BVI and Macau Sign TIEAs with Japan

The Ministry of Finance of Japan had agreed on the new Tax Information Exchange Agreements with the British Virgin Islands and Macau, which will provide for the effective exchange of information in compliance with international standards, and for strengthening relations between the countries.

Under the Tax Information Exchange Agreements, the British Virgin Islands and Macau, and Japan from the other side, will share relevant information on request, when there is evidence of any kind of fiscal crime. 

The Japanese Ministry of Finance said that the government is determined to strengthen its tax information exchange network, to contribute to efforts to tackle international tax evasion and abuse.

The Japanese government intends to conclude the agreements with the BVI and Macau as soon as possible. They will be formally signed after the texts are finalized, and they will enter into force, once the countries have completed their domestic ratification procedures.

BVI FSC Issued 29th Volume of Quarterly Statistical Bulletin

Twenty-ninth volume of Quarterly Statistical Bulletin was issued by the British Virgin Islands Financial Services Commission, providing statistics and information on the financial services activities in the territory in the fourth quarter of 2012. According to the statistics of the Registry of Corporate Affairs, 14,783 new companies were incorporated in BVI during this period, as compared to 16,251 companies in the third quarter of 2012, and 12,974 in the fourth quarter of 2011. Cumulative number of companies newly registered in the BVI was 459,005 as at 31 December 2012. In the fourth quarter of 2012, 36 Limited Partnerships and 21 Private Trust Companies were registered.

According to Banking and Fiduciary services statistics, total assets of BVI-registered commercial banks in the fourth quarter of 2012 were $2,472,3mln; deposits were $1,827mln; total shareholders’ equity $400,7mln; net interest income was $44,3mln.

In Investment Business sector, 6 new Investment Business Licences were granted in the reported period. In Mutual Funds sector, 27 new licences were issued, of which 19 are professional and 8 are private licences. The Bulletin includes year-by-year statistics, from the fourth quarter of 2009 to the fourth quarter of 2012, showing the dynamics of how cumulative number of Active Mutual Funds was changing in this period. From Q4 2009 to Q4 2012, the number of Active Public Funds decreased from 216 to 151; the number of private funds decreased from 816 to 577; and the number of professional funds fell from 1,905 to 1,590.
There were 23 Insolvency Practitioners in the British Virgin Islands by the end of the fourth quarter of 2012.

Also, in the fourth quarter of 2012 there were 55 Enforcement Matters in the sector of Legal and Enforcement and International Co-operation. Ongoing Supervision Matters Referred to LSC included 103 matters in Banking and Fiduciary Services, 259 in Investment Business, 139 in Insurance and 10 in Insolvency Services.

Government Investigates Global Leak of Information on BVI Companies

The BVI government is investigating the ways how the US-based International Consortium of Investigative Journalists (ICIJ) received information on BVI companies, which is private. According to BVI Premier and Minister of Finance Dr Orlando Smith, this is an “illicit” leak of information used to attack the BVI financial services industry, which is actually fully compliant with the law and international guidelines.

The names of many BVI offshore company owners have been published by ICIJ, in collaboration with the Guardian newspaper and other international sources. This became the result of the leak of internal files of offshore incorporation agencies in the British Virgin Islands and some other tax havens – one of the biggest information leaks in history, which revealed many individuals and the details of their financial dealings through offshore accounts. 

This leak has already caused global reaction from governments and politicians. For example, Britain’s prime minister David Cameron is under pressure to act against the secretive offshore industry at June's G8 summit, as leaked evidence continued to show that politicians and tycoons from all over the world have used the BVI to hide their funds. Also, this week the European Commission announced an action plan to combat tax fraud and evasion, which was approved by Britain, France, Germany, Italy and Spain.

Orlando Smith said in his statement: "While the overwhelming majority of persons use international financial centres for legitimate purposes, there are those that will abuse the system. Where wrongdoing is discovered, appropriate enforcement action is and will be taken. We continually review our legislative regime to ensure transparency, co-operation and compliance with international standards."