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BVI #16 on global Financial Secrecy Index

A section of Tortola

By Davion Smith, BVI News Journalist

The British Virgin Islands has ranked number 16 on the 2018 Financial Secrecy Index.

The Financial Secrecy Index ranks countries according to their secrecy and the magnitude of their nefarious offshore financial activities.

United Kingdom-based financial advocacy group, Tax Justice Network (TJN) published the study this week.

According to the report, the BVI had a relatively high secrecy score of 69 out of 100.

“The secrecy here comes most importantly from the BVI’s lax, flexible, ask-no-questions, see-no-evil company incorporation regime, which allows owners of companies to hide behind ‘nominees’ to achieve strong secrecy, and to set up companies quickly and at low cost,” the TJN said in its report.

It continued: “This supposed ‘efficiency’ of incorporation has translated into carte blanche for BVI companies to hide and facilitate all manner of crimes and abuses worldwide.”

The report went on to blame the UK for doing virtually nothing to regulate the territory.

“The UK ultimately has the power to strike down BVI secrecy legislation, though it chooses not to,” the TJN said.

BVI responsible for tax losses of over $37 billion

The BVI’s relatively high global placement on the secrecy index is because of the territory’s longstanding link to a ‘wave of scandals’, the TJN reasoned.

Among the biggest scandals was the 2016 Panama Papers leak which effectively uncovered how the world’s rich used tax havens to hide their wealth. Panama Papers was a leak of millions of files from the world’s fourth-biggest offshore law firm, Mossack Fonseca.

“Half of the nearly quarter-of-a-million companies set up by Mossack Fonseca that the Panama Papers identified were incorporated in the BVI; the leak could just as well have been called the BVI Papers,” TJN said in its report.

And while citing French economist Gabriel Zucman’s research on global tax evasion, the TJN said the BVI is responsible for global tax losses of $37.5 billion.

BVI in top two Caribbean countries on Index

The 2018 Financial Secrecy Index focuses on 112 jurisdictions.

The BVI is the second highest-placed territory in the Caribbean on the Index. The highest-placed Caribbean country is the Cayman Islands, which is third on the Index behind Switzerland and the United States.

The BVI’s poor ranking in the Financial Secrecy Index comes just over a month after the European Union omitted the BVI from its first-ever tax haven Blacklist.

Reports are that the BVI was shown leniency because of the recent hurricanes, but has until the end of this year to improve its tax policies.

Chart showing BVI’s secrecy rating

Copyright 2018 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.

14 Comments

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  1. Wow says:

    Ask no questions? Is this report from 1990? Did they even bother to check our due diligence and other requirements? So banks are secret organizations too for keeping people’s business PRIVATE??????

    • virgin islander says:

      Say What you all Want But a lot of Us Need to say Thank God For The Anguillan Woman name Lorna Smith OBE our Fist Lady who has worked Tirelessly to bring our Financial services to where it Is Thank you Lorna…..

      • Agreed says:

        She gets a lot of flack but people don’t realize how much she has done and continues to do for this industry, despite all the backlash! She was alongside the great H.L. Stoutt so no surprise that she has a lot to offer this Territory.

  2. Albion says:

    If you think that is a poor result, then you haven’t been paying attention. The Tax Justice Network (TJN) is an anti-tax haven pressure group which publishes “research” to try and pressure Governments in the world to impose sanctions, blacklists and other measures against countries like the BVI.

    In days gone by, the BVI used to be their #1 target for attack, and regularly appeared at the top of their lists as the worst for whatever it was they happened to be “researching”.

    For better or worse, we are no longer a priority for them, and so now they focus their main efforts on other countries.

    Predictably their “research” ignores almost all of the recent developments in offshore centres – registers of beneficial ownership, registration of directors, automatic exchange of tax information. None of these fit their narrative, so they amend their criteria and print highly critical research which promotes their political goals.

  3. ooops says:

    natures little secrests

  4. Foolish says:

    “People fear what they don’t understand!”

    • Be careful!!! says:

      Now if only you would uphold your integrity and accountability. They not do only apply to the funtions of your organization. Go figure!!!

  5. Longshanks says:

    The BVI is ranked #16 on the secrecy index, but is behind Switzerland, Cayman, USA, Hong Kong, Singapore, Luxembourg, Germany, Guernsey and the Netherlands among others.

    Further, if you actually look at the “secrecy score”, the BVI is not actually in the top 50.

    If you then read the report (and have sufficient knowledge to be able to see through what they are saying), you see how twisted the narrative is in order to further the agenda. A fair bit of it is based on plagiarizing Colin Riegels’ article on the history of the IBC Act, and on one piece of fairly creative economic “research” from Zucman (which is itself based on limited figures and extrapolation). As per a review of his book:

    “Zucman acknowledges that his measure is only an estimate. He must rely heavily on just two nations, Switzerland and Luxembourg, since both provide useful statistics about assets and liabilities; most tax havens do not do so. To make up for the missing information, he enlists some indirect measures.” Switzerland and Luxembourg are of course higher on the list of “secretive” jurisdictions than the BVI.

    The reality (which these things never acknowledge) is that the BVI is not a jurisdiction where money is kept, and the days of secrecy simply do not exist, with FATCA and CRS. Confidentiality from the general public is different to secrecy from law enforcement and tax authorities. It is worth noting that the UK has the lowest secrecy score out of any nation listed (inc all the Scandinavian countries etc) – although this score is still bizarrely termed as “moderately secretive” (moderate, usually being a term of relativity, being used in an odd fashion here). Therefore, assuming that the BVI should automatically have to follow the world’s least confidential nation is not exactly fair.

    https://www.financialsecrecyindex.com/PDF/BritishVirginIslands.pdf

  6. disappointed says:

    why does a BVI news site just rehash whatever the TJN rubbish says without any factual information to assess the validity of what those bandits are trying to say. There is plenty of information available to a proper journalist to refute the TJN’s rubbish. See BVI Finance, Tony Travers etc etc

  7. BOSANG says:

    shame and scandal in the family.

  8. bvi strong says:

    We need the esteem to come to our rescue again

  9. vg resident says:

    Fake News. This group that publishes this rubbish has an agenda. This is not a problem for the bVI

    • Longshanks says:

      It is somewhat ont the scale of fake news and it definitely has an agenda, but that doesn’t mean it is not necessarily a problem. We need to tackle it and try to regain control of the narrative. To its credit, BVI finance and Lorna are working hard at this.

  10. Heretic says:

    We are truly a captured state, as the report says. We’re like the man on a market stall selling stolen goods for criminal organizations, defending himself by pointing out that most of his goods aren’t stolen, and look! other stalls sell stolen goods, too!
    So complete is our reliance on what started out as a criminal facilitation enterprise and remains one, dressed up in sophisticated costume, that almost no one locally shows any ethical concern or opposition to the business of selling secrecy (that’s what makes us attractive and it’s not the same as bank privacy) All critics, they tell us, either don’t know anything about the business, or have an evil communist/racist/antiBVI agenda that is so bad, their criticisms don’t even deserve consideration.
    All that dirty money that has and continues to weave through our clever legal webs, it doesn’t actually hurt anyone, anywhere. People in Guinea or Congo don’t get sick and die because their leaders have siphoned billions into ‘private’ BVI companies instead of building a local clinic. And if they do, we don’t care. Delusion and denial – our best defenses
    We make 60% of govt revenues from the exploitation of legal loopholes that could be closed or crippled at any time. It is one of only two economic pillars we have. That makes us extremely vulnerable.
    So we’re ethically compromised and economically vulnerable. Seen from another angle, we’re playing a dirty, very risky game.

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