trinidad y tobago - citibank · trinidad y tobago 514 country overview c. political outlook 2012 -...

TRINIDAD Y TOBAGO

TRINIDAD Y TOBAGO

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COUNTRY OVERVIEW

BASIC DATA

Climate:

Language:

Measures:

Currency:

Time:

Government:

Holidays:

Capital City:

Land Area:

Population:

Main Towns:

Port of Spain

5,000 sq km

1.23M (2011)

Port-of-Spain (57,000)

Tropical; rainy season (June to December)

English (official), Caribbean Hindustani, French, Spanish, Chinese

Metric System

US$1 : $6.40TTD (Trinidad & Tobago Dollar). Floating exchange rate

GMT -4

(2011 Dates)New Year’s Day: January 1stCarnival Monday: February 20thCarnival Tuesday: February 21st Spiritual Baptist Day: March 30Good Friday: April 6Easter Monday: April 9Indian Arrival Day: May 30

Prime Minister Kamla Persad-BissessarPresident George Maxwell RichardsAttorney-general Anand RamloganEducation Tim GopeesinghEnergy Kevin RamnarineFinance Winston DookeranForeign Affairs Surujrattan RambachanHealth Fuad KhanJustice Herbert VolneyLegal Affairs Prakash RamadharLocal Government Chandresh SharmaNational Security John Sandy Planning & The Economy Bhoendradatt TewariePublic Administration Carolyn Seepersad- BachanPeople & Social Development Glenn RamadhardsinghHousing & Environment Roodal MoonilalSport Anil RobertsTourism Rupert GriffithTrade & Industry Stephen CadizWorks & Infrastructure Austin “Jack” Warner Central Bank Governor Ewart Williams

Source: The Economist Intelligence Unit as of February 2012

Corpus Christi Day: June 7Labor Day: June 19Emancipation Day: August 1Independence Day: August 31Republic Day: September 24Divali: November 13Christmas Day: December 25Boxing Day: December 26

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B. POLITICAL STRUCTURE

Official NameRepublic of Trinidad and Tobago

Form of Government Unitary state, with some degree of regional automony for Tobago

The Executive The prime minister appoints a cabinet, which is responsible to parliamentHead of State President elected by an electoral college comprising all members of parliament, currently George Maxwell Richards

National Legislature Bicameral parliament: 41-member directly elected House of Representatives (the lower house); 31-member Senate (the upper house), comprising members nominated by the prime minister, the leader of the opposition and the president, and appointed by the president; parliament sits for five years.

Regional Legislature The Tobago House of Assembly was established in 1980 with certain powers over the island’s finances and other delegated policy, planning and administrative responsibilities; it comprises 12 elected members, in addition, six members are appointed by the majority party and one by the minority party

Legal System A full system of regional and appellate courts, with the appeals court at the apex of domestic courts; final appellate power rests with the Judicial Committee of the Privy Council in the UK

National Elections Next national election due in 2015Local government elections: last election July 2010; next election due July 2013.

Main Political Organizations Government: People’s Partnership (PP) coalition consisting of the United National Congress (UNC), Tobago Organization of the People (TOP), Congress of the People (COP), National Joint Action Cmmittee (NJAC) and the Movement for Social Justice (MSJ) Opposition: People’s National Movement (PNM)

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C. POLITICAL OUTLOOK 2012 - 2016

The main challenges facing the ruling People’s Partnership (PP) coalition over the medium term will be combating crime and kick-starting the still-weak domestic economy. The PP hailed the curfew and state of emergency (imposed between August and December 2011) as a success in combating crime. However, the measures were unpopular among the public, whose constitutional rights were temporarily suspended. The PP, whose policy stance can broadly be defined as centre-left, was elected on an anti-crime and anticorruption platform and will be able to point to the state of emergency’s success in reducing crime (the number of homicides reportedly fell by 60% during the curfew).

However, further progress will be harder to achieve over the medium term, given Trinidad and Tobago’s geographical location as a transit point for drug-traffickers, as well as the fact that a sustained reduction in crime will require reform of the police and judiciary to improve the penal system’s efficiency. The Economist Intelligence Unit does not expect the government to re-impose the state of emergency in the short term. Such a move would be hugely unpopular among businesses, whose profits were eroded, and the public, and would heighten the risk of social unrest.

Apart from security-related issues, the PP’s substantial majority (29 out of 41 parliamentary seats) means that it will face few obstacles to governability. The broad coalition consists of five parties, the United National Congress (UNC), the Congress of the People (COP), the Tobago Organization of the People (TOP) and two additional small parties and tensions between the UNC and the COP regularly spill into the public domain. The persistent risk of a rapid escalation in infighting could put this at risk and even prevent the PP from seeing out its full five-year term.

However, this does not form part of our central forecast scenario, given that the UNC holds 21 seats, making it impossible for any of the other parties to form a majority coalition without UNC defections. The centre-left People’s National Movement (PNM) opposition, which holds 12 parliamentary seats, remains weakened, as it seeks to consolidate a new leadership structure, heal internal divisions and refocus its legislative priorities.

