Transparency International Urges BVI To Take Action


By Mellica McPherson-Ganda

Transparency International the global civil society organization leading the fight against global corruption mentioned the British Virgin Islands in a 22 November press release.

The press release which was urging regulators such as the BVI Financial Service Commission (FSC) to take action against dirty money and commit to establishing public registries of beneficial ownership. “Transparency International calls on the regulators of offshore secrecy havens to live up to their promise to take action against dirty money from passing through their financial systems and commit to establishing public registries of beneficial ownership.”

Despite numerous pleas and correction on the part of the Territory to labelling of “secrecy haven”, the press release still made such mention as it noted that the BVI will be attending a meeting in Chile on 29 November.

In using the term, Transparency International said: “The Group of International Finance Center Supervisors or GIFCS (formerly known as the Offshore Group of Banking Supervisors) is made up of the financial watchdogs of twenty secrecy havens, including the British Virgin Islands, Panama and the Cayman Islands. They are meeting in Chile on 29 November.”

The April Panama Papers scandal was also mentioned in the press release which noted that the issue prompted agenda discussion on the prevention of a reoccurrence: “In April the GIFCS members agreed to provide plans at the Chile meeting to strengthen their oversight of financial enablers like Mossack Fonseca, the firm at the heart of the Panama Papers disclosures. The Panama Papers revealed how secretly owned companies in offshore havens are used for financial crime, corruption and tax evasion,” the document said.

In further reference to the Panama scandal, Cobus de Swardt, Managing Director of Transparency International said: “Now is the time for real action that goes far beyond commitments on paper and that actually takes serious and enforceable steps to stop the corrupt. The scale and number of Panama Papers stories was unprecedented, yet it is clear they represent just a tiny fraction of the ongoing abuses enabled by secrecy in the global financial system.”

It was disclosed that the organization wrote to the offshore financial supervisors including the FSC last week asking them to publish their action plans to tackle abuses of corporate secrecy, publish how they plan to monitor their commitments, and commit to introduce central and public registries of the real owners of companies registered in their jurisdictions.

The press release also claimed that jurisdictions such as the BVI, and 19 others “hold almost 10 percent of global international banking assets, according to their own estimates.”

Additionally, it was disclosed that in 2014, the group of supervisors published an oversight standard for its members, specifically aimed at providers of secretly owned shell companies and offshore trusts. However, it was noted that members will only be required to become “largely compliant” with this self-established benchmark by the year 2019.

“Given their outsized role in the global financial system, the oversight of the secret company providers operating in these jurisdictions must urgently become more effective or abuses like those uncovered by the Panama Papers will continue,” Transparency International stated.


BVI Comments on Press Release

In response to queries from The Island Sun newspaper in relation to the Transparency International press release the Corporate Services Division of the British Virgin Islands Financial Services Commission confirmed that the BVI is a member of the Group of International Financial Centre Supervisors (GIFCS) and that the Territory will be represented at the plenary meeting that will be held in Chile on 29 November.

As it relates to the letter which Transparency International said it sent to the BVI and others, the FSC said: “Transparency International (TI) sent a standard letter to many jurisdictions/regulators, including the FSC, in anticipation of the GIFCS event in Chile.  It is not uncommon for regulatory bodies around the world, like the FSC, to receive requests from third party NGOs. Requests from these entities are reviewed and if action is deemed appropriate and necessary, we take it.”