BVI Re-elected for the Caribbean Development & Cooperation Committee

For the third consecutive two-year term, the British Virgin Islands has been re-elected on the Caribbean Development & Cooperation Committee (CDCC), which is a subsidiary body of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

The BVI Premier Andrew Fahie will serve as a Vice-Chair on the board. He commented on this achievement, saying: “I am humbled by our region’s confidence in me, and the BVI as an Associate Member Country of ECLAC, to serve as a Vice-Chair of CDCC during these very challenging times in which we as SIDS (Small Islands Developing States) are all combatting COVID-19, facing an active hurricane season and under intense economic pressure.”

The Premier will also co-chair a proposed Summit of the Associate Members of ECLAC in 2021, where he will discuss the challenges faced by Associate Members, their progress and needed support, to implement the UN 2030 Sustainable Development Agenda that has been impacted by COVID-19 and other developments.

In addition to the BVI, Cuba and Dominica were also elected to serve as Vice-Chairs on the Caribbean Development and Cooperation Committee.

BVI and Seychelles Sign Multilateral Competent Authorities Agreement

According to the new update by OECD, the British Virgin Islands and Seychelles have signed up to the Multilateral Competent Authorities Agreement (MCAA) on country-by-country reporting. The BVI signed up to the pact on July 7, 2019, and Seychelles joined the agreement two days later. 

Country-by-country (CbC) reporting is a standard which requires the disclosure by large multinational groups of some basic items of financial data, usually in each country where the parent is located. Collected information includes the amount of revenue reported, profit before income tax, and income tax paid and accrued, as well as the stated capital, accumulated earnings, number of employees, and tangible assets. The OECD developed the Multilateral Competent Authority Agreement on the Exchange of CbC Reports, enabling their automatic exchange.

According to the OECD's update in the end of August 2019, a total of 82 territories have now signed up to automatically exchange CbC reports.

BVI Urged UK Government to Back Modern Partnership with OTs

At the recent meeting at the House of Commons with Andrew Rosindell, MP, chairman of the the Overseas Territories All Party Parliamentary Group in the UK government, the special representative of the British Virgin Islands urged to support the renewal of partnership with Overseas Territories including BVI.

Benito Wheatley welcomed the position of the UK government stated by the Foreign and Commonwealth Office not to force the OTs to adopt the UK decisions on the Territories in areas of governance “constitutionally devolved to them without their consent”. He added: “It is now time for the UK Parliament to support a renewal of the modern partnership between the UK and Overseas Territories based on the principle of self-governance and we hope there will be no further parliamentary moves to undermine the UK Government position that rejects the use of Orders in Council against the Territories.” 

Wheatley also praised Rosindell for his long-standing support to the Overseas Territories including BVI and for respecting their constitutions. It is known that the UK government is taking steps to mitigate possible adverse effects that Brexit, which is now planned on October 31, can have on the British Virgin Islands. Governor Augustus Jaspert stated that many of the benefits that the BVI currently receives from its association with the EU, including EU funding and trade benefits, would go unchanged when Brexit is finalised - among them.

CDB Issued Regional Report and Economic Forecast for 2018-2019

The Caribbean Development Bank (CDB) said in its regional assessment and economic outlook report that the Caribbean region has grown a substantive rate over the last year, primarily due to tourism growth and hurricane recovery. Financial position of the Caribbean countries mostly remained positive, with decline of the public debt in the region from 67% of GDP in 2017 to 63% in 2018. Debt-to-GDP ratios fell in 13 borrowing member countries, and debt is still over 60% in 11 territories.

The Caribbean development bank forecast economic growth for almost all its member countries, with an average rate of 2%, noting that growth depends also in international trends. The CDB projected that Grenada will have the fastest economic growth in 2019, along with Guyana, Suriname, and Trinidad and Tobago. It is expected that economic growth will continue in the British Virgin Islands, together with continued recovery from hurricanes of 2017. Business services, tourism, construction and agriculture will provide growth in most member countries.

CPA British Islands & Mediterranean Region Invited to Conduct Election Observation Mission in BVI

The Commonwealth Parliamentary Association British Islands and Mediterranean Region (CPA BIMR) was invited by the BVI Governor with approval of the BVI Premier and Leader of the Opposition to conduct an Election Observation Mission (EOM) to the British Virgin Islands in 2019. 

The Mission will observe political campaign, electoral administration, polling and other aspects of BVI elections against international standards, commitments and obligations, as well as BVI legislation. It will issue a preliminary report with initial results within two days upon the elections, and the closing result, which will include recommendations for possible electoral reform, within two months after the elections.

The mission will consist of six members, all of them from different countries, and will be supported by a core team of an election coordinator and two election specialist analysts.