International relations will continue to focus on developing commercial ties with gas-importing countries, particularly the US, and on combating crime and illegal drug-trafficking. In view of Trinidad and Tobago’s shared interests with Venezuela on cross-border oil and gas issues, as well as the proximity of the two countries, maintaining friendly relations will be a priority. Trinidad and Tobago will continue to play a leading role in the Caribbean Community (Caricom), in which it is the largest economy, although the largesse distributed by the former prime minister, Patrick Manning (1991-95; 2001-10), is likely to be reduced as the government seeks to rein in fiscal expenditure.


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D. ECONOMIC PERFORMANCE

Trinidad and Tobago’s commercial banking system, which comprises around 45% of the country’s financial system, has fared relatively well despite poor macroeconomic performance in recent years, according to the Central Bank’s December 2011 Financial Stability Report, released in January. The report indicates that the banking system remains stable, well capitalized and profitable, but cautions that close monitoring must continue on the quality of commercial bank loan portfolios and asset concentration. According to the Central Bank, the sizeable build-up in liquidity in the financial system resulted in a 4.5 percentage point year-on-year increase in the ratio of liquid assets to total assets, which stood at 26.8% at the end of September 2011. The ratio of non-performing loans (NPLs) to gross loans rose to 7.5% in September, from 6.8% at the end of 2010, mainly reflecting weaknesses in the high-end real estate market. Although profitability ratios were lower than in previous years, they remained strong by international standards: the return on equity (ROE) ratio fell to 16.8% in September (from 17.2% in 2010) while return on assets (ROA) held at 2.3%. The ratio of regulatory capital to risk weighted assets stood at 25.8% in September, well above the statutory minimum requirement (8%) and among the highest in Latin America and the Caribbean.

Annual consumer price inflation slowed modestly in December, ending 2011 at 5.3% (down from 5.7% in November), according to the latest data from the Central Bank. This was a marked reduction from the 2010 year-end figure of 13.4%. Inflation also slowed on a monthly basis, rising by just 0.1% in December compared to a 1.2% increase in November. As in previous months, inflation was driven mainly by fluctuations in food prices. Food prices rose by 10.9% year on year in December, a slight deceleration from the 12.3% annual increase recorded in November. During the course of 2011 food prices were volatile, declining sharply between January and August (reflecting a strong base of comparison in the same period of 2010) and rising in the latter part of the year as a result of flooding in key agricultural districts. Reflecting weak underlying demand pressures in the economy in 2011, core inflation (which excludes food prices) declined steadily throughout the year, from 2.6% in January to 1.5% in December.

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E. ECONOMIC FORECAST

Economic Growthv

The Central Bank’s most recent estimate of a 1.4% contraction in economic activity in 2011 underlines the persistent weakness of the non-energy economy. As a result we expect weak GDP growth in the early part of the forecast period (0.9% in 2012 and 2.2% in 2013), which will be driven by government stimulus programmes and the energy sector. During this time, the gloomy outlook for the global economy and subdued domestic demand will continue to weigh on non-energy activity. The gradually improving outlook for the US, Trinidad and Tobago’s main trade partner, is a positive, but US demand for the country’s exports will remain below pre-2008 levels. We expect growth to pick up more rapidly in the latter part of the forecast period as external conditions stabilize, and as forecast prices for natural gas approach their pre-2008 highs, leading to greater investment in downstream projects and an expansion in overall economic activity. Our baseline scenario assumes that growth will be supported by a gradual recovery in domestic economic activity (which will in turn be supported by a programme of government investment in infrastructure in 2012-13), and that external shocks do not spark a sharper than forecast fall in oil prices or a fall in gas prices.

Private consumption will remain weak in the early part of the forecast period compared with the energy boom years (2004-08), owing to persistent problems such as consumer caution, high unemployment by domestic standards and a slow recovery in consumer credit. We expect stronger rates of growth from 2014 onwards. Owing to financing constraints,


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public consumption growth will be moderate and will not return to pre-2007 growth rates in 2012-16. A pick-up in public investment, combined with renewed downstream energy-sector activity and a greater focus on infrastructure, will lead to a gradual acceleration in gross fixed investment in 2012-14. This will gain momentum from 2015 as rising gas prices promote stronger energy-sector investment. We expect overall export volume growth to accelerate in line with more benign global conditions. A modest recovery in investment and consumption will prompt real imports to rise by an average 6.6% in 2012-16.On the supply side, industrial production growth is forecast to remain relatively modest in 2012-14, reflecting the continued frailty of demand for natural gas relative to pre-recession levels. We expect external demand to pick up towards the end of the forecast period. Manufacturing output will pick up gradually, but remains constrained by weak demand from the English-speaking Caribbean (an important export market). Although output from the construction sector, a strong driver of growth in recent years, has been weak since 2010, a recovery is expected as government projects, such as the construction of a new highway from San Fernando to Point Fortin, accelerate. The services sector is expected to post positive (albeit mild) growth in 2012-16, as a result of a modest recovery in household demand.

Inflation

Like many Caribbean countries, Trinidad and Tobago is exposed to supply-side inflationary pressures, owing to global commodity price volatility (although its abundant energy reserves protect it from energy price fluctuations). We expect easing forecast commodity prices in 2012-13 and subdued domestic demand to keep inflationary pressures mild by historical standards (at around 5%). In 2013- 16

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increasing demand-side pressures and moderate price increases of key commodities, such as food which makes up a large proportion of the consumer prices index, will push inflation up to an average of 6%. This is based on the assumption that there are no weather-related shocks, which would have an adverse effect on food prices in the remainder of the forecast period and could cause inflation to overshoot.

