gibunco Group, founded by his MS Europa Ventures bunkering levy. A fleet of 14 bunkering barges – in father in 1968, “is also in ship repair, reality, well-equipped sea-going tankers hull cleaning and fuel conservation serv- -mostly ferry fuel between the anchored and delivery facilities, but in most cases, ices, so we have potential to offer clients ‘mother ships’ and the merchant cargo blending capabilities to suit the varying more than a refuelling service”, he ships that stop in Gibraltar’s waters. quality of desired fuel for the different points out. Five more barges ply between shore engine requirements. The varieties of However, there are global factors that storage facilities in Gibraltar and also marine engines require different types of might have a short-term negative effect particularly from the CEPSA refinery at fuels, ranging from heavy oil fractions to on the Gibraltar Bunkering Industry. Algeceras used by tankers from the the light types of marine diesels. The “credit crunch” and economic Gibunco Group, which accounts for Delivering bunkers requires close co- downturn being experienced by major nearly a third of Gibraltar bunkering ordination with the Port Authorities, the industrialised nations will lead to a activity. calling vessel, the Shipping Agent and noticeable reduction in the volume of Only the Gibunco Group is Gibraltar- often the ship owner. Logistics for the maritime shipping. The level of bunker- based and operates its Petroleum bunker supplier are also an important ing has already dipped slightly locally, Division from Europort, via a jointly- factor with a need to have the right sources report, and the volume of fuels owned operation with Spanish oil com- barge with the right fuel available at the transferred will most likely fall further pany CEPSA, and also through its own closest time to the arrival of the vessel. this year. Penninsula Petroleum Company. Current vessel charter rates are such But the Shipping Industry will not “I believe the perception is that that delays for any reason are expensive, collapse as there always will be demand Gibraltar does not get enough from making close co-operation not only for transportation of goods regardless of bunkering, but our costs here are in line important but also necessary to improve the ups and downs in the economic with the rest of the world and in addi- available space for other bunkers. cycle, but the volumes of trade almost tion, The Rock economy benefits from Another factor is the focus being put certainly will be lower for a couple of business generated by agents with crew on environmental issues and safety, such years. changes, the airport, supplies and that Gibraltar moved in 2002 to intro- Well before the 2008 hike in fuel repairs”, said John A Bassadoni, duce a Bunkering Code of Practice, with prices, the trends was for building much Penninsula’s managing director. a Bunkering Superintendent position, larger tankers and container ships, as and a licence-based operation, using cargo charterers continue to seek greater standards based on Singapore, consid- cost-efficiency and it is expected this will Not rust buckets ered to be the safest and cleanest be maintained as the cost of barrels Contrary to the view of some environ- bunkering port in the world. again gets more expensive. mental pressure groups, the floating “Increasing competition in this part The result is larger engine sizes and a storage vessels operated in European of the Meditteranean will be good for greater daily consumption of fuel - up to waters are not ‘old rust buckets’, but 250 metric tones - which means a single modern, double-hulled sea-worthy Bunkering in Gibraltar bunker requirement of 6,000 metric ships, capable of normal freight duties. tones or more. Significant investment is They are manned by sufficient crew 2007 actual 2008 estimated likely to be needed to gain larger and to satisfy both the local Maritime more sophisticated bunker barges. 38% Authority from a safety perspective, and 37% In the past year alone, five more the vessels’ own Maritime Registry on bunker barges began operating in 32% 32% safe manning levels for the type of oper- Gibraltar waters – a 25 per cent ation for those vessels. increase. Peninnsula has invested in 7,000 There is already evidence that new 27% tonne bunker tankers, like the £15m Total marine engines operate on lower-grade 23% Gibunker 100, the largest and most volume: and cheaper fuels with high viscosities 4.3m modern bunker tanker in the area; it is tonnes and densities the only one of the new breed opera- With suitable “bunker barges” capa- tional in Gibraltar at present, but 8% ble of blending fuels to the required Bassadoni is considering moving a sec- 3% grades on-board and delivering these in ond of his four from Singapore to larger quantities at the right tempera- Gibraltar to meet demand. tures, Gibraltar bunkering operators The bunkering operations, whether would be able to attract the super- Vemaoil Aegean Bunkers Cepsa on or off-shore, require not only storage Gibraltar Gibraltar tankers as well!

