After an extensive discussions that spanned more than a year, on Friday, Premier and Minister for Finance Dr. the Hon. D. Orlando Smith announced that his Government and the United Kingdom Government agreed to a platform that will act in lieu of the contentious central registry of the beneficial owners of companies.
In 2013 the UK Government called for its Overseas Territories (OTs) and Crown Dependencies (CDs) to follow its lead and establish central registries of beneficial owners of companies. The UK also requested that these registries be made publicly available.
The main aim of the registry was to ensure that the BVI Government was aware of who beneficially owns the companies registered in the Territory. The idea was also to permit the sharing of information with competent authorities and law enforcement in a very timely manner when necessary. However, a disagreement arose from the fact that the registry was expected to be made public.
After many talks on 8 April Premier Smith announced that a favourable resolution was reached about such a sensitive matter. The BVI Leader told reporters: “This afternoon, I am pleased to announce that after several rounds of technical discussions and exchanges between BVI and United Kingdom (UK) law enforcement authorities since the 2015 Joint Ministerial Council (JMC), the Government of the British Virgin Islands and UK Government have reached an agreement to enhance cooperation between our respective law enforcement authorities in the fight against international financial crime.”
“Earlier today, I have agreed to sign an Exchange of Notes on Beneficial Ownership with the UK that builds on the successful existing relationship and daily exchanges between BVI and UK law enforcement authorities who remain in regular contact.”
The Minister of Finance announced that the agreement also bolsters the BVI’s ongoing international cooperation with other jurisdictions around the world, particularly fellow members of the Egmont Group of Financial Intelligence Units, and is complementary to the jurisdiction’s good standing in meeting its international commitments on tax transparency and anti-corruption under Foreign Account Tax Compliance Act (FATCA), Organisation for Economic Co-operation and Development (OECD), The Financial Action Task Force (FATF) and the United Nations (UN).
As a means of clarifying the difference between this new agreement and what was proposed, Hon. Smith disclosed that in practical terms Government has agreed on the principles and process for improving information exchange with the UK.
“The Exchange of Notes also meets our Joint Ministerial Council (JMC) Communique 2015 commitments with the UK in which we agreed to “further developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purpose of law enforcement” in relation to beneficial ownership,” he explained.
Now that the topic of beneficial ownership has been addressed, the Territory has to meet the requirement’s associated with the recently signed agreement. The ongoing associated tasks were previously mentioned by the BVI Leader in his 21 December 2015 update in the House of Assembly.
In that update, Hon. Smith stated that the relevant AML/CFT legislation has already been amended to effectively require beneficial ownership information to be held in the British Virgin Islands (BVI) from 2016 onward.
Hon. Smith said that the next stage in the development of the Territory’s successful Corporate Service Provider model will be the design which at the time he said would have been done in full consultation with the financial services industry. He said that the model would be a technology based solution that would ensure the timely access and sharing of beneficial ownership information held by Trust and Company Service Providers (TCSPs).
“This step is consistent with the BVI’s record – under successive governments – of keeping pace with evolving standards and thereby ensuring that our regime remains effective. An effective regime is necessary both to attract legitimate business and combat those who may seek to use BVI companies for nefarious purposes,” Premier Smith explained.