Court Decision on Appointing Joint Administrators for Whitten Trust

Following the Public Statement No. 1 of 2009 on Reserve International Liquidity Fund, the British Virgin Islands Financial Services Commission issued public announcement to inform the public on the appointment of Joint Administrators for Whitten Trust Company Limited, the holder of the Class I trust licence and one of companies of Whitten Capital Group. Upon the application of the Commission, on January 14, 2009 the High Court of Justice of the British Virgin Islands has appointed Mr. Ian Trumper, Senior Managing Director of FTI Forensic and Litigation Consulting in London, and Mr. Ian Thompson, Managing Partner in FTI Forensic Accounting Limited, BVI office as Joint Administrators of the Trust.

In the post of Joint Administrators, they will have all the powers needed to take over and manage the Trust, and get all the information relevant to its affairs. Also, by this statement they are required to report to the High Court of Justice of the British Virgin Islands and the Commission within 45 days on the exercise of their powers.

The statement was published by the FSC on January 14 2009, and signed by Managing Director/CEO of the Commission Robert A. Mathavious.

BVI FSC Makes New Public Announcement on Reserve International Liquidity Fund

The new announcement published by the BVI FSC has the purpose to inform public on the changes in the status of the BVI-domiciled Reserve International Liquidity Fund Ltd.

Along with the new Directive, the Commission named all the actions taken and correspondence submitted by the Fund which led to the new resolution. The amendments are added to its previous enforcement directive against the Reserve Fund, issued in October 2008, which required from the Fund to take some actions in connection with ongoing litigation involving the Fund and initiated by its investors. In November 2008, the Fund submitted a draft Plan of Liquidation and Distribution of Assets to the Commission. A month later, the Commission conducted a detailed review of the proposals and sent its requirements to the Fund. In its response on 8 December 2008, the Fund addressed some FSC requirements, but failed to address most essential issues.

On 31 December 2008, the BVI Fund submitted an amended proposal for the payment of the proceeds of the redemption of shares, where proposed to amend its Articles of Association to permit the Fund to make interim payments as partial payment of redemption requests of its investors, and expected to make the first payment of approximately $1.6 billion.

By the Amended Directive, published on January 13, 2009, the Commission removed the suspension on shares redemption and the payment of redemption proceeds to the Fund investors. In accordance with this resolution, the BVI Fund will be able to make an interim payment of the proceeds of redemption of shares, in accordance with its proposal submitted on 31 December. The Commission also directed that, following the first interim payment of redemptions proceeds, no further payments should be made without the Commission's prior written consent.

BVI Recognised For Robust Regulatory Framework and Adherence to FATF Recommendations

The work of financial services sector in the British Virgin Islands was highly evaluated by the Caribbean Financial Action Task Force (CFATF). According to the CFATF report, the BVI is highly compliant with the Financial Action Task Force (FATF); the territory also gained special recognition for the commitment in the fight against money laundering and the financing of terrorism. The CFATF report concluded that the BVI is largely compliant with the FATF 40 anti-money laundering Recommendations and 9 Special Recommendations relating to terrorism financing, and that it has shown “a robust public policy commitment to the establishment of standards in legal, law enforcement, regulatory and international co-operation matters.”

To develop the Mutual Evaluation Report, the CFATF conducted a visit in the BVI in February last year, with the purpose to examine the BVI’s AML/CFT regime and review Territory's institutional framework, relevant AML/CFT laws, regulations, guidelines, policies and the regulatory systems, their implementation, capacity and efficiency.

The Financial Services Commission said that it is pleased with the result of the mutual evaluation and the recognition given to the territory's adherence to AML/CFT standards. However, it also noted that there are areas highlighted by the report which need improvement. Now FSC is focused on adopting “the appropriate measures to effect necessary improvements to its areas of AML/CFT responsibility.”

Walkers Provides Local BVI and Cayman Counsel in Singapore

Walkers, one of the leading international offshore law firms, announced opening the new office in Singapore. This decision, meaning further expansion into the Asian market, was made due to the increasing demand for British Virgin Islands and Cayman Islands legal and corporate services in Singapore as well as other countries of the Association of Southeast Asian Nations (ASEAN). Walkers will have BVI counsel practicing in the new office in Singapore, and it will be the first law firm to provide practicing Cayman Islands counsel in this Asian country.