WINTER 2008/9 GIBRALTAR INTERNATIONAL 19 TELECOMMUNICATIONS Competition hots up to bring still better deals and more telecommunications services Telecommunications in Gibraltar are suddenly blooming, with tens of millions of If you could see into the future pounds being invested in establishing and upgrading new networks and physical infrastructure as part of liberalisation measures.

you would already know lthough the Gibraltar Regulatory Authority (GRA) was established Caledonian is the more than eight years ago with a independent internet pioneer company remit “to develop an effective GibNet Ltd. choice for both business and Prompted by demands from the right choice residentialA consumers” it is only now in growing number of Gaming companies 2009 that a significant effect will be for a secure and reliable mass data net- seen on landline, internet and mobile work, Sapphire decided to invest over telephony. £6m to satisfy the ‘high end’ corporate Owned 50:50 by Telekom Slovenije business market – bandwidth & speed- (Slovenia’s part-State owned telephony hungry businesses – and other internet business) and the Government, and potential landline traffic. Gibtelecom is still Gibraltar’s largest By end-2007, it completed installa- supplier by far of fixed and mobile tion of a 10km ring of fibre-optic telephony and internet provision. cable – capable of handling far greater But it is now that the business faces volumes of data and voice traffic at much its strongest competition on all fronts. faster speeds than traditional copper Two private companies, Sapphire cabling – utilising Ministry of Defence Managing Insurance Companies in Gibraltar Networks and CTS, have been working and GibElec ducting around The Rock. to supply alternative services claiming It also had installed a 6.5km fibre successfully and Independently since 1996 lower prices – and there’s the prospect of optic cable through the frontier to La still greater competition to come. Engineer working on Gibtelecom’s advanced Linea in Spain! switching equipment. Newest on the scene is CTS, which That gave Sapphire its trump card by was granted 40,000 landline and making possible internet and leased lines Contact our Insurance Management Expert 100,000 mobile numbers, when licensed in at 12p for businesses and 8p for resi- through dual independent fibre optic Penny Hudson FCII at end 2007. However, for Gibtelecom’s dential customers using VoIP (Voice over data links via Telefonica and ONO to its access charge and technical reasons to Internet Protocol). Madrid Point of Presence (POP) data effectively share access to cabling and at By end-2008, Gibtelecom’s rate for management centre. key junction boxes, it was a year before those calls was down to just 7p a minute, Sapphire, like Gibtelecom, uses a the CTS 216 fixed line prefix could be illustrating worldwide trends and Telefonica link to Madrid, but also backs made workable, even within Gibraltar. the power of competition, with CTS this up with a separate ONO fibre data countering with an alternative £10-a- link to help ensure complete reliability of month unlimited call package. service with differing technologies. “With regard to Local Loop Access, Competitive power we’ve been trying to gain access for aboutDual supply essential The firm, started 22 years ago by Oxford 18 months, but the pricing structure from(The POP supports multiple customers couple Angie Jones and Steve Gibtelecom is ridiculous and we believe,for any service they need, Lambourne, began in Gibraltar in 2000 anti-competitive. The Regulator isincluding next-generation services such providing computer systems services, reviewing this situation at present”, Steveas triple and quadruple play, and data recovery and server hosting. But in said in December. As a result, CTS offershigh-bandwidth business applications.) late 2003 it evolved into a telephony a variety of wired and wireless solutions. With southern Spain traditionally service provider offering international Sapphire Networks in late 2004 wasthe weakest link in the international com- PO Box 371 Tel: +350 200 45578 voice routing over the internet. the first fully independent telecommuni-munications chain to Gibraltar, this dual 2nd Floor Fax: +350 200 45579 At that time, Gibtelecom charged cations company to be granted a licencearrangement has been essential for 85 Main Street E-mail: [email protected] between 19p and 29p a minute for direct born out of the takeover by itsSapphire, as with the other key market Gibraltar www.caledonian.gi dial UK calls, while Steve says CTS came Broadband Gibraltar Ltd of the 1995players. Continued P22 FSC Licence No 000493B