CPA BIMR is one of the nine regions of the network, with its headquarters based in the UK Branch of the Commonwealth Parliamentary Association. Since 2011, the association has been organising short-term Election Observer Missions across the UK Overseas Territories including the British Virgin Islands, Anguilla, Montserrat, Turks and Caicos Islands, Cayman Islands and Jersey. It was also involved in election assessment during the UK General Elections.

UK Government Extending Deadline for Public Registers in BVI

The UK government has given its Overseas Territories including the British Virgin Islands an allowance to continue without implementing the public registers of company beneficial ownership until the year 2023. In fact this is a 3 year extension to the initial deadline set by the United Kingdom in its Sanctions and Anti-Money Laundering Act, which was forcing to implement public registers by the year 2020.

UK Minister responsible for OTs, Lord Tariq Ahmad, gave his comments about the deadline extension: “It is our intention that if by 2020 there is no public register, for whatever territory, we will then issue an Order in Council, which will then have a requirement for an operational public register by 2023.” By his words, the 2023 deadline will give the UK time to advance its mission of making public registers become a global standard. 

The public registers mean that the BVI along with other Overseas Territories will be required to disclose the names of beneficial owners of offshore companies registered in the jurisdictions. The BVI is objecting the implementation of public registers before they become a global standard, as it would place the territory in a disadvantageous position to other countries providing financial services.

BVI Government Appoints Legal Council to Advise on Public Register

In the press briefing held on May 30, BVI Premier and Minister of Finance, Dr Orlando Smith, announced that the government has appointed legal counsel to advise on potential legal issues related to the public register of beneficial ownership imposed by Britain. This appointment followed the UK Sanctions and Anti-Money Laundering Bill which requires Overseas Territories, including the BVI, to make public beneficial ownership of all registered companies. With this Bill, the UK receives the right to implement sanctions on individuals, companies and states, and address money-laundering after the Brexit.

BVI Premier said that the legal team “is confident that the imposition of a public register would raise serious constitutional and human rights issues and would be subject to constitutional challenge.” 

A week earlier, BVI diplomat Benito Wheatley has informed the British government that the UK decision to force public registers of beneficial ownership will negatively impact the jurisdiction’s financial services sector that makes more than 60 percent of government revenue.

BVI Premier and Opposition Speak about UK Amendments

After the discussions with the UK parliamentarians concerning the controversial amendments to the Sanctions and Anti-Money Laundering Bill, BVI Premier Dr Orlando Smith made the statement where he said: “Be in no doubt, that if the UK Parliament proceeds with seeking to impose public registers on the British Virgin Islands, this could fundamentally alter our relationship with the UK and we will take all necessary steps to protect our constitutional rights.”

In his turn, the Opposition Leader Andrew Fahie agreed that this is a “constitutional overreach”, and said that the Opposition and Premier “stand united on protecting the constitutional rights of the British Virgin Islands.” 

The UK amendments impose the requirement for its Overseas Territories including the British Virgin Islands to make public the names of beneficial owners of offshore companies incorporated in the jurisdictions. This could bring harm to the financial services sector which is so important to the BVI, comprising about 60 percent of its annual revenue.

In another press release, the BVI Premier noted that the BVI will not impose public registers unless they are a global standard.

BVI Eligible for Association Membership in the Caribbean Forum

CARIFORUM director has confirmed that the British Virgin Islands is eligible for associate membership in this regional organization which engages in policy dialogue with the European Union on behalf of a number of Caribbean states. Confirmation of BVI eligibility became part of a CARIFORUM regional consultation in Barbados in April, which focused on establishing an effective platform for dialogue between CARIFORUM and French Caribbean Outermost Regions and British and Dutch OCTs.

The BVI will no longer be treated as OCT after the UK exits the European Union in March 2019, so the government of the territory is seeking the way to continue BVI current relationship with the EU through CARIFORUM. Currently member states of CARIFORUM include Antigua and Barbuda, The Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St Kitts and Nevis, Saint Lucia, St Vincent and the Grenadines, Suriname and Trinidad and Tobago. 

The assistant secretary for external affairs in BVI Premier’s Office Christopher said in her comments: “We welcome that associate membership is open to the BVI. This status would give us a more meaningful status in CARIFORUM whereby we can participate in the Caribbean’s policy dialogue with the EU and regional coordination. At the moment we remain an observer.”

BVI and EU co-chair Meeting to Discuss EU Tax List Issues

BVI and European Commission co-chaired the meeting of financial services partnership working party which was held in Belgium between the EU and a number of Overseas Countries and Territories. During the meeting, the EU list of non-cooperative jurisdictions for tax purposes was discussed. From OCT jurisdictions, there were representatives of Aruba, British Virgin Islands, Cayman Islands, Turks and Caicos Islands and some others, from EU, there were the officials from the Directorate General for Tax and Customs Union and Directorate General for International Development and Cooperation. 

