Tuesday, May 29, 2007

Results of a Survey on the Public Opinion about Telecoms Liberalization in the BVI

JML Communications Ltd. commissioned a survey to get people's individual opinion about the process of telecommunications liberalization taking place in the British Virgin Islands. The survey was conducted by Research and Planning - a reputable research firm based in El Salvador. From May 2-10, 2007 they have interviewed a total of 350 persons, using the BVI Telephone Directory.

As a result of the survey, an estimated 77% of BVI residents surveyed think that the government should provide licenses to more than three companies currently having them, to operate in the new liberalized telecommunications market. 76.8% of customers interviewed by Research and Planning said they would prefer that government allows more than the three existing companies to receive a license,while 12.9% said they would prefer government allows only the three existing companies to receive a license; 10.3% didn’t know or had no opinion. Certain number of people also responded that they want to see the companies working with telecommunications to be local, because the money generated this way would stay in the islands.
Respondents also want the following mobile telecoms operators to enter the BVI market - Cingular (4.23), Digicel Group (4.14); bMobile (3.64); Cable & Wireless (2.86); and CCT Global Communications – (2.42).

Other things indicated by the survey are that:

  • Telecommunication liberalization is estimated positively by most respondents;
  • Liberalization should bring better rates, reliable services and technical support, bigger diversity of services and reliable companies;
  • By the opinion of many respondents, the government has delayed resolving of the matter because they are protecting the existing companies from other competitors;
  • A large amount of people did not have any knowledge of any company applying for a license, but most of them mentioned Digicel, which had been refused a license by government. Most respondents also mentioned that they would like to see Digicel in the BVI market, because it provides good and reliable services and would lower prices;
  • The government should not grant more licenses than the market can handle, but also should not restrict the number of companies applying for a license.

Sunday, May 27, 2007

The BVI Ministry of Finance Establishes Website

At the beginning of this month the Ministry of Finance of the British Virgin Islands has announced its website, www.finance.gov.vg, having the aim to inform public servants and the general public about the services provided by the Ministry. Minister of Finance Honourable Ronnie W.Skelton told the Department of Information and Public Relations that the website will provide valuable information on the work of the Ministry.

According to BVI Financial Secretary Mr. Neil Smith, the website is aimed at 'informing the public and the civil service of the Virgin Islands on the activities and expectations of the Ministry of Finance'. The site provides information on financial legislation and regulations, budget estimates, and global fiscal and economic issues. It also gives access to general public and Government employees to various forms. FAQ section of the site provides information on various processes including the tendering and contracts process.

As some criticism I should note that as of today some chapters (for example the chapter 'Current Initiatives') of the new website still do not include any information, however the website provides many useful information that will be completed at the course of site's development.

Actually, the main duty of the Ministry of Finance is leadership and policy direction relating to fiscal, economic growth and development of the territory. One of the Ministry's duties is supervising the Financial Services Commission and the Development Bank of the British Virgin Islands. Strategic objectives of the Ministry of Finance are implemented through its five departments that carry out the operational functions of the Ministry - Her Majesty’s Customs, BVI Post Office, Department of Information Technology, Inland Revenue Department and the Treasury Department.

The Ministry joined some other BVI Government departments that have recently introduced their websites - the Immigration Department, Social Development Department, Deputy Governor’s Office and Human Resources Department.

Currently the BVI Financial Services Comission website is considered to be the best BVI government’s website. It is online for several years, it provides up-to date information and it was even redesigned some months ago. It is expected that more and more BVI government’s structures will go online. I hope that BVI International Finance Centre will be one of them very soon.

Thursday, May 24, 2007

Statistics of Chinese Government: Growth of Investments from BVI

On May 11, 2007 the State Administration of Industry and Commerce of China named the sources of foreign investment in country's economy. British Virgin Islands leads the 4 major offshore finance centers investing in China. Other 3 are Cayman Islands, Samoa and Mauritius. About 13,000 investors from BVI have invested in China, that is 31.9% more than last year and a faster growth than in US, Japan and Taiwan.

According to the information regularly provided by the government of China, BVI usually takes the second place in the Chinese FDI Sources list, the first one being Hong Kong. The last statement confirming traditional ratings of the British Virgin Islands was released by the Ministry of Commerce a month ago. Just in January 2007, BVI companies invested more than 1 billion USD in the Chinese economy.

Japan is the third traditional investor in China. According to the new statistics, currently there are about 199,000 other Asian countries' enterprises registered in China, a 4.5% growth compared with last year; these investors take up 72.5% of all the foreign enterprises registered in China.

In the first months of 2007, the main sources of foreign investment in China have been extended to Africa and Latin America.