WINTER 2008/9 GIBRALTAR INTERNATIONAL 21 TELECOMMUNICATIONS

Competition from P21 “As a result - by using two independ- ent companies through Spain - there has never been a time when both are down at the same time”, explains Lawrence Isola, Sapphire director and chief executive. “Being ‘out’ even for a fraction of a second can cost some companies thou- sands of pounds and make or break a deal; we have had 100 per cent up-time”, he adds. Undoubtedly, with one eye on actual and anticipated greater competition, Gibtelecom has continued its policy of investment in and upgrading of it networks and infrastructure. To satisfy customer demand for internet ‘Hosting services’, Gibtelecom commissioned a state of the art data and server hosting centre at its Mount Pleasant premises. Monitoring of Gibtelecom’s network and international routes at the Network Operations Centre Such was the demand that the facility was quickly oversubscribed and a second £1m phase launched in November 2008. Nevertheless, Sapphire after three especially on three year contracts, and years claims an impressive 50 per cent of still bigger savings for its leased line Gibraltar’s Gaming Companies use its customers. £20m+ invested internet services, although some financial Land line use in Gibraltar – as else- services businesses contract with more where in the world – is falling in relation Gibtelecom’s Network Operations than one company to safeguard continu- to mobile calls and also because of use of Centre is also based at Mount Pleasant ity of service – a belt and braces VOIP by companies as well as by individ- providing 24/7 call centre facilities and approach. uals. Gibtelecom estimates that over 60 network monitoring of its local and inter- Isola, who also manages Europort, per cent of Gibraltar households have a national infrastructure. Gibraltar’s largest commercial centre, broadband internet connection. To help stay ahead, “some £20m” also says that Sapphire has quietlyHigh internet bandwidth was invested in the 2001–2006 period on targeted specific market segments andThe number of internet subscribers grew technical and physical developments, captured four trading companies andaround 15 per cent to just over 8,000 in according to Tim Bristow, Gibtelecom four banks as well. the year to 2008. chief executive He maintains that Sapphire’s pricing Still more has been spent since then, offers significant savings over Gibtelecom Continued P24 including at Mount Pleasant and on for high-end internet bandwidth users, establishing in January a John Mackintosh Square building adjacent to the Haven and City Hall, where much of the company’s fixed line switching and internet equipment is located. For more than two years, Gibtelecom has also each month been offering a new price reduction or service enhancement. However, as the dominant supplier Gibtelecom is prevented under Competition rules from cross-subsidising its different products, many of which are inter-related, and provided on a cost-plus basis.

Majors in broadband Gibtelecom told Gibraltar International, that even in 2008 it was the major broad- band supplier with an estimated 90 per cent market share.