Exchange Rates

A strong reserves position, underpinned by foreign-exchange inflows from the energy sector, will allow the Central Bank to maintain the exchange rate at close to TT$6.5:US$1 in 2012-13 (it has been quasi-pegged at close to this rate for over a decade). We do not envisage any changes in exchange-rate policy, such a move would rattle confidence and in the medium term would prompt volatility, given the inconsistent nature of foreign-currency flows in a relatively small economy (with multinationals injecting large quantities of foreign exchange into the economy in individual payments).

Despite inflationary pressures easing relative to recent years, we expect the Trinidadian dollar to appreciate moderately in real terms in 2012-16, given that domestic inflation will remain higher than that of the country’s main trade partners. This will continue to have an adverse effect on the competitiveness of non-energy, tradeable activities.

External Sector

Trinidad and Tobago’s terms of trade will remain favorable by historical standards. We expect the current-account surplus to narrow in 2012-13 (from an estimated 17.6% of GDP in 2011, to around 15% of GDP in 2012), as export revenue drops off in line with easing oil prices and weakening external demand for oil and gas. However, oil prices are still expected to be firm and, combined with gradually rising gas prices (which will nonetheless remain around 40% below their 2005-08 average), will provide some support to the trade balance in 2012-13.

Rising forecast prices for natural gas in the latter part of the outlook period will push the current-account surplus up to an average of over 18% of GDP in 2014-16. The surplus on the services account will average around 1.6% of GDP in 2012-16, as freight costs are offset by moderate inflows from tourism. The income deficit will widen in nominal terms in, following the recovery of outward profit remittances but will fall as a percentage of GDP. Current transfers will remain negligible, reflecting the low proportion of migrant workers. International reserves will rise in nominal terms, to almostUS$11bn by 2016, and weak gains in import spending, owing to low domestic demand, will see import cover rise to around 13 months, which is high compared with other Caribbean countries.


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BANKING SYSTEM

A. BANKS IN TRINIDAD & TOBAGO

Today there are eight commercial banks operating in Trinidad & Tobago. Some domestic banks retain affiliation with their foreign counterparts and all offer a complete range of commercial banking and related services. All the commercial banks have SWIFT access.

The Central Bank of Trinidad & Tobago is the exclusive monetary agent for the government. It is solely responsible for issuing local currency and regulating the money supply. It establishes the policies governing operations of the commercial banking system and non-banking financial institutions.

As of April 2011:

Commercial Banks

Citibank (Trinidad &Tobago) Limited First Citizens Bank Limited Intercommercial Bank Limited Republic Bank Limited Scotiabank Trinidad and Tobago Limited Royal Bank of Canada (formerly RBTT Bank Limited) Bank of Baroda First Caribbean International Bank

Significant Update to local Banking Sector- RBTT Bank Ltd

A subsidiary of RBC Financial Holdings Limited, RBTT Bank Limited was one of the largest commercial banking corporations in the Caribbean region with a group asset base of over US$6.2 billion dollars. The RBTT group of companies operated several commercial banking businesses in other neighbouring islands, as well as investment holdings in various parts of the Trinidad and Tobago economy. On March 26th 2008, RBTT Shareholders voted 98.18 percent in favour of selling the bank to the Royal Bank of Canada (RBC), who previously had divested the bank in 1987. On 16 June 2008, RBC completed the acquisition. RBTT Financial Holdings Limited and RBC Holdings (Trinidad & Tobago) Limited, a subsidiary of RBC, will amalgamate and continue as a wholly owned indirect subsidiary of RBC. The head office of the Caribbean operations for RBC will be located at Port of Spain, the capital of Trinidad and Tobago, and the site of RBTT’s headquarters.


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Financial Institutions doing business of a financial nature (Non-Bank FIs)

AIC Finance Limited ANSA Merchant Bank Limited Caribbean Finance Company Limited Citicorp Merchant Bank Limited CLICO Investment Bank Limited Development Finance Limited Fidelity Finance & Leasing Co. Limited First Caribbean International Banking and Financial Corporation First Citizens Asset Management Limited General Finance Corporation Limited Guardian Asset Management Limited Intercommercial Trust and Merchant Bank Limited Island Finance Trinidad & Tobago Limited Republic Finance & Merchant Bank Limited RBC Merchant Bank Limited RBC Trust Limited Scotiatrust and Merchant Bank Trinidad and Tobago Limited

B. MAJOR NATIONAL BANKING LAWS

In April 1993 the existing regime of Exchange Control Laws was dismantled and the Trinidad & Tobago dollar was allowed to float within the context of an inter-bank market.

General Banking LawsOn December 19th 2008, the Financial Institutions Act (“FIA 2008”) became law and replaced the FIA Act of 1993. The general objectives of this piece of legislation include:

• Enhanced oversight of Financial Institutions • To strengthen corporate governance of Financial Institutions• Promote early detection of risks to Financial Institutions, its depositors and the Trinidad & Tobago financial system and to facilitate prompt corrective action• To deter contraventions of the Act by the imposition of criminal penalties and fines more relevant to the 21st Century.