Monday, May 21, 2007

BVI FSC Establishes New Penalty Regime for Licensees

After the recent approvement of Telecommunications Liberalisation Policy, the British Virgin Islands Financial Services Commission has implemented a new penalty regime, with the purpose to promote higher standards among licensees. The Commission has commented that penalties are intended to stop those licensees who breached regulatory laws from committing further contravention, and to show the benefits of regulatory compliance.

The Regulations (Administrative Penalties), approved by Executive Council under the Financial Services Commission Act, 2001, came into effect on 15 January 2007. The penalties vary depending on the severity of the contravention, the lowest one being $100 and the highest $20,000.

Before imposing a penalty, the Commission must first give writing notice to a licensee, which should include the contravention on which the Commission proposes to impose the penalty, the amount of the proposed penalty, and the entitlement of the licensee to make representations to the Commission. Then the licensee has 21 days to make factual representations to the Commission, and these are taken into consideration before a penalty is imposed. After the Commission issues a final decision to impose a penalty, the licensee receives a penalty notice setting its amount.

In determining the amount of a penalty, BVI FSC has elaborated the following guidelines: the nature and seriousness of the contravention; whether the licensee has previously contravened the Act or any regulatory legislation; whether the contravention was deliberate, or caused by the negligrence of the licensee; whether any third parties got any loss or damage as a result of this contravention; at last, the ability of the licensee to pay the penalty.

Penalties may be appealed to the Financial Services Appeal Board.

Friday, May 18, 2007

BVI Governor Establishes the Commission to Probe Stamp Duty Evasion

On May 16, 2007, the institution of a commission of inquiry was announced by BVI Governor David Pearey. The commission is to be established after the election, and will investigate the cases the apparent undervaluing of property for the purpose of avoiding stamp duty.

David Pearey commented that the decision on the establishment of the Commission has arisen out of the recommendation in favour of an inquiry in March 2006 Public Accounts Committee report. He said: “In the intervening 14 months there has been a full investigation by the Attorney General and the Director of Public of Public Prosecution into the transactions highlighted in the report ...These transactions were found to have given rise to an underpayment of stamp duty in excess of $500,000. Full payment of these sums is being secured, but evidence points to the likelihood that this practice has been continuing over many years.”

After the elections, the commission will examine the evidence of underpayment over a period starting from the year 2000, and other related matters. According to the BVI Constitution, the elections are due in June 2007, but must be held before October 10. The Governor said that the post-election timing for the inquiry is to ensure that it can make judgements away from the political limelight.

Chief Minister Dr. D. Orlando Smith and the Leader of the Opposition Ralph T. O'Neal have also been informed of the decision to issue an inquiry into the matter.

Wednesday, May 16, 2007

1st Advisory Warning of 2007 Issued by the BVI FSC

On May 7, the British Virgin Islands Financial Services Commission has issued Advisory Warning No. 1 of 2007, signed by Robert Mathavious. The first Advisory Warning of this year concerns Dexter Insurance Company, Ltd., stating that the company is no longer licensed by the BVI FSC to conduct insurance business.

The reason is that Dexter's licence to carry on insurance business from within the BVI has not been renewed since December 31, 2006. The Financial Services Commission advised public not to conduct insurance business with Dexter, based on the fact that it is licensed to carry on business from within the BVI.

The issues coming under the power of the BVI FSC are licensing and following supervision of regulated activities such as insurance, mutual funds, banking and trust business, carried on in or from the BVI territory. Advisory Warnings are published by the Commission on its site for the general publics, to protect them from scams, misunderstandings or offences.

Monday, May 14, 2007

Digicel Files Legal Action against BVI Telecommunications Regulatory Commission

On April 23, BVI Government released a new telecommunications policy outlining that only three current telecom operators in the BVI, namely CCT Global Communications, Cable & Wireless, and BVI Cable TV, will be granted licences to operate in the territory, with a possibility of a fourth considered at a later stage.

After the CCT Global Telecommunications filed for compensation under the Telecommunications Act, 2006, another licence holder Digicel has taken legal action against BVI telecoms regulators.

The telecommunications company whose licence had also been extended to March 31, 2007, made a statement, where again expressed its interest in entering the BVI market, just some days after the application by the company was filed in the High Court against the BVI Telecommunications Regulatory Commission (TRC).

In February, the TRC had rejected Digicel's application for a mobile telecommunications licence, under the reason that it did not meet the provisions set out under the Telecommunications Act. Now the Regulatory Commission, under the decision of the Court, has to consider the same application.

