£300M loan guarantee deal suffers setback — Premier
Commercial district of Road Town months after the hurricane.
The agreement that will see the United Kingdom granting the BVI a £300 million loan guarantee to finance hurricane recovery has suffered a setback.
Premier Dr D Orlando Smith said this is because of the UK’s controversial policy dictating that the BVI publicize the names and accounts of all beneficial owners of offshore companies registered in the territory.
The policy is predicted to have adverse effects on the territory’s economy.
“If our economy is not as buoyant and does not remain as buoyant, there will be a challenge to satisfy the requirements of significant loans [we borrow]. So, we’ll have to revisit the arrangements [of the UK’s loan guarantee], based on where we are, at the moment,” Premier Smith told journalists at a media conference on Wednesday.
No immediate setbacks to recovery
However, the Premier said the loan guarantee setback will not have any immediate impacts on the current progress of the territory’s recovery.
He said the BVI can continue its recovery efforts with loan funds from the Caribbean Development Bank, as well as from insurance payouts, and public reserved funds.
Premier Smith added: “There are many people out there – many organisations – who would be willing to donate substantial amounts of funds to be able to help us to get the territory restored.”
Editor’s Note:
The UK parliament implemented the aforementioned policy on May 1 as an amendment to its Sanctions and Anti-Money Laundering Bill.
The new policy specifically requires the BVI and other British Overseas Territories to set up ‘public registers’ of beneficial owners by December 2020.
Effectively, beneficial owners are persons who enjoy the benefits of ownership in a company even though the title of the company is in another person’s name.
On another note, the BVI sustained roughly $3.6 billion worth of damage from the September 2017 hurricanes and now needs to borrow to rebuild the territory.
The UK has offered to be a loan guarantor for the BVI, which means the UK will settle all of the BVI’s debts if it defaults on loan repayment. The loan guarantee also enables the BVI to borrow at considerably low interest rates.
The BVI and the UK had finalised, or were in the process of finalising the terms of the loan guarantee when the amended Sanctions and Anti-Money Laundering policy passed in UK parliament this week.
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I have to commend the Premier on his foresight in this matter. He knows the economy is going down the crapper and at least he is keeping the BVI from being buried in another mountain of unsustainable debt.
The day is getting closer. Financial services will no longer be a viable revenue generator and neither will the battered and ignored tourist industry.
If he says one more thing about pressing forward with the airport then you know he is over the edge.
It’s going to get ugly folks.
Blah blah! Every few years when something comes out we hear the bullsh-t about BVI will be done blah blah. The BVI will be just fine, we just need to remain focused and not get caught up in political f—-.
Interesting, we have a flood warning up and the political games rage on. U.K. needs to step in, now and rebuild the BRITISH Virgin Islands.
Think you will find that the UK is as broke as BVI. What do you expect when its territories are facilitating tax avoidance against its taxation systems.
Please do your research. The companies we have registered here DO NOT BANK HERE!!!! So what tax money are we hiding for them???? People do your own research.
Don’t forget unsusthan let entitlement growth. That is big problem I think with this administration.
How many current minister’s names will show upon this disclosure? Are the ministers required unde BVI laws to disclose their financial interests?
See this is why WE THE PPL demand to be included and informed. D——— Premier didn’t see this coming. He is not up to the task of dealing with these people for us IMO. He is a T– and doesn’t understand the UK empire and how they will seize opportunity and exploit us at any convenient opportunity b/c he thinks they still eating out the palm of his hands LMAO.
Are you referring to the current Premier whose repeated refusals to accept help from the UK even during the historical nature inspired darkness visted on us? The same Premier whose not secret leanings and desire for independence and autonomy?
The same Premier who has been villified critcized and crucified for being ” too proud”for saying to the UK no thanks we can do it ourselves?
The biggest detriment to the VI is those like yourself whose intent and purpose is to tear asunder the current Government with lies and false accusations and made up bs. Such is a predictable element in any and all black movement community nation business government etc. Loathsome to say the least.