Further details on the FIA Act 2008 can be found on http://www.ttparliament.org/publications

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C. CITIBANK IN TRINIDAD & TOBAGO

Citibank (Trinidad & Tobago) Ltd is a full-fledged Corporate and Commercial Bank that has been serving clients with World-Class services since 1965. Our client base consists of several large and medium-sized corporations stemming from several sectors including but not limited to Oil & Gas, Telecommunications, Financial Services and the Manufacturing Sector. The bank is a wholly owned subsidiary of Citibank N.A. and has two branches; one located in San Fernando and its Head Office located in Port of Spain. The bank offers a complete package of banking services including:

• Local and International Cash Management• Corporate Finance • Project Finance• Loans• Foreign Exchange Services • Derivatives• Trade Finance and Trade ServicesToday, Citi (Trinidad & Tobago) Limited manages and supports 22 branched and non-branched countries within the Caribbean. These include:

Branched Countries1. Bahamas2. Barbados3. Trinidad and TobagoNon-Branched Countries4. Guyana5. Suriname6. Aruba 7. Curacao8. Bonaire9. Dominica10. St. Kitts11. Nevis12. Anguilla13. British Virgin Islands14. Turks & Caicos Islands15. Cayman Islands16. Belize17. St. Lucia18. Grenada19. St. VincentCiticorp Merchant Bank in Trinidad also offers a variety of complementary services, including:underwriting, bond trading etc

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A. LOCAL CLEARINGHOUSE

The Trinidad & Tobago Automated Clearing House system (“ACH”) began operations in October 2005 and is jointly owned by the six commercial banks and the Central bank of Trinidad and Tobago. The system facilitates the electronic processing of high volume, low value transactions (value of less than $500,000 TTD) and is operated by the Trinidad and Tobago Interbank Payment Systems (“TTIPS”). The ACH facilitates the processing of both electronic payment and collection transactions. There also exists a Real-time Gross Settlement System (“RTGS”) which is managed by the Central Bank and processes high value, low volume time sensitive transactions.

All cheques are cleared manually through the Central Bank of Trinidad & Tobago.

B. FUNDS AVAILABILITY SCHEDULE

• All Cheques are settled in 4 days• ACH transactions are generally settled within 2 working days with the exception of electronic collection transactions which are settled within 4 working days. This 4 day clearing window for collections has been installed as a temporary measure to accommodate the upgrade of other bank’s systems to process rejected items. It is estimated that the settlement window will revert to 2 working days in July 2011.• Daily there are two settlement windows, one at 9:00am and the other at 2:00pm• RTGS transactions are settled immediately.• Banking Hours in general are:• 9AM - 2 PM (Monday - Thursday)• 9AM - 12PM and 3PM - 5 PM (Friday)

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A. CURRENT FOREIGN EXCHANGE CONTROL POLICY

Only six commercial banks and the Central Bank of Trinidad & Tobago comprise the local clearing system. These include Citibank (Trinidad & Tobago) Ltd, Royal Bank of Canada, Scotiabank, First Citizens Bank, Intercommercial Bank Ltd and Republic Bank Ltd. No other financial institution is authorized to clear items. Each item is posted separately.The Trinidad Government abolished exchange controls on April 13, 1993. Any local company can operate a foreign account at a commercial bank.

B. HISTORICAL BACKGROUND

In 1993 the Trinidad and Tobago Dollar was floated with all foreign exchange controls being abolished. The Central Bank of Trinidad has introduced local Foreign Exchange mechanisms in collaboration with the Commercial Banks that include:

• The US$ inflows in Trinidad is derived primarily from the Oil and Gas Sector from their conversions for local Taxes. • To address the distribution of Foreign Exchange flows and reduce exchange rate volatility a Primary Tier sharing arrangement was implemented. • Fundamental changes in the demand and supply patterns in the local foreign exchange market have primarily dictated the Central Bank’s intervention policy.• The Central Bank has stipulated that authorized dealers will sell US$ to the public at no more than maximum spread of 1%

C. FORWARD MARKET

The local market is relatively active with respect to forward trades, both on the bid and asks for both corporate and financial institution counterparties. However due to a small interest differential in recent times, forwards have not been a viable option to clients.

D. CURRENT DATA

• The US$ exchange rate in Trinidad has moved between 6.4275 and 6.4334 year to date 2011.• The Central Bank has intervened in the local market with US$ 475MM year to date compared to US$ 395MM with the same period 2010. The US$ dollar exchange rate on the Central Bank intervention has moved from between 6.4001 to the current 6.4034 level.

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• System public purchases for 2011: Year to date: US$ 1.16 billion and Public Sales year to date: US$ 1.68 billion. This is compared to Public Purchases of S 1.2 billion and Public Sales of US$ 1.7 billion for the same period 2010.

E. FORECASTS-2012

• Based on the current levels of Foreign Reserves and a commitment by the Central Bank to aid the system with liquidity access and also current International Oil and Gas prices, we forecast a continued flow of US$ dollars on a quarterly basis to facilitate customer flow demand.• Based on current rates we anticipate no significant change in exchange rates in the short term. On a longer term view, based on current information we do not forecast a more than 2 cent move in the rate from the current level of 6.4334.