22 GIBRALTAR INTERNATIONAL WINTER 2008/9 TELECOMMUNICATIONS

Competition from P22 The Company’s latest annual report (Telecommunications, Information, (published in November) shows 2007 Multimedia, Entertainment)challenge, fixed line revenue only slightly down at withnotes: a special “We emphasiswill continue on all to activities address the £9.6m, but that was before significant thatTIME concern content development and price cuts last year; wireless turnover supply.” however, was up by just over 16 per cent Telekon Slovenia’s Report described year-on-year to reach £8.45m. Gibraltar as “a small but very developed Gibtelecom investment in bandwidth Mediterranean market with huge devel- capacity enables high IP bandwidth opment possibilities in the area of inter- availability via diverse and resilient national operations”. international routes crossing Spain and CTS has developed its independent links to . Since 2002, the broadband network for Gibraltar initial- Company’s bandwidth capacity has ly using microwave links across the Reliable Resilient Reassuring increased over thirty-fold. border, and is in the process of installing This year, Sapphire expects to get its its own fibre-optic circuits. own telephone numbers and plans an It is now investing around £3m attack on the residential and small busi- building a 3G network to support ness market with extensions to its cabling advanced features, including high speed “to take in the whole of Gibraltar’s west mobile broadband and expects to be side from Main Street down so that we running in the first quarter of this year to can begin in mid-2009.” Gibtelecom engineers working round the clock give CTS a target 30 per cent share of the to ensure service throughout The Rock All pictures © Gibtelecom. At that point, Sapphire hopes to mobile market. make further price reductions and intro- whereas it says Gibtelecom would cost duce product bundles with advanced significantly more - £1,500 installation telephony features on the network”, Isola and £610 rental! More competition reports. In February 2007, Gibtelecom con-“Everything will go mobile in future, cluded the first roaming agreement withbecause there is no need for a landline; a Spanish operator, Telefonica, allowingour variety of connections will give cus- Technology convergence Gibraltar GSM customers to use mobilestomers an effective fixed line facility”, A similar convergence strategy is being throughout Spain as a result ofsays CTS’ Jones. pursued by Gibtelecom, which does not Spain recognising Gibraltar’s +350 Last summer, the GRA noted: “With believe that competitors are always pro- International Direct Dial Code.all the available options, one of the most viding services at lower prices and “defi- Gibtelecom also roams with otherimportant choices consumers will make is nitely not with higher standards”, said a Spanish mobile operators. deciding which Internet Service Provider spokesperson. Gibtelecom then boasted 24,000(ISP) to use and it is the GRA’s role to Late last year CTS introduced a GSM customers with a per capitapromote the development of competition novel twist with WIMAX internet, the penetration of 83 per cent and sincein the internet services market thereby world’s first self-install subscriber unit, then Gibtelecom and other networksincreasing consumer choice and the eliminating the need for installation have concluded wider mobile accesspossibility of reduced prices for better Gibraltar need not be your telecoms weak link. Our network has been designed from the engineers and provided free with sub- agreements with greater use and lowerquality products.” ground up to address regional service issues with an inherently resilient design, world class scriptions. It also gives the same speed prices. It went on to report that there were partners and leading-edge DDoS protection. for upload, which is particularly useful to In November 2007, Gibtelecomeight companies providing a variety of business. revealed investment of over £2m infixed and mobile networks and services, If your business depends on the Internet or local and/or international leased lines, talk “a slight increase”. In the first year of service, CTS han- upgrading its mobile network to 3G stan- to us - we will tailor a solution to meet your needs... at the right price! dled at least £1m worth of calls and now dard, High Speed Downlink Packet But the GRA also revealed: “There aims for “the lion’s share based on ease Access and an intelligent pre-paid plat-continues to be interest from several Unmatched resilience comes as standard! of use and price, our 512kb ADSL offer- form, aided by the substantial experiencecompanies, which provide services and ing being around half the cost of of its much larger Slovenian shareholder,networks in other countries, to establish Gibtelecom”, explains Angie Jones, the which operates in eight other (mostlyfacilities in Gibraltar”. business director for CTS. south-eastern European) countries. That interest may be as stand-alone The Company also claims line rental ventures – Cloud Nine, a Guernsey-based savings for the business community by mobile network operator made Gibraltar For more information providing tiered ISDN lines from 8 to 30 TIME challenge business presentations last year - or Sapphire Networks another company that may see the channels (lines/simultaneous calls) and That meant higher speed internet access Suite 3.0.3 Eurotowers, PO Box 797, Gibraltar Gibraltar strategic potential! paying only for the amount needed. on mobile handsets and prepaid cus- Report by Editor, Ray Spencer Tel: +350 200 47 200 A business needing 10 channels, tomers being able to make outgoing calls * See also Gibtelecom sale in prospect – [email protected] for example, would pay CTS £400 whilst roaming across networks. Page 8 installation and £100 rental per month, And as a pointer for the future, www.sapphire.gi Telecom Slovenia’s 2007 annual report

