BVI Disagrees On Beneficial Ownership Automatic Information Exchange


By Mellica McPherson-Ganda

Sir Henry Pickles, Former UK Cabinet Minister, and appointed Anti-Corruption Champion announced last week, following the UK Anti-Corruption Summit that Her Majesty’s Government will be working closely with the British Virgin Islands on beneficial ownership matters.

Based on the communique from last week’s summit it appears that the matter of beneficial ownership, automatic information exchange, and the establishment of a public registry is central to the United Kingdom’s anti-corruption strategy.

However, the BVI which is a major player in the global Financial Services industry and also a UK Overseas Territory expressed that it will not adopt all of the requirements stipulated in the beneficial ownership arrangement.

This position, while necessary for the Territory, appears unfavourable internationally, and as such was cudgelled in a recent BBC radio broadcast featuring Sir Henry Pickles. While he admitted during the broadcast that the BVI did not accede to all of the requests made in the area of beneficial ownership, he did acknowledge that the Territory has been cooperating.

“My understanding is that they (BVI) have agreed to a number of things we have asked them to do, but what they haven’t done is agreed for it to be automatically shared,” he explained.

In fact, Sir Henry Pickles stated that the UK Government anticipates that 11 new jurisdictions will join the group of 25 already committed to sharing information on true company ownership with each other.

Albeit the BVI has satisfied the request for information sharing, Sir Pickles said that ideally the United Kingdom government wants all of the Overseas Territories and Crown Dependencies to embrace its plan for beneficial ownership.

“We want them to go the whole hog, no one is expecting them at this stage for that to be made public, but it is necessary in order for us to crack down on criminals, on money launderers, on terrorists, on organized crime – that information should be available,” Pickles said.

“I think we are moving into a new era where people will want to trade with the financial centers, but they are gonna want the assurance that they are trading in a honest environment. I think what we expect from the crown dependents is to join in that. We will work very carefully and closely with the British Virgin Islands in order to achieve that.”

He also announced that in little over three weeks, the UK will be the first G20 country to publish beneficial ownership information: “It will be a big game changer. We’ve seen jurisdictions wanting to join in. it is going to be something different. It is going to ensure that the general attitude to global commerce is changing and I think it is best to be at the forefront of this,” he said.

BVI Has its Say in BBC Interview

In the same broadcast Director of BVI London Office, Mr. Benito Wheatley had the opportunity to explain the BVI’s position on the matter.

In response to the BBC’s suggestion that the government of the British Virgin Islands was not invited to the summit because of its refusal to make public beneficial ownership details. Mr. Wheatley said: “Our position is that there should be an international standard if we are to move towards public registers [of beneficial ownership], and what that means is that everyone internationally must move together.”

“BVI has never had a problem with implementing international standards. And, in fact, we will welcome being a part of setting them. What I should make clear is that BVI regulatory regime is very robust. We know much more about who owns and controls companies than many other jurisdictions; and that’s something we are proud of,” the Director of the BVI London Office said.

He added: “The BVI is very proud of the fact that we have a very well regulated jurisdiction upon which we built a successful financial services industry for the last 30 years. Also, we adhere strictly to the rule of law – and English common law is practiced there. The OECD Global Forum has rated us on tax transparency – largely compliant; the same as Germany or the UK. This is a very good record that we want the UK public to be aware [of]– that we’re doing our part; that we are well regulated and will join any international standard that is set. But it has to go through the proper channels and meet the necessary safeguards.”