F. TAXES

The taxation regime in Trinidad & Tobago comprises a variety of taxes including both direct and indirect taxes. Please note that the information contained herein may change. Persons contemplating doing business in Trinidad and Tobago should seek legal advice with regard to proposed or contemplated ventures.

In Trinidad & Tobago, the principal direct taxes are:

Corporation Tax

A tax rate of 25% on profits and short term gains of companies accruing in Trinidad & Tobago and includes a business levy (Corporation Tax Act).

Income Tax

A tax of 25% on chargeable income of individuals accruing in Trinidad & Tobago.

Unemployment Levy

A tax at the rate of 5% on the profits of companies subject to the Petroleum Taxes Act. (Unemployment Levy Act).

Business Levy

A tax on gross revenue at rate of 0.2% payable quarterly. Final liability is offset by corporation tax payable at year-end.


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Green Fund Levy

A tax on gross revenue at the rate of 0.1% payable quarterly.

Health Surcharge

A tax levied at two rates based on income.

Petroleum Profits Tax

A tax at the rate of 50% on the profits earned by businesses in the course of petroleum operations falling under the Petroleum Taxes Act.

Supplemental Petroleum Tax

A tax charged on the gross income of companies liable to petroleum profits tax based on the price of oil.

Lands and Buildings Taxes

A tax based on the assessed value of lands and buildings.

Withholding Taxes

A tax based on various income payments to non-residents. (Double Taxation Treaties).

The principal indirect taxes are:

Value Added Tax (VAT)

A tax levied on imports and on the value of supplies of goods and services. (VAT Act).

Customs and Excise Duties

A tax on imports and manufactured goods. (Customs Act).

Import Surcharge: A tax on imports.

Stamp Duty

A tax on instruments such as deeds of lease, conveyances, mortgages and share transfers. (Stamp Duty Act).

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A tax at the rate of 15% on financial transactions with banks and other financial institutions.

Motor Vehicles Tax

A tax levied on the sale of motor vehicles.

Taxation of Non-Resident Companies

A non-resident company is liable to corporation tax on income arising or derived from any trade or business carried on by it in Trinidad and Tobago. Additionally withholding tax is levied on (a) remittances in respect of Trinidad source income of a non trading nature earned by non-resident companies and (b) profits of branches of non resident companies (after making deductions for corporation tax) which are not re-invested (other than in replacement of fixed assets) to the satisfaction of the Revenue. A corporation is considered to be resident where its “mind or management” is ordinarily situated.

Taxable Sources for Corporation Tax

The following revenues are included: Income from sources derived in or accruing in Trinidad & Tobago or elsewhere and whether received in Trinidad & Tobago or not in respect of gains and profits from farming, fishing, operation of mines or other natural resources, trade or business, professions, vocations or management charges, royalties, rents, interests, discounts, annual payments, fees, commissions, distributions, short term capital gains.

Applicable Tax Rates

The tax rate for companies is generally 25% of the chargeable profits of the company. The rate is 35% for companies engaged in liquefaction of natural gas, manufacture of petrochemicals and transmission and distribution of natural gas and wholesale marketing and distribution of petroleum products. Petroleum profits tax is levied at 50%.

Withholding Tax Rates

Dividends to individuals: 15%Dividends to companies: 15% but 10% to a parent companyRoyalties to individuals and to companies: 20%Interest to individuals, companies and banks: 20%Some of the existing double taxation treaties provide rates of up to 30%. In such situations, the domestic lower statutory, 20% rates, will be applied.


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Trinidad and Tobago is a party to a number of trade agreements with various countries. It is a member of the Caribbean Community (CARICOM), the North American Free Trade Area (NAFTA), the World Trade Organization, the International Monetary Fund, the World Bank, the Inter-American Development Bank, and has privileged access to all its major markets.

A. REGIONAL TRADE ASSOCIATIONS

Caribbean Community (CARICOM)

In 1972, Commonwealth Caribbean leaders at the Seventh Heads of Government Conference decided to transform the Caribbean Free Trade Association (CARIFTA) into a Common Market and establish the Caribbean Community, of which the Common Market would be an integral part. The signing of the Treaty establishing the Caribbean Community, Chaguaramas, 4th July 1973, was a defining moment in the history of the Commonwealth Caribbean. Although a free-trade area had been established, CARIFTA did not provide for the free movement of labor and capital, or the coordination of agricultural, industrial and foreign policies. The objectives of the Community, identified in Article 6 of the Revised Treaty, are: to improve standards of living and work; the full employment of labor and other factors of production; accelerated, coordinated and sustained economic development and convergence; expansion of trade and economic relations with third States; enhanced levels of international competitiveness; organization for increased production and productivity; achievement of a greater measure of economic leverage and effectiveness of Member States in dealing with third States, groups of States and entities of any description and the enhanced co-ordination of Member States’ foreign and foreign economic policies and enhanced functional co-operation.