Beside the listing process and ongoing procedures, the participants of the meeting also discussed beneficial ownership developments in the EU and OCTs and EU approach to taxation in the digital economy sector. 

BVI London Office director and UK and EU representative Benito Wheatley co-chaired the meeting on behalf of the BVI, and currently is co-chairing the OCT/EU financial services partnership working party. He said in his comments: “It is critical that the EU and OCTs maintain dialogue on tax and other financial services issues to gain a greater understanding of any concerns.”

BVI Gets New Status on EU Tax list

On March 13, 2018, the European Union has made changes to the list of non-cooperative tax jurisdictions: three countries were removed and further three were added to it. Bahrain, the Marshall Islands and Saint Lucia were said by the EU Council to have made commitments to answer the EU’s concerns about them, and the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands were, in their turn, included in the list.

The British Virgin Islands, along with Anguilla, Antigua and Barbuda, and Dominica were added to annex II of the list, which includes territories that have made commitments to reform their tax policies. These jurisdictions are subject to close monitoring. The original list comprised 17 jurisdictions and was announced on December 5, 2017.

BVI Among Major FDI Sources for New Zealand

According to the information of New Zealand’s lobby group, foreign direct investment (ownership of companies) in the country increased by 653% from $15.7 billion in 1989 to $113 billion in 2017. Most assets are owned by businesses from Australia, and the British Virgin Islands also are among the major investors along with the US, Hong Kong, the UK, Japan, Singapore, Netherlands, Canada, Cayman Islands, and a number of other countries.

By words of Bill Rosenberg of the Campaign Against Foreign Control of Aotearoa (CAFCA), "All had over $100m in foreign direct investment in New Zealand. These accounted for 95 per cent of foreign direct investment in New Zealand and Australia alone accounts for 51 per cent. Luxembourg, British Virgin Islands and Cayman Islands are tax havens, and the Netherlands has been used to avoid tax." 

He also said that foreign owned entities keep control of 38% of the share market of New Zealand in 2017, while in 1989 it was 19%. Last year, the Overseas Investment Office approved foreign investments in the country in the amount of $5.3 billion.

British House of Lords Voting Against Public Beneficial Owners Register

The amendment proposal for the Cayman Islands, British Virgin Islands and four other British Overseas Territories to implement public register of beneficial owners behind offshore companies registered in these jurisdiction was rejected in British House of Lords, by 211 to 201. The peers voted during the debate on the proposed Sanctions and Anti-Money Laundering Bill; the public register requirement was for the purposes of “preventing money-laundering”.

The amendment, if accepted, would allow the UK government to demand the offshore countries to provide details of companies’ owners. It was already the fourth time when the idea of public registers was discussed in the House of Lords.

In the opinion of the Conservative member of the Lords who argued against the proposal the law enforcement agencies do not support public registers as they actually don’t help law enforcement. He also noted that the UK overseas countries already shown themselves“extremely efficient in responding to the requests of policing and other agencies”.

Other concerns expressed included the potential identity theft that can be facilitated by the public register of beneficial ownership, as well as possible loss of business in favour of competitors. There were also warnings against legislating for self-governing overseas territories.

UK MP Standing for British Overseas Territories to be Represented in Parliament

The British Conservative member of Parliament, Andrew Rosindell, was speaking for the Friends of the British Overseas Territories in London, saying that the BOTs should have better and equitable parliamentary representation. He also said it was wrong that the British territories are dealt with by the British Foreign and Commonwealth Office (FCO) because they are not foreign.

Rosindell is the chairman of the Friends of the British Overseas Territories and is in a senior position on the various committees relating to the British territories. He is also a long-time defender of the rights of the BOTs, supporting more equity for them in the British family. He has called for the territories to be dealt with by a single UK government department, and noted that in case of disaster, for example a recent hurricane, the British government should act as in case of natural disaster in the UK. 

The Conservative politician and his supporters in the UK suggested that Crown Dependencies of Guernsey, Jersey and the Isle of Man and the Caribbean territories of Bermuda, the Cayman Islands and Turks and Caicos should have one MP each, while the British Virgin Islands, Anguilla and Montserrat should have a shared representative, and the same should be done for Gibraltar, Cyprus Sovereign Base Areas and British Indian Ocean Territory.

CARICOM will Hold Conference to Support its Members

Next month, on November 20-21, the Caribbean Community (CARICOM) will hold a high-level donor conference in the US, with support from the United Nations Development Programme (UNDP). The conference will have the purpose to mobilise international resources for member CARICOM countries devastated by hurricanes, among them Dominica, Antigua & Barbuda, the Bahamas, St Kitts-Nevis, British Virgin Islands, Anguilla, Turks and Caicos Islands and St Martin.