I couldn’t have said it any better! They tear down their own Territory and then surprised with the others finish the job. What a set of i— we are at times!!
I thought I just read that the UK government will act as a guarantor for the BVI, which makes it a fail safe loan. What’s the fuss about then? Oh yeah, political posturing.
Yes but if we lose tax from reduction in offshore finance we will need to borrow more than so far envisaged.
Just wondering if the Premier is going to distance himself from the First Lady for the remarks made on the BBC about his loving and trustworthy friends, the UK. I hope Mark is still proud of himself as a UK citizen and hope he is wearing his British colors. I am still asking myself what kind of Premier we have in this country. With vision the people shall perish, words of the wise, HLS.
Premier Smith added: “There are many people out there – many organisations – who would be willing to donate substantial amounts of funds to be able to help us to get the territory restored.”
Really…..If that’s the case where are they ? its been over 8 months since Irma and the finances were needed months ago! Pie in the sky as usual….I wouldn’t be surprised if the UK now withdraw the offer of loan guarantor…
Perhaps certain island owning billionaires can finally answer that question about substantial donations
those ppl are the only reason we have had any progress.. the govt was missing in action
Take the loans and let the UK pay them. If the Master wants to control our economy they can pay for it
No bank or organisation will lend now having witnessed how inept the No Direction Party is, can’t even repair the roads or stop the sewage running into the street. 3rd world here we come. Without a vision the people perish and nobody within the NDP has stepped up to show any ounce of leadership…the Doc is actually the best of a useless bunch of self—— e—— not interested in the people.
I don’t agree with the conditions of this guarantee, so good.
even in the midst of a problem, good must come. this was the Lord’s way of telling us.
There is a burden to every good thing, we just have to be willing to work with the burden in order to have the good thing.
the recovery will take longer, that is our burden but we will still be in a position to control our finances (the current govt notwithstanding) and that is the good thing.
In my opinion you commit an error. I can defend the position. Write to me in PM.
“There are many people out there – many organisations – who would be willing to donate substantial amounts of funds to be able to help us to get the territory restored,” Dr. Hon Premier Daniel Orlando Smith, AL and MoF says. Really! Where are the philanthropic organizations that are willingly to come to the BVI aid with hundred of millions of dollars? Are residential billionaires going to come forward and exercise some social responsibility? Billionaires did not become billionaires by giving money away; most are very frugal with their dollars: they try to see how many billions they can make.
Will lenders now be more cautious in lending the BVI money? Will the APR increase because of the increase risk? Will the UK grow more nervous about the BVI capacity and capability to repay loans? Will this nervous concern cause the UK to take pause about the BVI borrowing? Are there pitch dark financial clouds hovering over the BVI? Should BVI residents start their belt tightening? Where does the BVI go from here, what does it do?
I agree Socrates to be honest in my opinion its just far to late to be deciding what to do now….the government is just asleep, spends most of its time pontificating and arguing and its sheer inaction since Irma is bewildering – just look at the state of the high school, the roads, the ferry docks, the sewage, the beaches etc etc…No bank, funder or benefactor will want to lend to the BVI now its just too risky…its only a matter of time before the £300m loan guarantee is withdrawn from the BVI as they just don’t appreciate the UK’s assistance and just disrespect them asking for free money all the time…..then waste it.
Socrates is right – so foolish to even consider launching a legal challenge against this….I thought the Premier said they were ready for this if it happened and had made plans….by making it public that they are considering a challenge it reveals how desperate the Government is and what dire straights financially they really are – this was stupid to do, they should have acted cool and reasoned behind the scenes but no now the whole world knows due to the unfortunate bad publicity how bankrupt and desperate the BVI actually is…Forget about any loans now unless they sell their soul to the Chinese…..The No Direction Party as they seem to be know as now is truly incompetent….
Turnbull was right
The way that the UK deals with its overseas territories is really different from how the US deals with its territories even under the leadership of crazy Donald Trump. hmm