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investigation had highlighted once again the difficulty of locating the necessary funds to mount an expensive and extraordinary operation in a DT, given that the FCO had no specific DT vote. Fortunately the Montserrat government had agreed to pay for the Fraud Squad operation to date, but its willingness to do so might
not last much longer.
5. Dr Brewer reiterated the point about liability; HMG had not been technically liable in the Barlow Clowes case, but that had not prevented considerable public pressure being brought to bear on HMG (and the DTI). There was little further to report on the progress of the Coopers and Lybrand review. Mr Gallagher had been usefully swept up into the Montserrat investigation, which had thrown up some important points of wider application. His survey was likely now to concentrate as much on implementation of existing regulations as on new legislation. He was currently writing up his reports on Anguilla, Cayman and Montserrat, and would be visiting BVI and (briefly) TCI as from next week. He proposed to draw up a list of recommendations and a framework for implementation which would form the introduction to his reports. He was likely to recommend clawing back control of the DT offshore financial sectors, with immediate return to local control in for those territories which were well administered and reputable. He would probably propose that the East Caribbean Central Bank should assume a more active supervisory role; the High Commissioner in Bridgetown had indicated he would support this. Finally, Dr Brewer noted that the problems of adequate regulation of offshore financial sectors extended beyond the Caribbean. She cited the example of the proposed Gibraltar Stock
Exchange.
6. Mr Moody observed that Gibraltar was a special case among the DTS since the Territory was obliged to conform with EC financial sector legislation. The Stock Exchange project exemplified the problems of conformity with EC directives. The Gibraltar civil service found it difficult to translate EC legislation into a local context. A proposal had been submitted to send a DS officer to Gibraltar who would assist with the implementation of EC legislation, but this scheme now appeared unlikely to go ahead.
Governor of Gibraltar, of course, possessed residual powers over the
The
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