Euro Pacific Bank

Bank Operations Update: August 1, 2022

Prior to the suspension, Euro Pacific Bank was in the process of being acquired by a larger financial institution. Instead of allowing the sale, regulators placed the bank into receivership. Further, despite multiple offers to buy the bank, regulators have decided that the bank must be liquidated.

As a result, we proposed a plan to allow customers a period to withdraw their funds, or allow their funds to be transferred to another bank outside of Puerto Rico. We have already selected a bank that we think is best positioned to offer excellent services to our customers.

Unfortunately, we are still waiting for approval from the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF), and it’s taking a lot longer than we expected for them to complete this process.

We understand many of you are looking for a clearer timeline. At the same time, we are required to follow the financial regulatory authority’s lead. Thank you for your continued patience and understanding.

Summary:

  • The Puerto Rico financial regulator in late-June requested that Euro Pacific Bank pause its operations. In response, we complied by pausing all transactions to review the details of their request. In the meantime, a trustee has been appointed to administer the standard affairs of the bank to assure safekeeping and preservation of funds.
  • After the regulatory hearing scheduled on July 14th, Euro Pacific Bank and the Puerto Rico financial regulator entered negotiations for the continuation of bank operations.
  • We can confirm that we are now in advanced discussions with the regulator, and we will share with you results as soon as it is permitted.
  • As usual, Euro Pacific Bank maintains a full-reserve ratio, meaning we make no loans and keep all client deposits on-demand.

Bank Operations Update: July 25, 2022

As you may be aware, after the regulatory hearing scheduled on July 14th, Euro Pacific Bank and the Puerto Rico financial regulator entered negotiations for the continuation of bank operations.

We can confirm that we are now in advanced discussions with the regulator, and we will share with you results as soon as it is permitted.

Again, if you are not aware, the Puerto Rico financial regulator recently requested that Euro Pacific Bank pause its operations. In response, we complied by pausing all transactions to review the details of their request. In the meantime, a trustee has been appointed to administer the standard affairs of the bank to assure safekeeping and preservation of funds.

We appreciate your patience through this process, and as usual, Euro Pacific Bank maintains a full-reserve ratio, meaning we make no loans and keep all client deposits on-demand.

General Data Protection Regulation (GDPR)

What is the GDPR?

The EU General Data Protection Regulation (“GDPR”) comes into force across the European Union on May 25, 2018 and brings with it the most significant changes to data protection law in two decades. The primary goal of these changes is protection of personal data and rights, while meeting the requirements of the digital age.

The 21st century brings with it, the broad use of technology, new definitions of what constitutes personal data, and a vast increase in cross-border processing. The new Regulation aims to standardize data protection laws and processing of personal data, affording individuals stronger, more consistent rights to access and control their personal information.

Our Commitment

Euro Pacific Bank (EPB) (‘we’ or ‘us’ or ‘our’) is fully committed to upholding the privacy and rights of our customers, including:

  • Ensuring the security and protection of personal information that we process
  • Providing a compliant and consistent approach to data protection
  • Developing a data protection regime that is effective, fit for purpose, and demonstrates an understanding of, and appreciation for the new Regulation

We have always had a robust and effective data protection framework in place which complies with existing law and abides by the data protection principles. However, we recognize the requirement and importance of updating and expanding this program to meet the demands of the GDPR and the UK’s Data Protection Bill.

Our preparation plans for the GDPR have been summarized in this statement and includes the development and implementation of new data protection roles, policies, procedures, controls and measures to ensure maximum compliance at all times.

Frequently Asked Questions

When does the GDPR come into force?
The GDPR comes into force across the EU on the 25th May 2018 where it will replace the current data protection rules in each EU country.

What information does the GDPR apply to?
The GDPR applies to ‘personal data’, which means any information relating to an identifiable person who can be directly or indirectly identified in particular by reference to a specific data point (ex. name, ID number, etc.).

Does the GDPR only apply to EU organizations?
The GDPR applies to processing carried out by organizations operating within the EU. It also applies to organizations outside the EU that offer goods or services to individuals in the EU.

Who does the GDPR apply to?
The GDPR applies to ‘controllers’ ‘joint controllers’ and ‘processors’ of personal data. A controller determines the purposes and means of processing personal data (see Article 24 of GDPR). A joint controller shares pre-agreed responsibilities with another controller (see Article 26 of GDPR). A processor is responsible for processing personal data on behalf of a controller (see Article 28 of GDPR).

How is processing defined?
The GDPR definition of ‘processing’ means any operation or set of operations which is performed on personal data or on sets of personal data, whether or not by automated means, such as collection, recording, organisation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restriction, erasure or destruction.

Will Consent be covered in the Terms & Conditions?
No, it is no longer satisfactory to have consent bundled into another document or agreement. It needs to be explicit and unambiguous, and recordable.

What data protection policies and procedures are required under GDPR?
The key data protection policies and procedures under GDPR include:

  • Data Protection Policy
  • Subject Access Request Policy
  • Breach Management Policy
  • Privacy Policy
  • Data Retention Policies
  • IT Policy (usage of IT equipment)

Where can I find the EPB Privacy Policy?
The EPB Privacy Policy can be found on our website along with our Cookies Policy for the EPB website use.

Common Reporting Standard (CRS)

The Common Reporting Standard (CRS), calls on countries to obtain information from their financial institutions and exchange that information with other countries automatically on an annual basis. The CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

Euro Pacific Bank and its subsidiaries have the obligation to comply with the Organization for Economic Co-operation and Development (OECD) Common Reporting Standard (CRS).