24 GIBRALTAR INTERNATIONAL WINTER 2008/9 PROFILE PROFILE

since Lehman Bros collapsed and we are And with 40 years banking experi- enough change to think about for now”, reassuring clients about where to put Balancing risk and reward - ence and having joined SG Hambros as she explains. their money - some have gone into part of the Credit Agricole acquisition, Government Bonds and others are limit- Gibraltarian Elliott Federico is now the Tougher times ahead ing their exposure to any one sector, young, local talent needed to Domestic Team Director. In the meantime, commercial life is preferring to diversify”. Perez when aged 11 moved with her becoming tougher in Gibraltar, because But at no time in her career has family from Grimsby in North-east of the poor world economic situation. support private banking Perez had clients of her own - something “It’s a bit grim in finance at the moment when her father, Dr Robert of a phenomenon in private banking cir- Myers, became consultant anaethetist at with some businesses starting to tighten cles. “My background is my background Welding the staff of two private banks into a single team, S G Hambros Bank Gibraltar’s St Bernards Hospital. their belts with general cost cutting and it is as an accountant with the aim She met her husband, Lieut. Col. measures”, she notes. (Gibraltar) managing director Emma Perez shares her concern at the lack of of balancing risk and reward elements John Perez, when she was a 15 years old Nevertheless, she sees opportunities operationally”, she declares. ‘home grown’ expertise with Gibraltar International Editor, Ray Spencer. schoolgirl and he a private in the for further growth for Gibraltar in insur- Gibraltar Regiment where he is now the ance captives - those subsidiary compa- s a local pupil who gained ‘A’ that gives us an advantage at present Sharing the load Commanding Officer. nies formed to insure or reinsure the Levels at Westside Secondary over some others here”, she explains. So, following creation of the enlarged “We are extremely competitive and risks of parent and associated group School 38 years old Emma is operation, two members of staff with both in management positions”, she companies as an alternative risk man- keen to encourage more school Doubling profitability wide hands-on experience have been observes, “so we can understand and agement solution to the conventional insurance market - and also the ever leavers to find out what In mid-June 2006, Perez was offered the appointed to the SG Hambros share issues and experiences, bouncing growing funds industry. Athe Finance Centre has to offer, top job at SG Hambros following the (Gibraltar) Board to share the load ideas around”. Having married in 2004 “The key for Gibraltar’s continued particularly in specialist banking. departure after six years of Franco increasing the number of local directors and now with a three years old daughter success is not being too dependent on Although it can be good to have Cassar — now head of operations for to five. The new Director responsible for Elena, Perez combines a demanding job, any one sector. Being a small place, we work experience beyond The Rock, she Barclays (Gibraltar) — who had first the Hambros Ex-patriot Team is Claudia Army wife commitments and a busy know where our strengths lie and are thinks more attention in the banking spotted her talent for attention to finan- Rolf - a German national with 14 years social life, with no thought of what she able to adapt our product offering to area at Career Fairs and similar activity cial detail and recruited her as his local banking experience- was formerly might next aspire to do with her career. maintain our popularity”, maintains with schools can help to ensure there are deputy. ABN AMRO Gibraltar’s head of private Husband John is expecting to retire Perez. future generations of Gibraltarian “In that way there was continuity of banking. within the next year “giving us quite bankers. management and no upheaval”, she “There is no problem with recruit- said, “and since then we have doubled in ment of youngsters into the accountancy size each year in terms of profitability”. and legal professions in Gibraltar, but of S G Hambros. And five years later, S Even in December amidst the finan- when it comes to insurance and sophisti- G Hambros gained the local private cial market turmoil, Perez claimed an cated banking there is a real shortage of banking business of Dutch ABN increase both in the number of private suitable applicants”, Perez maintains. AMRO. banking clients and in client activity. And she should know - as a bright, Now, the enlarged pure private In part this is because Hambros has studious 18 years old, she was advised bank in Gibraltar claims to be the third always taken the strategic decision to by the then Hambros head to get herself largest on The Rock with some £1.3 lower its entry threshold into private a qualification suitable for the finance billion assets under management and banking from the more usual £250,000 sector and trained with KPMG as an £700m of deposits to support its low minimum disposable asset holding to accountant before joining private bank risk small loan book. include those people with over £100,000 Credit Suisse in the finance department. Emphasising the strength of the “with the potential to grow” the fruit of “The majority of my contempo- operation, Perez says there was established relationships with other raries in accountancy have also gone on “remarkable synergy” between ABN banks across the border. to hold successful senior positions AMRO and SG Hambros - “in general It’s also partly to do with client con- locally”, she points out. the staff welcomed the acquisition” - cern at poor investment returns from That choice of career training and there was “surprisingly very little their traditional investments. bi-passed the University route, but still overlap” in the 1,500-strong combined Staff are utilising a client profiling enabled her to become the SG Hambros client base. system called Wealth Solutions to ques- financial controller just over 10 years There is new language strength too, tion all clients on their attitudes to ago. with the former ABN team adding investment and risk, which is “focusing Since then Perez has seen SG German and Danish speakers, as well as their minds in a more structured way. Hambros, part of French banking giant Dutch, which gives Perez a growing Perez calls it “risk management Societe Generale, take over two other opportunity to further serve clients from both for the client, to establish pure private banking operations. In the Costa del Sol and the Algarve. individual investment profile, and for 2003, SG Hambros took on the private “We are not a tax exempt bank, so the bank to safeguard its operational bankers of Credit Agricole, which ended we are able to take deposits from profitability”. its Gibraltar operations. It was then that as well as clients across The bank’s clients are “concerned Perez became deputy managing director Europe and the rest of the world and about counter-party risk, particularly

