Guam § 106604 - Off-Shore Lending Facility.

§ 106604. Off-Shore Lending Facility.

(a) An Off-Shore Lending Facility is a bank office established on Guam solely for the purpose of

recording for accounting purposes

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(1) loans made to borrowers outside of Guam by other offices of the same bank located outside

of Guam, or

(2) loans made to borrowers outside of Guam by banks located outside of Guam who are

correspondent banks of a bank in Guam which is authorized to operate an Off-Shore Lending Facility

and

(3) deposits made by persons outside of Guam with other offices of the same bank located outside

of Guam, or

(4) deposits made by persons outside of Guam with correspondent banks of a bank In Guam

which is authorized to operate an Off-Shore Lending Facility.

(b) Before any bank may operate an Off-Shore Lending Facility in Guam, a written license authorized

by the Banking and Insurance Board and issued by the Commissioner shall first be obtained.

(1) Any bank authorized to conduct banking business in Guam under the provisions of this Title

shall be issued a license upon the filing by it of a verified statement with the Banking and Insurance

Board that it intends to establish and operate an Off-Shore Lending Facility and that such Off-Shore

Lending Facility shall be operated in accordance with the provisions of this Title.

(2) Any bank not authorized to conduct banking business in Guam under the provisions of this

Title may, subject to the regulations of the Banking and Insurance Board, be issued a license after it

has met the following requirements:

(A) It is authorized by its charter to transact the character of business described in § 106604

and has complied with the laws of the jurisdiction under which it is incorporated.

(B) It has filed with the Banking and Insurance Board a certified copy of its charter or articles

of incorporation and of its by-laws and a copy of an application for a commercial license pursuant

to §§ 72104 and 72105 of this Code.

(C) It has furnished to the Banking and Insurance Board such proof of the nature and

character of its business and its financial condition, stock ownership and management as it may

require.

(D) It has designated the Commissioner and his successor in office by a duly executed

instrument in writing, its agent, upon whom process directed to be corporation may be served.

The Commissioner shall forward by mail, postage prepaid, a copy of every process served upon

him under the provisions of this subdivision, addressed to the manager or agent of such

corporation at its principal place of business in Guam. For each copy of process, the

Commissioner shall collect the sum of Twenty-Five Dollars ($25) which shall be paid by the

plaintiff or moving party at the time of service, to be recovered by him as a part of his cost.

(E) It has complied with all applicable requirements of the Title 18 Guam Code Annotated

relating to foreign corporations except matters specifically otherwise provided for in this Title.

(F) Its manager or agent residing in Guam has taken an oath that he will, as far as the duty

devolves upon him, diligently and honestly administer the affairs of the corporation and will not

knowingly violate or willfully permit to be violated any of the provisions of law applicable to the

corporation and the oath, subscribed by the manager or agent taking it, has been transmitted to

the Commissioner and filed in his office.

(G) It has received from the License Board of the department a commercial license in

accordance with § 72102 this Code.

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(3) The license issued pursuant to this Subsection shall be for a term of five (5) years renewable

for terms of five (5) years. The license fee for each five (5) year license period shall be Five Hundred

Dollars ($500) payable at the time an application for licensure is filed with the Commissioner. If the

license is not issued, the Five Hundred Dollars ($500) fee shall be refunded to the applicant.

(c) No bank authorized to operate an Off-Shore Lending Facility in Guam shall permit any officer,

employee or agent of the bank within Guam to actively solicit or negotiate any loan for an Off-Shore

Lending Facility.

(d) Interest earned by a bank through the operation of an Off-Shore Lending Facility in Guam shall

not be treated as Guam source income for tax purposes;

(1) provided the bank has been authorized to operate an Off-Shore Lending Facility; and

(2) provided there has been no violation of Subsection (c) of this Section.

(e) Interest paid by a bank to a depositor having funds on deposit with it through an Off-Shore Lending

Facility shall not be treated as Guam source income or tax purposes

(1) provided the bank has been authorized to operate an Off-Shore Lending Facility,

(2) provided there has been no violation of Subsection (c) of this Section,

(3) provided the depositor is not engaged in a trade or business within Guam, and

(4) provided the depositor is not a citizen or resident of Guam.

(f) Each Off-Shore Lending Facility shall submit to the Banking and Insurance Board twice in each

calendar year a report of its condition as of such dates as it may fix. Such reports shall contain such

information as the Banking and Insurance Board may reasonably require to ascertain whether or not the

Off-Shore Lending Facility is being operated in accordance with the provisions of this § 106604, but such

reports shall not extend to any of the activities of the bank other than those of the Off-Shore Lending

Facility. This Subsection shall in no way impede or limit other powers of examination which exist pursuant

to this Title or other provisions of law.

(g) In the event a court of competent jurisdiction shall, in any respect or with regard to any class of

banks, hold invalid any provision contained in this Section, the invalidity shall not effect any other provision

of this Section or the rights of other classes of banks. Upon a holding of invalidity, this Section shall be

construed as if the invalid provision had never been contained herein or had never been made applicable to

the other classes of banks.