Dominican Republic

Agreement establishing the Free Trade Area between CARICOM and the Dominican Republic: The Protocol, together with the Framework Agreement constitute the most ambitious and wide-ranging bilateral trade agreement concluded by CARICOM, specifying tariff treatment which would be extended to every category of goods that would be traded between CARICOM and the Dominican Republic. It is estimated that more than 85% of the trade between CARICOM and the Dominican Republic would now be free of duty and of quantitative restrictions. The Protocol also sets out the Rules of Origin for each tariff heading of goods, provides an agreed timetable for negotiating a Trade in Services regime and commits the Parties to doing the same for Reciprocal Promotion and Protection of Investment and for Government Procurement, making special provision for the Temporary Entry of business persons into the countries of the Contracting Parties. Although the

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Protocol has been signed, there still remains to be resolved the treatment to be extended to aerated beverages - from Trinidad and Tobago in particular - entering the market of the Dominican Republic. In remarks after the signing, both the Foreign Minister of the Dominican Republic and the CARICOM Secretary-General called on their respective private sectors to strive to take advantage of the opportunities provided by the agreement.

Cuba

The CARICOM-Cuba Trade and Economic Cooperation Agreement was signed on 5 July 2000. The objective of this agreement is to strengthen the commercial and economic relations between the Parties through the promotion and expansion of trade in goods and services, free access to markets, elimination of non-tariff barriers to trade, the establishment of a system of rules of origin, and harmonization of technical and sanitary measures.

Venezuela

Agreement between CARICOM and the Government of the Republic of Venezuela on Trade and Investment:CARICOM and the Government of the Republic of Venezuela entered into agreement in 1993. The fundamental objective of this Agreement is to strengthen the economic and trade relations between the Parties through:(a) The promotion and expansion of the sale of goods originating in CARICOM through, inter alia, one-way duty-free access to the Venezuelan market.(b) The stimulation of investments aimed at taking advantage of the markets of the Parties and strengthening their competitiveness in world trade.(c) The facilitation of the creation and operation of regional joint ventures.(d) The encouragement of mechanisms for the promotion and protection of investments by nationals of the Parties.

Columbia

Agreement on Trade, Economic and Technical Cooperation between CARICOM and the Government of the Republic of Colombia. This Agreement aims to strengthen the trade, economic relations and technical cooperation between the Parties through:(a) The promotion and expansion of the sale of goods originating in CARICOM and Colombia with particular emphasis on exports from CARICOM states in the early stages of the implementation of this Agreement.(b) The promotion and protection of investments aimed at taking advantage of the markets of the Parties and the strengthening of their global competitiveness.(c) The facilitation of the creation and operation of regional joint ventures.(d) The development of technical and scientific cooperation activities which may be agreed upon

ACP-EU Negotiations

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The ACP-EU Partnership Agreement between the European Union (EU) and the African, Caribbean and Pacific States (ACP), known as the Cotonou Agreement, was signed on June 23, 2000 in Cotonou, Benin. This Agreement replaces the former Lome Agreement which was a one way preferential trade agreement. The Agreement is based on five (5) inter-dependent pillars namely, a political dimension, the promotion of a participatory approach, a strengthened focus on poverty reduction, a new framework for economic and trade cooperation and a reform of financial cooperation. Although the Agreement places emphasis on poverty eradication and sustainable development, it focuses to a large extent on trade in goods. The Agreement stipulates a specific plan of action for establishing reciprocal Economic Partnership Agreements (EPA’s) between the EU and ACP States. Negotiations for determining the framework of these EPA’s were concluded on September 27 2002. The EU obtained a waiver from the WTO in order to continue to operate the one-way preferential scheme of Lome until December 31, 2007.

Caribbean Basin Initiative (CBI)

The trade programmes known collectively as the Caribbean Basin Initiative (CBI) remain a vital element in the United States’ economic relations with its neighbors in Central America and the Caribbean.The CBI is intended to facilitate the economic development and export diversification of the Caribbean Basin economies. Initially launched in 1983 through the Caribbean Basin Economic Recovery Act (CBERA), and substantially expanded in 2000 through the US - Caribbean Basin Trade Partnership Act (CBTPA), the CBI currently provides twenty-four (24) beneficiary countries with duty-free access to the US market for most goods.CBTPA entered into force on October 1, 2000 and continues in effect until the FTAA or another free trade agreement as described in legislation enters into force between the United States and a CBTPA beneficiary country. There are currently twenty-four (24) countries that benefit from the CBI programme and, therefore, may potentially benefit from CBTPA. These countries are: Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat, Netherlands Antilles, Nicaragua, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.

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INVESTMENT OPPORTUNITIES

The objective of cash management investment opportunities is to offer the customer a variety of instruments with which to manage short-term excess liquidity.

List of investment opportunities offered:• Overdraft Structured Investments• Term Loans• Bonds• Lease Sub-Lease Financing (LSF) • Securitized Gott Float. Rate Debt (SELGS)• Zero Coupon Notes ( ZCNs)

We also provide a range of structured products tailor-made to optimize individual client needs.

A. SWEEPS

Sweeps for both local TT and USD accounts are not available in Trinidad.

B. CERTIFICATE OF DEPOSITS

Certificate of Deposits (“CD’s”) are available in LCY and USD; they function similarly to Time Deposits, and are non transferable.

C. TIME DEPOSITS

Time deposits are available in both local and US dollars. The bank issues a certificate for the investment, and ownership is non-transferable after issuance. The product is managed by the bank treasurer. Time deposits have a minimum day of 30 days, although via repurchase agreements they can be made for terms as short as one day. Deposits in TT are available up to 365 day terms, however, most deposits are concentrated in 30-day terms.

