BVI IMMOBILIZES BEARER SHARES

Legislators have enacted a Bill that will provide for the immobilization of Bearer Shares, effective December 31st, 2004.

The International Business Companies (Amendment) Act, 2003 had its Second and Third Readings during the Eleventh Sitting of the Second Session of the Fourteenth Legislative Council of the Virgin Islands on Thursday 17th April 2003.

“We’re amending a bill that in part the fortunes of the country was built on,” said Chief Minister and Minister of Finance the Honourable Ralph T. O’Neal as he moved the bill. He said government had consultations with the private sector.

According to the Chief Minister, with the immobilization of Bearer Shares, all International Business Companies (IBC’s) will be required to establish and maintain a Register of Directors and appoint the first Director within 30 days of the incorporation of the company. Bearer Shares are represented by a certificate that states that the bearer is the owner of the share.

“A new section of the principal act prohibits authorized custodians from transferring bearer shares to anyone other than an authorized custodian…and also for a compulsory Register of Directors,” Chief Minister O’Neal explained. During debate, Opposition Leader Dr. the Hon. Orlando Smith noted that financial services has for several years been one of the twin pillars of the BVI economy. He pointed out that it has however come under considerable strain.

He commended the industry officials who “fight strong to ensure that we maintain a position in this market…this bill is the Financial Services Commission's decision on how to deal with bearer shares; we have full confidence in committee and will support its activities.”

At Large Opposition Member Hon. Ronnie Skelton raised the question about whether the territory was sending a message to officials in the financial services industry that government was “taking legislation and just pushing it down their throats.” He said he hopes it does not seem that the Legislature is passing this bill hurriedly without giving the industry the proper time to submit their comments.

Another opposition Member, Dr. the Hon. Kedrick Pickering raised the question about the possible fallout from the introduction of this bill. “How is it going to affect businesses?”

Attorney General Hon. Cherno Jallow explained that this bill had been lingering for some time. He said the BVI has had “a lot of battles to fight as to why it still maintains this regime…with the BVI being the premier jurisdiction for the incorporation of IBC’s.”

The AG said the BVI continues to undergo one review after the other and is due to undergo another assessment by the Caribbean Financial Action Task Force (CFATF) later this year. He said in the last CFATF assessment, this was one of the issues debated. “So it is critical from an international dimension…it’s a difficult situation, but once on the statute books, we will be in a better position to answer the critics and in credible manner…It is not a subject where everyone can agree, but we’re trying to do the best balancing act we can.”