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WT/TPR/S/322/Rev.1 â¢ Cabo Verde - 63 remain well-capitalized, according to the IMF.70 However, asset quality has deteriorated. The share of non-performing loans is relatively high (18.7% of total bank loans in December 2014 71), in part due to the economic downturn, and this has hurt bank profitability. A feature of Cabo Verde's financial system is its relatively big off-shore sector, with eight entities in 2013 licensed to operate as international financial institutions ("instituiÃ§Ãµes de crÃ©dito de autorizaÃ§Ã£o restrita").72 The off-shore banks take deposits only from non-residents and invest mainly overseas â the risks for the stability of the domestic financial system are limited, according to the IMF. 73 Since 2009, the BCV has performed periodic stress tests for the four largest domestic banks.74 4.41. Cabo Verde has reformed its regime for financial services with the passage of the "Financial System Framework Law"75 and the "Activities and Financial Institutions Law". 76 The laws entered into force on 28 March 2014 and the BCV is in the process of issuing implementing notices ("avisos"). 4.42. The hitherto separate legal frameworks for domestic financial institutions77 and offshore financial institutions78 were brought under one single regime. The objectives of the Financial System Framework Law include preservation of the stability of the financial system and prevention of systemic risks, to promote competition in the financial services market, and to prevent money laundering and the financing of terrorism. The law provides for the establishment of a deposit insurance scheme, which would also cover the expatriate Cabo Verdean community. 4.43. The Activities and Financial Institutions Law provides a new legal framework for the establishment, operation and supervision of financial institutions, including a liquidation regime. The new law extends BCV oversight to also cover "auxiliary" financial institutions, such as credit-rating institutions or auditors, while insurance and securities markets are subject to special legislation. Commercial banks are permitted to engage in insurance activities. The establishment by a foreign bank of a subsidiary ("filial") or branch ("sucursal") in Cabo Verde banks requires, inter alia, the approval by the home country's supervisory authority (Article 6). The minimum capital requirements are established in Ordinance No. 19/2005.79 The minimum capital buffer is set at 10% (Article 42).80 The BCV is in the process of moving to a risk-based supervision based on the Basel II framework. Bank fees and charges are subject to annual approval by the BCV.81 Mergers of financial institutions, including insurance companies82, are subject to authorization by the BCV.83 The merger procedure follows the rules of Articles 195 et seq. of the Commercial Code.84 Financial services providers benefit from fiscal incentives, including exemption from stamp duties and customs duties on imports of materials and capital goods that are used exclusively for their establishment (section 3.2.4).85 4.44. By law, remittance services must be provided by a bank or para-bank. Five institutions currently offer remittance services under arrangements with Western Union (Banco Comercial do AtlÃ¢ntico; Caixa EconÃ³mica de Cabo Verde; Ecobank; Banco Caboverdiano de NegÃ³cios; and 70 71 loans. IMF (2014), pp. 9 and 32. The tourism, transport, business and construction sector account for most of the non-performing 72 Banco FiduciÃ¡rio Internacional, Banco Sul AtlÃ¢ntico, Banco PortuguÃªs de NegÃ³cios, Banco Montepio Geral, Banco EspÃrito Santo, Banco Privado Internacional, Caixa de CrÃ©dito AgrÃcola MÃºtua, and Atlantic International Bank. In addition, there is one licensed off-shore fund manager (CA Finance, SA). 73 IMF (2013), p. 42. 74 For the financial stability reports, see BCV online information. Viewed at: http://www.bcv.cv/vEN/supervision/financialstabilityreport/Paginas/RelatÃ³riodeEstabilidadeFinanceira2009.asp x. 75 Law No. 61/VIII/2014. 76 Law No. 62/VIII/2014. 77 Previous onshore regime: Law No. 3/V/96; Decree-Law No. 29/2005 (both abrogated). 78 Previous offshore regime: Law No. 43/III/88; Decree-Law No. 12/2005 (both abrogated). 79 Ordinance No. 19/2005 of 14 March 2005, as amended by Ordinance No. 14/2013 of 22 February 2013. 80 Ratio of capital (tier 1) to risk-weighted assets. 81 The table with the fees and charges has to be sent to the BCV by 15 November of the previous year (Notice No 1/2013 of 12 April 2013). The same notice also defines services that are free of charge (Article 15). 82 Article 51, Legislative-Decree No. 3/2010 of 17 May 2010. 83 Article 26, Activities and Financial Institutions Law (Law No. 62/VIII/2014). 84 Legislative Decree No. 3/99 of 29 March 1999. 85 Law No. 26/VIII/2013, Article 28 and Law No. 61/VIII/2014, Article 69.