The reserve requirement is 11% plus 2% special reserve on all local currency deposits. US deposits are exempt from reserve requirements.

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INVESTMENT OPPORTUNITIES

D. TREASURY BILLS

T-bills are placed by the Central Bank, which also creates the OTC market. The terms range from 90 to 180 days, and at the end of each term there is a new issue. Both public and private financial institutions must purchase T-Bills directly from the Central Bank.

E. STOCK MARKET

http://www.stockex.co.tt/index.phpThere is one stock exchange- Trinidad and Tobago Stock Exchange

Computer trading

The Trinidad & Tobago Central Depository (TTCD) is a company established by the Trinidad and Tobago Stock Exchange Limited to enable investors buying and selling securities on the Exchange to settle such transactions through a computerized book entry system.

Instruments traded

Equities, fixed income securities

Companies listed

Presently, there are some thirty six (37) companies listed on the Main Board of the Stock Exchange, two (2) companies are listed on the Second Tier Market and three (3) in the Mutual Fund Market. The listed members comprise of companies from various sectors including Banking, Manufacturing, Trading etc.


537

CITI SOLUTIONS AND SERVICES

Cash Management Services in Trinidad & Tobago

A. GENERAL BUSINESS TERMS AND CONDITIONS

In Trinidad, payment terms are usually net 30 days, rarely more than 60 days. From an accounting standpoint, payments over 90 days are considered doubtful debts. Almost all supplier payments are made via check or electronic credit to a bank account. Most payments are picked up by the supplier’s messenger, although some companies use couriers and a few use the mailing service to send payments. Most companies pay 30 days after receiving an invoice. Discounts on payments are unusual, but not unheard of. If a discount is offered, it usually ranges from 4-9% of invoice total. Most companies do not offer discounts for early payments, and may charge late payment penalties for habitually delinquent accounts. Mail is not a reliable source of collection. Mail float is approximately two or more days within an urban area, at least seven days between cities and up to ten days from a rural area to the city. Most banks collect in Trinidad & Tobago by electronic funds transfer, direct payment, and/or collections system.

Checks: Checks drawn on a current account must include date, location where drawn, names of drawer and drawee, amount (numeric and written), and signature of drawer. The holding period for local currency checks is 4 days from date of deposit, and for foreign currency checks it is 30 days.

Taxes: All banking services are subject to a 15% government tax.

B. CITIBANK’S ACCOUNT SERVICES SOLUTION IN TRINIDAD & TOBAGO

Both residents and non-residents can hold accounts either in local or US currency and may be either a savings or a chequing account

Local Currency

• Interest is paid depending on market conditions. Minimum balance requirements vary for payment of interest • Overdraft facilities are available and are subject to credit approval.

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USD Currency

• Interest is paid depending on market conditions. Minimum balance requirements vary for payment of interest • Overdraft facilities are available and are subject to credit approval.• Local US cheques are intended to clear locally. Purchase of bank drafts is necessary in order to clear internationally

Documentation Requirements

All documentation for account opening must be in English. Certified copies of constitutive and incorporation documents are required and identification and proof of address documents of all signatories must be obtained. In addition there are specific Citibank documents which are required to be signed.

C. CITIBANKS PAYMENTS SOLUTIONS IN TRINIDAD & TOBAGO

Note: Please refer to the Appendix 1 for a complete description of services marked by *Cross Border PaymentsWorldLink *Local PaymentsCitibank PayLink *

D. CITIBANK’S COLLECTIONS SOLUTIONS IN TRINIDAD & TOBAGO

Cross-Border Collections (Funds Transfers)

International incoming funds transfers may be received in any major international currency or US dollars. The value date for fund transfers is same day if received before 2:00pm local time.

Local Collections (Funds Transfers)

Collections Domestic incoming funds transfers may be received in USD or other major international currencies. Credits transactions to account received before 2:00pm receive same day value.

SpeedCollect & Direct Debits*


539


E. DELIVERY SYSTEMS AVAILABLE

International Delivery Systems:

SWIFTLocal Address: CITITTPSNY Address: CITIUS33Messages time limits: NONEMessage types accepted: MT 103, 202

CitiDirect is available 24/7 in order to view account information. Transactions may be initiated via the electronic banking systems.

F. SUPPLY CHAIN FINANCE

Citi Supplier Finance solutions based on Payment Services Agreement signed with Buyers are transaction structures consisting of (i) an electronic disbursement service provided to the payables and procurement departments of clients of Citibank (“Buyers”), and (ii) a receivables purchase / discount service that enables the early financing of the payment to beneficiaries (“Suppliers”) through a receivables purchase / discount arrangement.

G. EXPORT AGENCY & FINANCE (EAF)

Citibank through its offices in New York and other major cities around the world partners with bilateral and multinational agencies to provide financing for large infrastructural projects. This type of financing is another option to the bank and capital markets and is able to provide long tenors and lower pricing than the other markets.

Trade Services Products

a. Documentary / Trade Letters of Credit

Import letters of credit – Issue letters of credit to importers within the Trinidad Hub both on a sight and an acceptance basis.

