New Warnings Published by the Commission

On July 10 - 13, 2009, the BVI FSC published several documents warning the public on firms that are not licensed to carry on business in or from the territory of the British Virgin Islands. Among the firms that are not authorized to carry on financial services business in BVI there are:
- SP Trade Investments Capital Ltd.
- SP Trader Management Company Ltd.
- Taurus Global Markets Ltd.
- iTrade Capital Markets Ltd.
- Marketiva Corporation
- Pro Finance Group Inc. (PFGFX)

The Commission advised the public to be cautious in transactions with the following companies which are not licensed to carry on banking or financial services business in BVI:
- MBC Financial Services Ltd.
- Multiple Banks Clearing (MBC FX)

The companies that are not licensed to carry on registered agent services business in the British Virgin Islands, and are not incorporated in the British Virgin Islands are:
- Gold-Tech (GT) Services Limited
- Kaizen Corporate Services Limited
- CC Logic LLC

Also, the FSC informed the public that European Direct International Insurance Limited is not licensed to carry on insurance business in or from within the territory, and is not registered or incorporated in the British Virgin Islands.

Advisory Warnings No. 10 - 18 of 2009 were issued under Section 4 (1) (l) of the Financial Services Commission Act, 2001, and signed by Robert A. Mathavious.

Financing and Money Services Act Published by the FSC

On July 13, 2009, the BVI FS Commission published Financing and Money Services Act, 2009. The document which was finally passed on May 26 2009 and signed by the BVI governor David Pearey includes provisions on licensing, registration and supervision of financing business and money services business carried in or from the jurisdiction. The purpose of the Act is to fully comply with the FATF recommendation for all physical and legal persons who provide money or value transfer services to be licensed or registered.

The Act concerns the BVI business companies and foreign companies engaged in financing business or money services business; it does not apply to companies licensed under the Banks and Trust Companies Act, 1990 (for them there is a separate statutory licensing regime).

The Act makes it a criminal offence for a person to carry on a non-bank financial business or money services business unless it is a BVI business company or foreign company licensed under the Act. Also, according to this document, a licensee is required to comply with certain imperatives especially related to the preparation of financial statements and audit. These requirements are stated in the Act.

Further provisions of the document are related to general supervisory matters - professional indemnity and other insurance, submission of returns and reporting of information to FSC, requirements on market conduct and change of name. The Commission may require licensee to change name under which it carries on business.

The final part of the Act includes miscellaneous provisions which outline the manner of submitting applications for licences, maintenance and inspection of a register of licensees, electronic filing, etc. The two Schedules of the Act are dealing with modifications to the Act and the Financial Services Commission Act, 2001, and the applicable penalties to the offences outlined in the Act.

The Commission Warns Investors on Forex Currency Trading Frauds

The BVI FSC has issued an advisory warning to investors to beware them of Foreign Exchange Currency Trading Frauds. The warning issued under Section 4 (1) (1) of the Financial Services Commission Act, 2001, informs the public that the entities professing to offer high yield and low risk investment opportunities from investments in foreign currency contracts “are normally scams”. In the opinion of the Commission, these entities may look like a new sophisticated form of investment opportunities, but in reality these are financial frauds “especially perpetrated on retail customers”.

The Commission explains that Forex scams may be widely advertised, and the customers are told that they will obtain tens of thousands of dollars in a few weeks or months. After the currency trading firms tell the customers that they can or should trade in the interbank market, or that they will do so on their behalf, customers' money is diverted or simply stolen.

It is noted in the document that the interbank market does not usually include individual or retail customers, and the claims on the possibility of trading in this market should therefore be treated with extreme caution. The public is asked to note a number of warning signs that can point at foreign exchange scam, and not to invest in them.

The BVI FSC warns that if the companies do not inform customers on the risks involved, or even mislead them, then they would be involved in illegal schemes.

Ralph O'Neal Signs TIEA with France, BVI having talks with Netherlands

Last week, the Prime Minister of the British Virgin Islands Ralph O'Neal signed Tax Information Exchange Agreement with France. The signing of this TIEA which had been already announced in the beginning of June brings their number for BVI to eleven, while twelve are required by OECD in its report on tax transparency and information exchange standards.

The tax agreement with France was signed by BVI Prime Minister and French Budget Minister Eric Woerth who commented that the signing of the agreement was “further evidence of the British Virgin Islands' willingness to implement the OECD principles of transparency and information exchange.”

It is worth saying that in a press conference before the document signing O'Neal talked on territory's intention to be removed from the OECD grey list. He said that the last needed agreement will be signed soon, but BVI will continue negotiations with other countries like Germany, Austria, Brazil, Mexico, Argentina, Canada and as many countries as they will make contact with.

Another related information from Europe: The tax minister of Netherlands Jan Kees de Jager said on June 25, 2009 that his country has reached agreement with Switzerland on exchange of tax and banking information. He also mentioned that he already agreed deals with Belgium and Luxembourg, Bermuda, Guernsey and Jersey. Currently the talks are ongoing with the authorities of the British Virgin Islands, Cayman Islands and Singapore.

The Dutch minister commented the already signed tax agreement with Switzerland saying that “the measure on exchanging financial information is part of a revision of the tax treaty between the Netherlands and Switzerland.”