By Mellica McPherson
“I assure you we will work hand in glove,” Lord Ahmad of Wimbledon, Minister of State at the Foreign and Commonwealth Office said during his two-day visit to the Territory on repeated occasions.
The Minister’s visit came amidst uncertainty about the Territory’s economic future –considering the United Kingdom’s parliamentary push for a public register of beneficial ownership by December 2020. Additionally, the visit was aimed at emphasizing the UK’s support in the recovery effort and readiness to lend help during this hurricane season.
During a media briefing on 31 July members of the media targeted their questions on the subject of the register of beneficial ownership, echoing the unease and uncertainty the subject poses here.
Lord Ahmad repeatedly emphasized that the situation was not caused by the United Kingdom Government, but it rather is the implementation of a parliamentary decision. The Minister said, “The main context of what happened is the Government did not want to be in this position. the United Kingdom Government position is very clear we did not want to legislate for public registers. I acknowledged the important work that is being done here in the British Virgin Islands, elsewhere as well.”
The fact that the 2020 deadline only applies to British Overseas Territories like the BVI and not the Crown Dependencies was also addressed by Lord Ahmad who said that the reason the Crown Dependencies were not included was because the amendment that dealt with Crown Dependencies did not carry the support of the Parliament. “I just want to make it very clear that there was a distinction — what the Government’s position is and what government decided. However, parliament is sovereign and what the government is now doing is carrying out the will of parliament,” he explained.
Bringing the point back to where the BVI was at the moment as it relates to grappling with the fact the parliamentary decision has a propensity to affect the financial services sector which brings in 60 percent of the Territory’s revenues, Lord Ahmad said about the December 2020 deadline: “If there has not been the public register then we are required under that legislation to introduce an Order in Council. Now in the interim period I assure you we will work very much hand in glove with the different Overseas Territories; as I have indicated to the government here, in the Cayman Islands and Bermuda to ensure that we look at detail, and mitigate certain concerns,” he said.
The UK Minister stressed that he is not insensitive to the Territory’s worry about the industry and noted that he has two decades of professional financial services experience. Lord Ahmad stated, “As I have said to the respective financial services sectors you know I get it, I was in financial services for 20 years before I joined the government and we would work also…to mitigate and arrest the concerns of financial services.”
With seventeen months to go before the December 2020 deadline the Minister is urging that the BVI work closely with the UK to ensure that the process and effects are soft. “The important thing is to have an open discussion about what the requirements of the legislation are, and see how we can actually work with the BVI Government and the industry to address some of the concern they have.”
He further announced that the Territory is not forecast to lose revenue from the implementation of the register: “as I have also said to the industry today – I have not seen, except for some anecdotal evidence of, there hasn’t been this suggested major flight of assets for example from the BVI,” Lord Ahmad stated.
He added, “Indeed, when you look at some of the statistics you actually see jurisdictions such as the Cayman and the British Virgin Islands actually attracting a greater number of accounts…undoubtedly because this isn’t a level playing field – I accept that principle, but from an international perspective what I can talk about is what the United Kingdom Government would be doing. It is our view that public registers should be an international standard and we will be using international forum wherever we may be to ensure that that objective is also pursued.”
While in the Territory Lord Ahmad met with representatives of the financial services sector and said that they expressed concern that the establishment of the register will hurt business. “I think some of the concerns of the other jurisdictions being chosen as the jurisdiction of choice and what I said to them and we have had an extensive discussion but I think the main principal of this is one – an open communication with the British Government and indeed that with the BVI Government,” the UK Minister said.
“Secondly the importance of ensuring that if they see evidence …that there is a movement away from certain jurisdictions such as the BVI and Caymans to share that evidence with us. There is also an important role for the financial services industries themselves – I found this while I was standing up for the overseas territories stating their positive role. We need to see here from the industry itself a very loud and clear narrative and message on what are their concerns; and that needs to also be heard across not just here in the BVI but elsewhere as well,” the UK Minister added.