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.”
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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