The Economic Substance Company Limited Partnership Amendment Act, which is a major issue for the BVI’s economic future returned to the House of Assembly on 22 January for amendments just as had been predicted by some legislators.
Before the Act was passed on 19 December, during the debate the previous day legislators lamented that the Bill was a depiction of how the goal post is constantly being shifted on financial jurisdictions such as the BVI and they suggested that the shifting was taking place even as they spoke.
This statement held true as Premier and Minister for Finance Dr. the Hon. D. Orlando Smith returned the Act to the House of Assembly to be amended on Tuesday. This amending required an extraordinary move as the Bill was introduced in the middle of the sitting; as opposed to via Order Paper which is the norm. As a result, part of the Standing Order had to be suspended to ensure that the Bill received all three readings on the same day
In order to accommodate the legislation, the Premier had to introduce a motion that suspended two Standing Orders for the purpose of introducing two Bills in the sitting — one being the Economic Substance Company Limited Partnership Amendment Act 2019 and the other the Beneficial Ownership Secure Search System 2019.
Premier Smith in a brief explanation of the unusual action stated that on 19 December last year government brought the Economic Substance Company Limited Partnership Amendment Act which is the principal legislation. He then went on to note the genesis of that legislation. “It was done Madame Speaker after several months of discussing and negotiating that had to be done quickly because of the deadline posed by the EU and to have the requirement the required laws about substance in order to avoid being blacklisted by the EU was by the end of December/ 31 December.”
“It was done rather quickly Madam Speaker. What complicated the matter then as well was that even up to the last moment the EU was making changes in the requirements,” Hon. Smith pointed out.
In fact, the Premier said that the Government was cautioned by its advisors that there would be need for further change and just as mentioned he said that there was need for further changes which resulted in the two Bills being rushed to the House of Assembly on Tuesday.
Hon. Smith during the presentation of the objects and reasons of the Economic Substance Bill said that when the substantive Bill was being done in December there was a recognition that the EU substance argument was changing with new requirements being introduced continuously.
Following the passage of the Act in December the Premier said that Government met with its advisors/consultants who produced a draft following significant discussions with a wide cross section of the industry. This he said formed the Bill that was taken to the House this week.
The Premier explained that among the changes is the part in section two of the new Bill which delays the coming into effect of the amendments to the BOSS Act until 30 June, 2019 or such other date as the Minister may appoint.
Therefore, the amendment was made to the BOSS Act to ensure that it doesn’t come into effect until June 2019, the Premier explained.