A number of regulations governing the procedures of the House of Assembly were yesterday suspended so legislators could make unscheduled amendments to the Economic Substance Companies and Limited Partnership (Amendment) Act of 2018 — a law only implemented less than a month ago.
The emergency amendments were brought and passed to continue the BVI’s campaign to keep off the European Union’s blacklist of ‘tax haven’ jurisdictions.
In explaining why there came to be amendments only weeks after the initial law was passed, Premier Dr D Orlando Smith said: “The EU — which is the author of the whole substance argument — was changing and introducing new requirements even up until late in the game.”
Premier Smith also said there were some typographical errors in the initial law. These errors were made because of the ‘haste’ in which legislators had passed the law in the first place, Dr Smith said.
No room for legal loopholes
The premier further said there were changes made to the phraseology in sections of the legislation so as to avoid any legal loopholes. These phraseological changes include adding certain words to the legislation.
“The addition of these words makes clear that the legislation is satisfying the fundamental requirements … it is simply clarifying what has been intended.”
The intended purpose of the law, as mandated by the EU, is for financial services companies registered in the BVI to set up physical, appropriately-staffed office spaces in the territory, if they are to continue doing business with/through the BVI.
BOSSs Act also amended
Since financial services companies registered in the BVI before January 1 have until June 30 to start complying with the economic substance requirements, one key amendment to the legislation provides for it (the law) to work in conjunction with the territory’s Beneficial Ownership Secure Search system (BOSSs) Act. Amendments, therefore, also had to be made to this BOSSs Act in Tuesday’s sitting of the House.
For both laws to work hand-in-hand, amendments to the BOSSs Act will not be made come into effect until June 30 — the required deadline for companies to start showing compliance.
Under the BOSSs Act, companies are required to report who is the beneficial owner (the ultimate owner) of that company.
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