To whom is the information reported:

  • For accounts held by Euro Pacific Securities, Inc. (Global Trading), the required information will be reported to Financial Services Commission (FSC) of the British Virgin Islands.
  • For accounts held by Euro Pacific Bank Inc.., there is no reporting since the United States and Puerto Rico are non-participating jurisdictions.

When will reporting take place and for what timeframe:

  • For accounts held by Euro Pacific Securities, Inc. (Global Trading), the information will be reported for the first time in May 2018 for new accounts opened in the period of November 20th to December 30th 2017

For further information on the Common Reporting Standard you may access the OECD informative website at http://www.oecd.org/tax/automatic-exchange/common-reporting-standard

What is an economic purpose?

An economic purpose is the original reason for your incoming or outgoing payment:

  • What product or service did the sender buy from you?
  • What product or service did you buy from the beneficiary?

As a licensed financial institution, we are required to know the economic purposes of the payments and/or attain any supporting documentation verifying these purposes, in order to comply with international anti-money laundering (AML) regulations.

A vague or incomplete description of your payment may result in delay or cancellation.

US Source Income Reporting

Does this apply to me?

If your account earns US source ‘fixed or determinable, annual or periodical (FDAP) income’, Euro Pacific Bank (and Euro Pacific Securities, Inc.) is mandated to report this US source FDAP income to the IRS on your behalf, regardless of your residence jurisdiction.

The United States requires all withholding agents to file an information return, known as a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, to report amounts paid to foreign persons that are described under the Amounts Subject to NRA Withholding and Reporting, which includes all Fixed or determinable, annual or periodical (FDAP) income.

  IRS EXPANSION OF REPORTING SCOPE

Please note as of January 2017, IRS Section 871(m), has expanded the scope of reporting requirements to include single stock CFDs with a US equity as an underlying asset.

How much does the filing cost?

The cost of filing is $200.00 per account, each year that an account holds investments that pay interest or dividends attributed as ‘US source income’. This means that even if a investment/security has a one-time payment, a filing will need to be made.

This reporting is mandatory and required of all firms offering investments, whereby those investments pay interest or dividends attributed as ‘US source income’. Unfortunately, due to the prohibitive cost of complying, Euro Pacific Bank and Euro Pacific Securities must pass on the cost of these filings to our clients.

Can I avoid this annual filing cost?

If you currently have a Euro Pacific Trader brokerage account and all of your stock positions have been allocated as of January 1, 2020, you will not be assessed an annual filing fee moving forward, as our new brokerage custodian Interactive Brokers1 handles all U.S. Source Income reporting for us.

If you had stock positions migrated from our previous brokerage platform, Global TradeStation (GTS), to Interactive Brokers and those positions have not been allocated to a live Euro Pacific Trader account, we will continue to assess a $200 annual fee to cover the reporting costs and additional overhead.

We therefore urge you to contact our Sales & Trading team to either close or allocate your stock positions as soon as possible, by creating a case or scheduling a call. For the most up-to-date information on the Bank’s reporting requirements to the IRS please review their website directly.

1Euro Pacific Trader is offered by Euro Pacific Securities Inc. (“Euro Pacific Securities”), as an Introducing Broker to Interactive Brokers LLC. Interactive Brokers LLC is the custodian, technology provider, and clearing broker to all transactions executed through Euro Pacific Trader and thus the rates, conditions, and examples shown on this site may be subject to change and differ from what is displayed on Euro Pacific Trader. The rates, conditions, and examples on this site are provided on a best-efforts basis and should not be taken as final.

Euro Pacific Securities will not be held responsible for pricing and conditional discrepancies that may arise in the normal course of offering Euro Pacific Trader. Customers should always review and rely on the conditions that are shown directly on Euro Pacific Trader, and it is the responsibility of all customers to carefully review the conditions of every action before approving execution on Euro Pacific Trader.

Interactive Brokers LLC is a registered Broker-Dealer, Futures Commission Merchant and Forex Dealer Member, regulated by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and is a member of the Financial Industry Regulatory Authority (FINRA) and several other self-regulatory organizations. Interactive Brokers LLC does not endorse or recommend any introducing brokers, third-party financial advisors or hedge funds, including Euro Pacific Securities. Interactive Brokers LLC provides execution and clearing services to customers. None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers LLC to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Interactive Brokers LLC makes no representation, and assumes no liability to the accuracy or completeness of the information provided on this website.

For more information regarding Interactive Brokers, please visit www.interactivebrokers.com.

Where is the bank regulated?

Euro Pacific Bank Inc.. is licensed and regulated by the Office of the Commissioner of Financial Institutions (OCIF) in Puerto Rico as an International Financial Entity (license # IFE-033). International Financial Entities (IFEs) are licensed and regulated by the Office of the Commissioner of Financial Institutions pursuant to Act No. 273 of September 25, 2012, as amended (the IFE Act) and Regulation No. 5653.

Does the St. Vincent government offer banking/depository insurance?

As an international bank in Puerto Rico the Bank does not offer any type of banking/depository insurance for depositors. The Bank is not insured by the FDIC in the United States. Typically this type of insurance becomes necessary in a system where banks are lending out a substantial portion of their capital, thus exposing them to substantial counter-party risk. Since Euro Pacific Bank makes no loans and keeps a 100% reserve deposit ratio, depositors can be assured that the risk of default is extremely low. To read more about the the strong solvency provisions undertaken by the bank, please review the previous question.