One week after the United Kingdom’s Parliament accepted the amendments for an Order in Council to impose public registers of beneficial ownership on the BVI and other Overseas Territories by 2020, concern still looms as it relates to the current state of the BVI economy and the relationship with the United Kingdom. These concerns encompass the recovery development agreement that includes the loan guarantee and expertise facilitation, and the future of the Territory’s economy.
The United Kingdom government has been supportive of the Territory’s recovery efforts and committed to the rebuilding through the Recovery Development Agency which was put in place to help with the management of funds coming in for the recovery and to provide the badly needed technical assistance. Most noteworthy is the UK’s decision to offer a loan guarantee to the Territory which would allow the BVI to borrow substantial sums of money which we need to manage a speedy and successful recovery.
However, Premier and Minister for Finance Dr. the Hon. D. Orlando Smith disclosed to members of the media during a press conference on 2 May that the arrangement might need to be looked at again considering the threat that a public register poses to the BVI’s financial sector and the negative spin-off this will have on the BVI’s economy and its ability to honor obligations.
Considering that this threat affects the economy and proposed recovery loans, Hon. Smith said: “The situation of course now has to be revisited and of course revisited well because our economy is not as buoyant. If it does not remain as buoyant it would be a challenge to be able to satisfy the requirement of significant loans; so we have to revisit the arrangement and based on where we are at the moment, and where we continue to be given what happens now from that discussion in the House of Commons (1 May).”
Meanwhile the BVI Leader assured that as Government reassesses the various scenarios the Territory’s move forward will not be impacted as he announced that the recent UK decision is not an urgent hindrance to the BVI recovery.
“It is not an immediate setback. First of all we do have some funds now, which have been gotten through the Development Bank, which we are actively using as part of the recovery. Secondly we did have some reserves which were accumulated over the years and are being used as part of the recovery. Certainly there are some insurance monies which will come – government structures for example this structure (Administrative Complex) is insured and we did receive a check from the insurance company,” Hon. Smith explained.
As it relates to options outside of loans Hon. Smith mentioned that grants might be in the pipeline and noted that the Agency will still be able to function. “We expect and we know that there are many people out there, organizations who would be willing to donate substantial amount of funds to be able to get the Territory strong. The Agency will still be able to work with all those areas in order to provide the management assistance, the technical assistance to be able to help the economy to grow.”
However, with the 2020 register noose threatening to choke our financial sector Hon. Smith pointed out that there is little justification for this push by the UK. “Even if, let us assume you (UK) took the BVI out of Business – what happens? It offers no benefit to the British Government or the British people because what will simply happen is that the proceeds whatever proceeds they are trying to source will simply go to another Territory, which is not an overseas Territory. So there is no benefit from that point of view it would just be causing a country which is basically one of the overseas territories, which already has a relationship to suffer unnecessarily,” Hon. Smith asked.
Tax havens, tax evasion, the so-called Panama papers and various international scandals relating to tax evasion are a convenient trump card for politicians who need to blame someone, somewhere, somehow – just at random – just to demonize someone else except themselves. They rarely say, that quite a few politicians and politicians’ relatives or fronters are some of the offenders. Nobody talks about the fact that the Panama papers were obtained illegally; but wiki-leaks documents, because they affect politicians the world over, are alleged to have been obtained illegally.
In trying to explain what might have impacted the vilification of the Territory and its financial services industry Hon. Smith suggested that the act is based on negative perceptions. “if something happens you often hear something was owned by a British Virgin Islands company. More often than not when it is all investigated there is nothing illegal that is being done; but there is this perception which is unfortunate – which we have been working to correct and we have worked to correct.”
Nonetheless, Hon. Smith is adamant that this action to create a public register will not cripple the Territory. “We are not going back 40 years. We have been through for several years dealing with the matter of beneficial ownership in our financial services industry for over that time. We will again continue to work with our financial services industry and I am sure that we would come to conclusions that would be able to help us to continue to succeed as a financial services jurisdiction.”