Export letters of credit – Advising and / or confirmation of letters of credit for exporters within the Trinidad Hub both on a sight and an acceptance basis.

b. Collections Services

Import collections services

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Export collections services

c. Standby Letters of Credit / Guarantees

Financial guarantees issued on behalf of applicants within the Trinidad Hub such as customs bonds, immigration bonds, advance payment bonds, insurance guarantees, protective standby letters of credit etc.

Performance guarantees issued on behalf of applicants within the Trinidad Hub such as performance bonds required on contracts and other performance type guarantees.

Trade Finance Products

Loans to importers within the Trinidad Hub to finance the import of merchandise or . These loans carry a maximum tenor of 1 year.

Loans to exporters within the Trinidad Hub to finance the production of merchandise for export. These loans carry a maximum tenor of 1 year.

Any other short term loan (< 1 year) required for funding any part of the merchandise production, sale, storage or shipping stages.


541

MARKET GUIDE FOR TREASURY

Allowed —No mate-rialrestrictions

Operating Accounts1,2 Non-Residents ResidentsOnshore local currencyOnshore foreign currencyOffshore local currency Offshore foreign currency

Overdrafts Non-Residents ResidentsOnshore local currencyOnshore foreign currency

Interest-Bearing Accounts1 Non-Residents Residents Onshore local currency operating accountsOnshore foreign currency operating accounts

Time Deposits2 Non-Residents ResidentsOnshore local currencyOnshore foreign currency

Domestic Notional Pooling3 Non-Residents ResidentsOnshore local currencyOnshore foreign currency

Inter-company Lending6 Non-Resident to Resident Resident to Non-residentOnshore local currencyOnshore foreign currency

Non-Residents ResidentsOnshore local currencyOnshore foreign currency

FX Convertibility/Transferability• Local currency is freely convertible domestic and offshore.

Tax and Transfer Pricing Considerations• Transactions may be subject to VAT and Arms-length transfer pricing is recommended for any intercompany arrangement. Please see www.ird.gov.tt

For more information, please visit www.transactionservices.citi.com.

Allowed —Straightfor-wardregulations,approval orlicense

Allowed —Challengingregulatoryapproval orlicense

Allowed —Subject to acomplex setof rules

StrictlyProhibited

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MARKET GUIDE FOR TREASURY

Notes:1 For Residents, there is no withholding tax for TT$ or local US$ accounts. For Non- Residents, withholding tax is deducted where entity is Non-Resident outside or incorporated outside Trinidad and Tobago.2 For Residents, there is no withholding tax for TT$ or local US$ accounts. For Non- Residents, withholding tax is deducted where entity is Non-Resident outside or incorporated outside Trinidad and Tobago.3 No notional pooling for TT$ or local US$ accounts is currently offered by CTTL.


543

CONTACT INFORMATION

Sales Heads

Industry Sector Heads

Carolina JuanTreasury and Trade Solutions Client Sales ManagementLatin America & Mexico HeadCiti Transaction ServicesEmail: [email protected]: + 57 (316) 743 - 9347Of. Phone: +57 (1) 639 - 4026

Industrials SectorInes Vargas BarreraEmail: [email protected]: +52 (181) 8366 - 5190Of. Phone: +52 (81) 1226 - 8525

Branding, Consumer and Healthcare SectorOscar MazzaEmail: [email protected]: +1 (305) 588 - 9396Of. Phone: +1 (305) 347 - 1336

Technology, Media and Telecom SectorGabriel KirestianEmail: [email protected]: +54 (911) 3301 - 4826Of. Phone: +54 (11) 4329 - 1516

Energy, Power and Chemicals SectorPeter LangshawEmail: [email protected]: +55 (11) 6183 - 6958Of. Phone: +55 (11) 6183 - 6958

Public SectorJorg PaascheEmail: [email protected]: +52 (1) 55 5453 - 0103Of. Phone: +52 (55) 2226 - 6020Based: Mexico DF, Mexico

Non Bank FI Sector (NFBI)Ricardo DessyEmail: [email protected]: +54 (911) 6641 - 9752Of. Phone: +54 (11) 4329 - 1471Based: Buenos Aires, Argentina

BrazilAdoniro CestariEmail: [email protected]: +55 (11) 7130 - 9447Of. Phone: +55 (11) 4009 - 7838Based: Sao Paulo, Brazil

Central AmericaEvelin MadridEmail: [email protected]: + 506 8701 - 4529Of. Phone: +506 2588 - 7541Based: San Jose, Costa Rica

MexicoMiguel YtuarteEmail: [email protected]: +52 (1) 55 4088 - 2284Of. Phone: +5255 (1226) 8895Based: Mexico DF, Mexico

Andean RegionCarolina JuanEmail: [email protected]: + 57 (316) 743 - 9347Of. Phone: +57 (1) 639 - 4026Based: Bogota, Colombia

ArgentinaAdrian ScosceiraEmail: [email protected]: +54 (911) 5674 - 6966Of. Phone: +54 (11) 4329 - 1194Based: Buenos Aires, Argentina

Citi Transaction Serviceswww.transactionservices.citi.com

© 2012 Citibank, N.A. All rights reserved. Citi and Arc Design is a trademark and service mark of Citigroup Inc., used and registered throughout the world. All other trademarks are the property of their respective owners.

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