A concern has been raised as to how the British Virgin Islands will fair when negotiating with the European Union (EU) once Britain breaks away from the EU through a process called Brexit.
“It’s to our disadvantage to be representing ourselves with the European Union, as we speak, right now. It was fine before when Britain was a part of the EU, [but] essentially they’re not [anymore] … I don’t see us standing a chance,” said Opposition legislator Julian Fraser.
He reasoned that the BVI cannot negotiate from a position of strength without the backing of the United Kingdom (UK).
Premier Dr D Orlando Smith has, however, said that the BVI will still have support from Britain even after it (the UK) leaves the EU.
“Discussions are ongoing with other Overseas Territories [and] also with the United Kingdom who we expect will continue to work with the Overseas Territories in representation at the EU, despite Brexit,” Dr Smith said.
Fraser’s concerns come at a time when the EU is being accused of ‘bullying’ the BVI to pass a piece of legislation known as the Economic Substance (Companies and Limited Partnerships) Act. The bill, which the EU said must be implemented by December 31, requires offshore financial services companies to physically set up office spaces in the territory if they are to continue doing business with/through the BVI.
If the BVI fails to comply, it will be added to the EU’s blacklist of tax haven jurisdictions and subjected to diplomatic sanctions.
Legislators from both the government and opposition side of the House have said they fair the economic substance legislation will have unfavourable impacts on the territory’s financial services sector after it has passed.
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