Digicel Group Regulatory & Legal Director, Jan Tjernell, stated that Digicel has been a driving force of mobile liberalisation across the entire Caribbean region; he also said that the company has always been interested and still remains interested in entering the BVI mobile market.

The company's application was filed on April 30, and granted by the court on May 4. It was ruled by the Court that the hearing will continue on May 18; the full judicial review application is also expected to be heard on this date.

Thursday, May 10, 2007

CCT to Ask Compensation from the BVI Government

In the end of April BVI government has approved the telecommunications liberalisation policy that ended CCT's long-held monopoly, by allowing all the three currently licensed public suppliers to submit applications for licensing.

Last week CCT Global Communications filed for compensation from the government
in connection with this decision, under the Telecommunications Act, 2006, which includes the following clause: “Where prior to the coming into force of this Act, a person who was licensed under the Telecommunications Act to provide a public telecommunications network or public telecommunications service loses any existing right pursuant to such licence and such loss results in any pecuniary or other quantifiable disadvantage, the person shall be entitled to seek compensation for such loss."

Government's decision taken in the terms of policy of liberalisation and restructuring of the telecommunications industry in the BVI territory, allowed Cable & Wireless and BVI Cable TV to compete in the wireless telephone services sector, along with CCT Global Communications.

According to the statement, BVI Minister of Communications and Works Elmore Stoutt is now in consultation over the issue with the Telecommunications Regulatory Commission.

Monday, May 07, 2007

Final Constitution Draft Received by the BVI Government

Last week it was announced by BVI Chief Minister Honourable Dr Orlando Smith that after long period of Constitutional talks and negotiations with the British Government, the final draft of a new Constitution is ready.

The new provisions included in the final draft of the Constitution are: a new cabinet form of government instead of Executive Council; appointment of Premier Minister instead of the Chief Minister; establishing of a House of Assembly instead of the Legislative Council; the separated duties of the Attorney General and the Director of Public Prosecutions. Other chapters of the Constitution provide for the legislature to remain in the governance of citizens of the BVI.

The modernized Constitution will be implemented following the next dissolution of the Legislative Council, - except for some provisions concerning the change from Executive Council to a Cabinet system of Government, change of Chief Minister's title, and the appointment of a Cabinet Secretary. They will come into effect after the general elections.

The BVI government currently undertakes the public education programme aimed at informing the public on the new Constitution. After these public meetings the people's constitution will be debated in the Legislative Council, and then sent to the Privy Council for final approval.

Dr. Orlando Smith has been the head of the BVI Constitutional Negotiating Team during all the period of negotiations which were successfully concluded in March. The BVI team that participated in the negotiations was formed of members of the Legislative Council and representatives of the Constitutional Review Commission. Also, the Commission published a Report after extensive discussions with the people of the BVI, which formed the basis upon which the Constitutional talks were conducted together with the UK team.

"This new constitution is a symbol of empowerment since for the first time in our history we now have a human rights or fundamental rights chapter," the Chief Minister said, "While I urge that every citizen should make themselves familiar with the full Constitution, now in circulation, I hope that you will get a feel for what has been achieved and is expected to govern the affairs of the British Virgin Islands in the foreseeable future."

By words of Dr. Orlando Smith, the new Constitution will finally provide a sustainable framework in which the basic rights of the people of the BVI shall be protected and preserved.

Wednesday, May 02, 2007

BVI in the Malaysian list of top 10 FDI source countries

According to the information provided by the Malaysian state-run news agency, last year Malaysia attracted very high level of investments. The agency quoted International Trade and Industry Parliamentary Secretary Tan Yee Kew who said that Malaysia was the second in the Asian FDI top ranking, whith the amount of 20.2 billion ringgit (approximately US$5.9 billion; 1MYR ≈ 0.29US$). The first one is Singapore, which recorded last year 30.7 billion ringgit of foreign direct investments.

Tan Yee Kew also named the top 10 FDI source countries and their investment amounts in Malaysia in 2005 and 2006. The British Virgin Islands, with 700 million, is among these FDI leaders. The first one is Japan, with 8.1 billion ringgit; other countries in the list are the United States (7.6 billion), the Netherlands (5 billion), Singapore (4.9 billion), Australia, South Korea, the Cayman Islands, Taiwan and the United Kingdom.

Tan stated the amount of investments in Malaysia in 2006 - 46 billion ringgit for 1,077 manufacturing projects, compared to 31 billion ringgit in 2005.

The main sectors for foreign direct investments in Malaysian economy were electric and electronic products, chemicals and chemical products, metallic products, non-metallic mineral products, plastic, food, measuring and scientific instruments, machinery and equipment.