The official opening of the new office will take place on 2 February 2009. The Singapore office will be spearheaded by partners Ashley Gunning, who will lead the investment funds and corporate groups, and John Rogers, who will be the head of the finance team. Mr. Rogers was the first finance lawyer in Walkers’ Hong Kong office, while Mr. Gunning has significant expertise in hedge funds and private equity, as well as general corporate matters, having worked in both the Cayman Islands and the BVI.

Grant Stein, global managing partner of Walkers, commented on the firm’s expansion in Singapore saying that “the opportunities presented in Singapore make it a logical next step in the process of expanding Walkers’ global development “. By his words, extending its presence in the ASEAN, the firm “will be able to provide seamless integrated Cayman Islands and BVI offshore legal and corporate services to clients operating in this region.”

Opening of a new Singapore office of Walkers group follows its recent expansion in Hong Kong, where it added ten new staff members and relocated to new, larger premises. The HK staff, now including approximately 20 lawyers, will work in synergy with the Singapore team to provide clients in the Asian region with Cayman and BVI counsel as well as advice on Jersey law.

New Chairman Appointed for the BVI Tourist Board

The British Virgin Islands has appointed Myron Walwyn, an experienced businessman and an attorney at law, as a new Chairman of the Tourist Board. Being a qualified attorney, Myron Walwyn is the Manager/Director of MVW International, the parent company of Moorings Marina Inn Restaurant and Nexus Cafe Bar and Grille.

Walwyn has more than 15 years experience in hotel management, which is very actual considering that tourism is one of the main economic pillars of the BVI economy. The BVI Tourist Board is mandated to ensure that the industry maintains its leadership position as a diverse upscale niche market destination.

No Growth in Financial Services Industry Recorded in 2008

During the sitting of the House of Assembly, Premier and Minister for Finance Honourable Ralph T. O'Neal talked on the slowdown in the growth of new incorporations in the financial services sector of BVI, due to the downturn in the world economy. Answering to questions posed by the BVI Opposition Leader Dr. Orlando Smith, on the impact of the world economy downturn on the lower activity in the sphere of financial services and on Government's inability to comply with the revenue project for the year 2008, the Premier confirmed the minimum growth in this sphere in 2008, due to the economic climate changes worldwide. He also said it is too early to make the complete evaluation of what effects global economic situation will have on the local industry in the British Virgin Islands.

By words of Hon. Ralph O'Neal, while 2007 was the year of unprecedented growth with approximately 75,000 newly incorporated offshore companies, by the end of 2008 new incorporations were down 20%. However, according to preliminary figures, it is 3rd best year by the number of new incorporations, and revenue for the period has not fallen as sharply.

The Premier suggested that industries most affected by the global economic downturn will be captive insurance and mutual funds, and this is confirmed by the increased number of funds' requests for voluntary cancellation, by notification of suspensions of redemptions, and a downturn in the number of new applications. These are the signs of minimal or no growth in these spheres, particularly in the first half of 2009.

According to the information stated in the press release of the Government Information Service, financial services and tourism are the main industries launching the development of economy of BVI, and Government of the territory is committed to ensuring their survival. However, by the preliminary statistics for 2008, the global economic climate resulted in the decline of tourism industry.

Premier Speaks on 2008 Revenue Projection

Hon. Ralph T. O’ Neal, Premier and Minister of Finance, admitted BVI Government's inability to comply with the revenue project made for the year 2008, notwithstanding the encouraging first quarter in the major sectors of the territory's economy. Responding to questions of the Leader of the Opposition Dr. Orlando Smith during the last sitting of the House of Assembly on whether Government has met its revenue projections for 2008, he said that, because of the global financial crisis, up to December 15 the Government had collected just $267,327,438, while the planned revenue was $284,605,000. By his words, the Government also expected a year end closing revenue between $270M and $280M.

The Premier was also asked if the revenue projection 2008 was inclusive of the windfall from the IPOC fund judgement, when US$45M amount was confiscated by the BVI court after the 17 month investigating period of the disbursement between the Bermuda-based fund and the British Virgin Islands. The amount was reportedly split in half between the BVI and Bermuda, without the awareness of the BVI government.

The Premier made it clear that the figures for the revenue projection were not inclusive of the IPOC case. If added, the IPOC windfall will result in the government reaching or surpassing its revenue projection for the year 2008, and this amount is seen as a bonus not being part of government's projection in the 2008 budget.

Some months ago, the Premier had promised that government will launch a transparent investigation into the matter. In November, Hon. Ralph T. O’ Neal, said that he is awaiting the findings from the investigations into the disbursement.