Local charitable organizations are still trying to comply with the Non-Profit legislation that was passed in the House of Assembly last year. However, Managing Director of the BVI Financial Services Dr. Robert Mathavious said that the slow compliance process is nothing to worry about, and was expected.
At a press conference on 10 April, Dr. Mathavious told reporters: “It (full compliance) is very much a work in progress. A lot of people have come on board, a lot of people are still in the process of trying to make sure that they fully understand, and fully meet the requirements of the legislation.”
He added that the agency that is responsible for registering and sorting that process is still handling registration. Dr. Mathavious said that it is a work in progress, and added: “These are people in a number of cases who have been doing what they have been doing for years before the legislation came in place; so it is a challenge itself for some of them now to amend their procedure to fit in the legislation. That is why it is a work in progress bringing people into compliance…Frankly I don’t think it is any difficulty, it shouldn’t be unusual in the sense that if legislation comes against what people have been doing you have to give them grace period to get into place.”
Speaking in the House of Assembly on 11 October 2012 during the presentation of the objects and reasons for the Non-Profit Organization (NPO) Act, the Minister explained that the Act was necessary as the Government sought to facilitate the ongoing work and contributions of NPOs. The Act provides an appropriate legal and regulatory framework.
Hon. Skelton said that the framework will provide stability and increase public confidence in the work of such organizations. “Furthermore, the government will be supporting initiatives that increase public understanding of the roles and contributions of non-profit organizations. Madame Speaker the bill before us therefore seeks to register and monitor the operations of non-profit organizations in the Virgin Islands. The intent of this bill is to create an environment where non-profit organizations can flourish,” the Minister stated.
Additionally, Hon. Skelton said that the government, through the enacted legislation sought to increase the understanding of philanthropy in the Territory; thereby promoting betterment of the Virgin Islands society while protecting non-profit sectors from terrorist abuse.
He further stated that these important considerations and the administration of non-profit organizations in the Virgin Islands would satisfy the recommendations of the Financial Actions Task Force (FATF) as it relates to money laundering.
The Minister told his colleagues that the passage of the Act would bring the Territory into compliance with international regulatory standards.
The non-profit organizations legislation consists of six parts: Part one provides for the preliminary provisions; while part two provides for the establishment of a non-profit organizations registration board and the functions of the Board.
The NPO board will serve as the executive body to oversee the operations of non-profit organizations in the Virgin Islands and its composition is outlined in section three of the bill.
There is also provision for the FIA to institute inquiries and audits for purposes of carrying out its function where there is a reasonable belief that there is risk of terrorist and money laundering activities. This can be carried out by the organization among other functions
Part five of the Act provides for the obligations of registered non-profit organizations. The NPO would be required to notify the board of any changes in the information provided at the time of registration. Maintaining records of its purposes, objectives and activities and provide financial records explaining transactions inside and outside of the Virgin Islands The NPOs are now expected to submit annual financial statements to the board, and where the gross annual income of an NPO exceeds $250,000, the statement must be certified by a qualified accountant.
Part six of the bill deals with miscellaneous provisions and gives FIA the authority to impose penalties for failing to comply with the requirement of the Act and provides for an appeal process Additionally part six provides for the FIA and board to keep confidential any information related to a non-profit organization except when required by a court or for the purpose of an inquiry under this Act.
Hon. Skelton also explained that this legislation was not applying to organizations licensed under the Banks and Trust Companies Act. He added that with the enactment of this legislation the NPOs will benefit from a significant amount of funding available locally and internationally which can only be disbursed in a well regulated jurisdiction.