Mrs. Rosemarie Flax of Mossack Fonseca & Co. (B.V.I.) Ltd

Offshore Sector Worried About BVI Collapse

G7 countries, OECD and FSF are pressuring the territory into tightening International Business Companies and offshore business laws and there is growing concern of a significant number of the Trust Companies that operate in the British Virgin Islands about the possibility that the Government may adopt legislative changes that will harm the off-shore business that has brought so much prosperity to the islands during the last sixteen years.

Mrs. Rosemarie Flax of Mossack Fonseca & Co. (B.V.I.) Ltd., yesterday commented about the situation. She indicated that "we are going through a very critical stage, and it is imperative that the Government takes into account the views of service providers to the industry, otherwise we will be faced with a situation where many clients will be left with no choice but to re-domicile their International Business Companies to other jurisdictions with legislation that is more flexible and more user friendly".

Mrs. Flax mentioned that "it is outrageous for the OECD and other International organizations to pressure the BVI to change its legislation, particularly on matters related to how bearer shares may be held, when in fact the United States, Luxembourg and Switzerland and several other OECD members permit the issuance of bearer shares without any restrictions whatsoever".

Mrs. Flax is especially concerned about the loss of jobs and revenue to the Government, particularly at this present time when the BVI has few other alternatives for sustaining its economic growth. She added that "Mr. Ramon Fonseca of Mossack Fonseca & Co. and Jaime Alerman of Alerman, Cordero, Galindo & Lee Trust (B.V.I.) Ltd., two of the largest Panamanian owned Trust Companies operating in the B.V.I., attended the meeting of the B.V.I. Association of Registered Agents held here on Wednesday of this week and they indicated that they have been in touch with many of the leading European and Asian bankers, attorneys, accountants and trust companies from which they receive the bulk of their business. Unfortunately, a consensus existed among them to move their business elsewhere depending on the outcome of the pending amendment to the IBC Act".

Similar concerns and even stronger views were expressed by other executives of the offshore financial sector. A Panamanian lawyer from another BVI trust corporation told The Island Sun that the scaling down of operations in the BVI will result in "economical loss to our BVI branch and that's simply tragic." "Some colleagues and politicians are saying that these pressures and changes are happening everywhere in the world, but it's not true and I do not understand why the BVI is taking the lead if other countries are not caving in."