Heads of UK Overseas Territories Discussed Important Issues in CI

Last week, a meeting of leaders of UK overseas territories including Anguilla, Bermuda, British Virgin Islands, the Falkland Islands, Gibraltar and Montserrat was held in the Cayman Islands. This pre-Joint Ministerial Council Meeting last for two days, during which the heads of government exchanged opinions on the issues of relationship between the UK and OTs, and also defined the priority areas to be included on the agenda of the Joint Ministerial Council (JMC) meeting which will take place in London in the end of 2014.

British Virgin Islands Premier Dr Orlando Smith commented, “I am pleased that leaders of the OTs were able to reach consensus on a number of areas that are relevant to all OTs and on which we should engage further dialogue with the UK in the fall of 2014.” He also noted that matters related to financial services will be of the top priority for the Overseas Territories’ engagement with the UK. 

Among the key issues discussed there were economic diversification, global standards for financial regulation accountability and transparency, governance, environment, and others. Financial services being one of the key industries for most of the Overseas Territories, including BVI and Cayman Islands, their leaders affirmed that they aim the global standards of financial regulation, accountability and transparency, and will continue to be responsible financial centres that facilitate global trade and investment.

The JMC meeting in December 2014, which is being hosted by the Foreign and Commonwealth Office (FCO) and will bring together political leaders and representatives of the UK and OT leaders, will have the purpose to implement principles listed in the 2012 White Paper on Security, Success and Sustainability, and to agree at the ministerial level on collective issues between OT governments and UK.

BVI Premier Signed FATCA-related Agreement

The Model 1B intergovernmental agreement (IGA) was signed by the government of the BVI at the Department of Treasury in Washington, DC. According to BVI Premier Dr Orlando Smith who signed the IGA, this is the final step in the current phase of Foreign Account Tax Compliance Act (FATCA) implementation in the British Virgin Islands. Next phase will be creation and issuance of guidance notes that assist financial institutions and other parties in the jurisdiction to determine their requirements under the agreement.

BVI Financial Secretary Neil Smith stated among the key benefits of the IGA that BVI financial institutions have until the end of 2014 to obtain a global intermediary identification number (GIIN). 

The BVI government will issue a draft of the territory’s guidance notes to receive comments from members of the financial services industry. It will be possible to give feedback on the guidance notes also through participating in workshops that will be provided for the industry specialists by KPMG (BVI) Limited. After making sure that the guidance notes will adequately address any BVI-specific situations, they will be updated and amended.

FATCA was enacted in 2010 by the US Government, with the main purpose to combat tax evasion by some US citizens holding their investments in accounts outside of the United States, and requires foreign financial institutions to report to the IRS information on assets of US$50,000 or more held by US taxpayers.

TIEA Signed by BVI and Japan

In June, the BVI government announced the signing of tax information exchange agreement (TIEA) with Japan. The new TIEA, which became 26th tax agreement for the jurisdiction, will come into force on the thirtieth day after completion of the domestic implementation procedures by both parties. In the British Virgin Islands, TIEAs are implemented through subsidiary legislation under the Mutual Legal Assistance (Tax Matters) Act, 2003. 

The BVI-Japan TIEA complies with OECD standards for these agreements, providing for assistance through the exchange of information concerning taxes covered by the TIEA. For BVI, the competent authority is the Financial Secretary or an authority designated by him in writing, for example, the International Tax Authority, and for Japan the competent authority is the Minister of Finance or his authorized representative.