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

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

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(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 regula- tions 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

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

(F) Its manager or agent residing in this Territory 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 wilfully 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 depart- ment a commercial license in accordance with § 72102 this Code.

(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

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(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.

SOURCE: GC § 30903.

2011 NOTE: References to the “”Banking Board”” changed to “”Banking and
Insurance Board”” pursuant to P.L. 27-088:10 (May 6, 2004).

2013 NOTE: Pursuant the authority granted by 1 Guam Code Ann. § 1606, numbers and/or letters in subsections (a) and (b)(2) were altered to adhere to the Compiler’s alpha- numeric scheme.