26 GIBRALTAR INTERNATIONAL WINTER 2008/9 WINTER 2008/9 GIBRALTAR INTERNATIONAL 27 An oasis... 14 On the Quay in a busy world Restaurant

bedrooms 104 Bedrooms and suites in a colonial style all with a sea view

conference facilities Full upgraded conference facilities available for board meetings, training courses and presentations

Internet FREE Wireless broadband available throughout the hotel and an internet room for our guests to use Unit 14, Queensway Quay weddings Gibraltar The Rock is an ideal wedding venue Opening hours whether it be a small intimate wedding 12.30pm-11.00pm, last orders 10.45pm or large family gathering. We are also a recognised venue for civil marriages and ceremonies can now be conducted Tel: +(350) 200 43731 in various parts of the hotel

Swimming Pool Outdoor swimming pool with pool side bar and pool side menu. We welcome private pool membership, BAR ■ RESTAURANT our lido club, with private pool hire for parties and barbecues

Restaurant Modern Mediterranean The restaurant has stunning views dining over the bay. Our “house” menu is excellent value for three courses including an aperitif Manzanilla, olives and coffee. A full á la carte menu along with a superb eclectic wine list is also available

wisteria terrace The Wisteria Terrace for lunches, dinner, barbecues, afternoon teas, evening drinks and informal dining

Barbary bar Barbary Bar and terrace for a relaxing drink and for the wine buff, a choice of nine wines by the glass

Lounges Take a good old fashioned English tea in one of the spacious lounges Business lunches a speciality