According to the statement issued by CARICOM secretariat, the initiative is “aimed at rebuilding the devastated members as the first climate resilient countries in the world and helping the wider CARICOM region improve its resilience”…”International Development Partners, friendly countries, NGOs, prominent personalities, private sector entities and foundations have been invited. CARICOM heads of government and the Secretaries-General of CARICOM and the United Nations will also participate.”

BVI Strengthens Relations with Association of Caribbean States

BVI London Office director, Benito Wheatley, met with Dr June Soomer, secretary general of the Association of Caribbean States (ACS), in Trinidad to discuss the potential advantages of the ACS to the British Virgin Islands. During the exploratory meeting, Soomer provided summary of Association's core areas, and highlighted benefits of ACS membership for member states and associate members.

The meeting came as BVI Premier Dr Orlando Smith continued to deepen BVI engagement with Latin America and the Caribbean territories to strengthen country's international ties, and position the territory for the future. Wheatley said in his comments on the meeting: “The secretary general provided an excellent overview of the impressive work currently being done by the ACS across a number of areas of importance to the BVI.” 

The main aim of the Association is strengthening of regional co-operation and integration process, its member states include Antigua and Barbuda, Bahamas, Barbados, Belize, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Suriname, Trinidad and Tobago, and Venezuela.

BVI Business Management Consultants May Participate in EU-initiated Projects

Business consultants in the British Virgin Islands, as well as in other Overseas Territories included into the Chapter of the Caribbean Institute of Certified Management Consultants (CICMC), will receive the opportunity to bid on regional and international projects and initiatives under the EU portfolio, after being certified and trained. The OCT chapter of CICMC was launched in the BVI on April 6, driven by CICMC-OCT inductee and the chapter’s first president, Marva Titley-Smith.

BVI Premier and minister of finance, Dr Orlando Smith, said that the initiative is consistent with government's agenda to support and strengthen the small business community in the jurisdiction, and commented: “We will continue to do all that we can to provide an enabling environment for small business to develop and thrive, thereby building a strong economy for the territory.” 

Along with the BVI business consultants, the OCT Chapter of CICMC is open to consultants in Anguilla, Aruba, Bonaire, Cayman Islands, Curacao, Montserrat, Saba, St Barthelme, St Eustatius, St Maarten, the Turks and Caicos Islands.

IMF Issued Document on CARICOM Countries' Tax Reforms

The International Monetary Fund has issued the new paper where informed that CARICOM members including the British Virgin Islands need more tax reform while having benefited from introducing VAT. In the opinion of the IMF, zero-rating of domestic supplies, generous exemptions, low registration thresholds have negative effect on the performance of VAT in the CARICOM countries, which should enhance the efficiency of their regimes.

The IMF also asked CARICOM members to pay closer attention to other major taxes: to simplify personal income tax regimes to simplify compliance and improve compliant rates; to coordinate on the design of corporate income tax systems and to tackle international tax evasion and avoidance. It also urged member countries to implement programs to strengthen IT support, audit capacity and enforcement.

BVI EU Representative Takes Part in Discussions with CARIFORUM and ACP

In the mid of March, BVI EU representative Benito Wheatley had a meeting in Brussels, Belgium with secretary general of the African, Caribbean and Pacific (ACP) group of countries, to discuss the alternative post-Brexit relationship between the British Virgin Islands and the European Union. Wheatley expressed interest of the BVI in establishing close ties with the organization in the future agreements with the EU.

Also, the BVI EU representative attended CARIFORUM ambassadors meetings where discussed BVI plans to engage with the Caribbean states organization and participate in their future arrangements with the EU. Financial services were emphasized as the main area of immediate cooperation, especially concerning Caribbean jurisdictions' ongoing dialogue with the European Union on international tax cooperation. 

Wheatley's discussions with the ACP group of countries and CARIFORUM are in line with BVI Premier's mandate given to BVI EU representative, to explore different options for jurisdiction's relationship with the organization. The meetings in which Wheatley participated on behalf of the BVI were part of Caribbean Tourism Organization's mission to Brussels to discuss with EU stakeholders the impact of Brexit on the Caribbean.

BVI Premier Visited London to Discuss Brexit Impact on OTs

BVI Premier and Minister of Finance Dr Orlando Smith, has completed high level meetings in the United Kingdom. The premier along with other Overseas Territory leaders discussed the impact of Brexit on the territories, during the UK-OT Joint Ministerial Council on European Negotiations, and made a courtesy call on UK Prime Minister.

Also, he attended a number of other meetings including a meeting for OT leaders on beneficial ownership hosted by Home Office Minister of State for Security and Member of Parliament, Ben Wallace. During the meeting, the BVI implementation of beneficial ownership agreements was recognized as the most advanced. 

The BVI premier held meeting with vice chairman of the Conservative Party and Member of Parliament Mark Field, to demonstrate BVI's new system for exchanging beneficial ownership and discuss the priorities of the jurisdiction for Brexit negotiations.