Wednesday, April 29, 2009

$279 Mln Budget Passed by the BVI House of Assembly

The record budget of $279,8 mln which was presented by the Premier in March, has been passed by the British Virgin Islands House of Assembly. This was preceded by some weeks of intensive deliberation at Standing Finance Committee and two days of debate in the House.

The projected revenue outlined by the Government for 2009 is $279,841,000, and its operational expenses are $253,593,100, with an estimated surplus of $26,147,900. By words of the Premier and Finance Minister Ralph O'Neal, the budget was estimated considering the factors of global financial crisis and the G20 summit in London.

BVI Premier noted that 63% of BVI's revenue comes from financial services, and that is why they have to work on legislation and to make all possible efforts to protect the financial services industry in the jurisdiction, and to protect and enhance its status in the financial world. By his words, the country has opportunities for this.

Sunday, April 19, 2009

BVI Visit of British Foreign Office Minister

Gillian Merron MP, Parliamentary Under-Secretary of State of Britain's Foreign and Commonwealth Office with responsibility for the Overseas Territories, made a two-day visit to the British Virgin Islands. She had talks with Premier Ralph O’Neal, Deputy Premier Dancia Penn, other ministers of government as well as Opposition leader, Dr Orlando Smith. The result of the visit which was concluded on April 10, became a statement issued before her departure.

Among other issues, she spoke on the impact of the global economic downturn on the BVI economy, which relies upon international financial business and tourism. She expressed confidence that the announcement of the US$1.1 trillion support to the global economy during the G-20 summit in London will help everyone. She said, "BVI were right to recommit to the OECD standard on tax exchange of information in advance of the Summit. I welcome the Premier's further commitment not only to meet that standard, but go beyond it - and go beyond it in the very near future."

Gillian Merron was appointed to the post of UK Overseas Territories Minister in October 2008, and this was her first visit to the BVI.

Thursday, April 16, 2009

BVI Listing in OECD Report: Statement of BVI Premier Ralph O'Neal

The report published by OECD after the G-20 summit, which classified financial centres by their progress towards the “internationally agreed tax standard”, gave rise to the sharp reaction of some countries, which were included on the “grey list” - among them Switzerland, Luxembourg and Belgium.For BVI, which was expected to pass through the international inspection, it also became somehow disappointing to get into the grey category.

This was told by BVI Premier Ralph O'Neal in the press release issued on the G20 Summit and an Organisation for Economic Co-operation and Development (OECD) Progress Report. By his words, the BVI is disappointed that the format of the listings does not recognise its long standing commitment and implementation of international standards.

Yet, the Premier said that the business in BVI will be as usual, regardless of the ranking, and said the territory would provide continuing support in promoting transparency. Ralph O'Neal said, "We are aware that the G-20 Leaders intend to develop further proposals on financial regulation and we will also be monitoring these closely ... As a co-operative member of the global community, the BVI will continue to adopt international regulatory standards of best practice as they emerge."

BVI are planning to continue negotiations with OECD countries for conclusion of Tax Information Exchange Agreements. Currently, there are three TIEAs signed by the territory with the US, the UK, and Australia. In his statement, the Premier announced that the number of TIEAs will come to ten on May 18, when it signs seven agreements with “the Nordic countries.”

Tuesday, April 14, 2009

Results of G-20 Summit: Further Implementation of Tax Standards Recommended to BVI

On April 2, 2009, during the economic summit of G-20 leaders, which took place in London, the G-20 and the OECD adopted its strategy of tax havens blacklisting. Other areas which experienced tougher regulations were hedge funds and banking industry. As regards offshore industry, the report published by the OECD includes the assessment of 82 financial centres concerning their progress towards the “internationally agreed tax standard.”

The G-20 summit did not single out any specific plans for further regulatory implementation, and leaders at the summit agreed to recognise OECD guidelines. One of the main criteria how the jurisdictions are classified is exchange of information on request in all tax matters for the purposes of administering and enforcing domestic tax law. So, it is important how many Tax Information Exchange Agreements are signed by the countries.

OECD recognized the strong position of the Cayman, the British Virgin islands, and Jersey, as countries committed to the internationally agreed tax standards. However, the BVI and the Cayman Islands, among other jurisdictions, were included in the “grey list”, as those which have not yet substantially implemented them. The most familiar and most popular offshore financial centres have been put on the “grey list”, among them Luxembourg, Switzerland, Singapore, Bermuda, Gibraltar, the Turks and Caicos, Monaco, Andorra, and others.

Later on, the seven British crown ependencies, including BVI, were set by the Prime Minister a September deadline to sign up the missing number of TIEA's (which should be twelve). Gordon Brown has written to all of them that he expects them to move beyond meeting the OECD's minimum standards on co-operation, and come to the maximum transparency.

Saturday, April 11, 2009

Twelth Statistical Bulletin Published by the BVI FSC

The BVI Financial Services Commission has issued the twelfth volume of its Quarterly Statistical Bulletin, which includes information on the situation in the BVI financial services industry in the third quarter of 2008. The Commission reports on the progress made in different sectors of the BVI financial services industry, and provides new statistical data and analysis.

By the information of Registry of Corporate Affairs, in the third quarter of 2008 there were 16,133 new incorporations. This is less than 20,595 companies incorporated in the third quarter of 2007, but a little more than the number of new BVI companies registered in the second quarter of 2008. Cumulative amount of active companies as of 30 September 2008 was 461,998. This chart below shows the number of new companies incorporated in BVI through the third quarter periods of 2002-2008:
Banking and Fiduciary Services sector showed little changes compared to the second quarter of 2008, and to the third quarter of the previous year. Banking Sector statistics showed the percentage of liquid assets as 44.78% of total deposits, the number of non-performing loans made 3.12% of the total amount of loans, and total assets amount made more than 2 million USD.
Among other data shown in the Bulletin, there is Quarterly Post Incorporation Transactions Statistics for the period, showing the volume of activity of the BVI companies. The Quarter 3 2008 Post Licensing Transactions Statistics included information on the activities of the newly incorporated entities, i.e. the appointment of directors (39), change of authorised agent number, change of auditor (3), change of shareholding/ownership (1).

The Investment Business/Mutual Funds Sector provided information on new licences and certificates issued in the third quarter 2008, according to which 14 new licences were issued in this period (compared to 26 in the same period of 2007 and 10 in Q2 2008). Cumulative number of licences as of September 30 2008 was 576. Also, at the end of this period the share of Professional Active Mutual Funds was 64%, Private Mutual Funds making 28%, and Public Funds making 8% of the total amount.

In the field of Legal and International Co-operation, following figures were reported:
25 formal requests for international co-operation matters (requiring non-public information disclosure) – compared to 15 formal requests in Q2 2008, and 14 requests in Q3 2007. There were 39 enforcement matters in the reported period (27 in the second quarter of 2008, and no as such in the third quarter of 2007).

Wednesday, April 01, 2009

The Commission Issues Advisory Warning on three Insurance Companies

On March 24 2009, Advisory Warning No. 2 of the year 2009 was published by the British Virgin Islands Financial Services Commission. By issuing this document, the Commission informed the public that Colonial Life Insurance Company (Trinidad) Limited, British American Insurance Company Limited and the CL Financial Limited are not licensed to carry on financial services business in or from the territory of the British Virgin Islands.

The Commission also asked the public to inform them of the facts when they at any time had any transactions with the above-mentioned companies, or purchased any kinds of financial products from them, including insurance or investment type products.