54 Irish Town, Gibraltar open:10am-late Europa Road, Gibraltar closed Sundays + Saturday lunch Tel: +350 200 73000 Fax: +350 200 73513 E-mail: [email protected] Tel: +(350) 200 51738 www.rockhotelgibraltar.com ROJO CAFE to reserve a table LAST WORD CREDIT CRUNCH Global vision, local view are the ‘Words of the Year’, International insurance management but it’s not all down to doom and gloom… bespoke service Susie Dent, the lexicographer and resident dictionary expert and adjudicator on blue-chip client base Channel 4 TV’s long-running game show Countdown, reckons that the words on experienced professionals everyone’s lips to sum up 2008 are CREDIT CRUNCH. part of an independent international group urely few people can think why might see this language thing UPside STAGFLATION, or JINGLE MAIL, that should be! But the term joins down. Words of the Year also looks at expres- For more information please contact: a host of other new or newly- So words can be interesting and sions from other areas of our lives – Kevin Rye: [email protected] revived words – some serious, confusing; how we use them, even more including online social networking, Heritage Insurance Management or and some rather more light-heart- so. ethical living, and the world of styling - (Gibraltar) Limited Tracey Jones: [email protected] Sed - in her latest book, Words of the A look at some pairs or groups of that have been ‘bubbling under’ in 2008. 735 Europort Gibraltar Year, published by Oxford University nouns that we most use reveals that man It was a year when the Google inter- Tel: +350 200 52519 Press. is 7th, whereas child is 12th and woman net search engine increased its linguistic Fax: +350 200 51530 Words of course, are the way we 14th! dominance thanks to our quest for communicate – sometimes more Work, however, is at number 16, GOOGLEABILITY, and the newer A Heritage Group Company effectively than others. And English is a but play and rest do not feature at all in MOOFER (mobile out-of-office worker) www.heritage.co.gg Licensed by the Gibraltar Financial Services Commission. Licence Number: FSC01003B living language, making its nuances the top 100! Now problem is 24th, but and SCUPPIE (Socially Conscious, interesting and confusing. there is no solution in sight and while Upwardly-mobile Person – a socially The people producing the Oxford money is surprisingly low at 65, cash is responsible yuppie) came to reflect our English Dictionary say the 42nd most absent. modern working lives. common word is UP. It’s listed as being used as an [adv], [prep], [adj], [n] or [v]. It’s easy to understand UP, meaning toward the sky or at the top of the list, but at a meeting, why does a topic come UP, why are the officers UP for election “the world’s financial markets and why is it UP to the secretary to write UP a report?. We lock UP our have been one of biggest home and clean UP the kitchen. At other times the little word has generators of vocabulary a special meaning. People stir UP trouble, line UP for tickets, work UP in the year an appetite, think UP excuses and wrap UP gifts. And this UP is confusing: a drain But I digress. Susie Dent tells us: The 2008 bank of credit” crunch must be opened UP, because it is “As recession fears escalated, it may be words of the year also includes such stopped UP; we open UP a shop in the productivity of the linguistic kind that is diverse terms as IPOD – an acronym for morning, but close it UP at night! the safest bet. ‘insecure, pressured, overtaxed, and When it threatens to rain, we say it is ‘Credit crunch’ is an example of an debt-ridden’ - and FUNT – someone clouding UP; when the sun comes out established term – it was already in who is Financially UNTouchable! we say it is clearing UP and then, things currency back in the 1960s – being CRIPES, as Boris Johnson would dry UP. resurrected as circumstances change”. say (using a dated word expressing sur- We seem to be pretty mixed UP And if you haven’t already guessed, prise or dismay), let’s not become a about UP! Extending it a little more, the world’s financial markets have DOOMER (an abbreviation of ‘doom- why are we are down on our UPpers, been one of the biggest generators of and-gloomer’). when we are UPping the anti, and as a vocabulary in the past year, Ms Dent I’d better end where I started, by result, possibly getting our come- maintains. shutting UP – thanks Susie. UPpance! In addition to the now familiar It’s easy to understand why people financial terms such as NINJA LOANS, Ray Spencer

Contact: Brian Shay Merchant House, 22/24 John Mackintosh Square, P.O. Box 758, Gibraltar. Tel:+ (350) 200 41200, Nightline: + (350) 200 48282, Fax:+ (350) 200 41201, [email protected], www.deloitte.gi WINTER 2008/9 GIBRALTAR INTERNATIONAL 31 gibraltar to manchester 3 flights a week to luton daily flights fly from £26 one way including taxes

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