Tender: Use of Offshore Jurisdictions in Investments
United Kingdom, 03 February 2016
The Bank’s approach to the use of offshore jurisdictions in banking operations is reflected in Offshore Jurisdictions in Bank Projects, (referred to in these Terms of Reference as the “Bank’s policy”, “current policy” or, as the context requires, “policy”), a policy document which respects and builds on these objectives and underscores the role of the Bank in supporting international efforts to combat improper financial activities, in particular by making use of the peer group assessments of the Global Forum on Transparency and Exchange of Information for Tax Purposes (“Global Forum”) as well as the work of the Financial Action Task Force (“FATF”) in countering money laundering and terrorism financing risks. Subsequently, the core principles of the Bank’s policy were adapted to treasury operations.
The policy requires inter alia that “[w]henever Bank financing involves […] an entity [be it the borrower, the investee or the guaranteed entity benefiting from the Bank’s loan, investment or guarantee, or a controlling entity of such borrower, investee or guaranteed entity] established in an offshore jurisdiction [i.e. a country or territory different from the country of operations where the project is located]:
The Bank shall satisfy itself that there are sound business reasons for the use of the offshore jurisdiction in the context of the project being financed. Whether there are sound business reasons in a given project will depend on the surrounding circumstances.
The Bank shall not provide financing where the offshore jurisdiction is not an appropriate one as regards taxation or money laundering and terrorism financing as determined by reference to the work of Global Forum on Transparency and Exchange of Information for Tax Purposes (for taxation) and Financial Action Task Force (for money laundering and terrorism financing). As regards the taxation requirement, an exception applies in the event that the offshore controlling entity of the borrower/investee/guaranteed entity is established in its home jurisdiction. “the [r]eport [submitted to the Board of Directors of the Bank] shall contain an [offshore jurisdiction annex] setting out [inter alia] the sound business reasons for the use of the offshore jurisdiction, including identifying any relevant double taxation treaties.”
In connection with the Bank’s on-going policy implementation, the management of the Bank pays close attention to the sound business reasons for using offshore structures.
In 2013 the Bank engaged a consultant to develop and provide tools assisting it in its effort to assess, in accordance with the revised policy, whether there are sound business reasons for the use of an offshore jurisdiction in the context of a project being financed. The consultant developed a tax toolkit (the Tax Toolkit) used by bankers for assessment of tax- related issues.
The Bank now intends to engage a consultant (the Consultant) to assist on an on-going basis in providing necessary assistance and advice on the most appropriate implementation of the Tax Toolkit as a means of reaching the objectives set in the Domiciliation Policy, with particular focus on the ad hoc project structure advice (the “Assignment”). This is expected to result in the expansion of the in-house expertise and knowledge of the Bank bankers in how to identify and adequately review and process the domiciliation issues related to the Bank operations in full compliance with the Bank Domiciliation Policy.
The objective of the Assignment is to:
assist the Bank in the review of domiciliation issues related to Bank transactions, in particular, whether there are sound business reasons for the use of a third jurisdiction in the context of a project being financed, to help implement the objectives of the Domiciliation Policy; and
provide, as necessary, advice and training on issues related to domiciliation and latest developments in the domiciliation area, international tax policy, and in particular in respect of works undertaken by the Global Forum, the OECD and the G20.
The selected Consultant is expected to provide the following services:
Review the Tax Toolkit;
Deliver training sessions on the Tax Toolkit;
Prepare territory factsheets;
Prepare briefing papers on specific tax topics;
Attend meetings with Bank staff;
Provide ad hoc tax advice in relation to project structures; and
Provide other miscellaneous tax support.
Assignment Start Date and Duration: The Assignment is expected to start in April 2016 and has an estimated overall duration of 24 months.
Submission Deadline: 16 February 2016
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