It appears the British Virgin Islands might not have entirely satisfied the European Union (EU) in relation to the recently-passed economic substance legislation, given that Cabinet decided five days ago to seek further services from the two overseas attorneys who drafted the law.
Cabinet in its February 20 meeting approved to pay one of the attorneys an additional sum not exceeding $100,000 to do further work on the said economic substance law.
According to a report on the Cabinet meeting, the extension of the attorney’s contract was being done urgently and was described as a matter of ‘national importance’.
The report said Cabinet “approved the further engagement of Junior Counsel Mr Jack Rivett to continue work in conjunction with and to assist Mr Michael Furness … to draft regulations to the Economic Substance Act, 2018 and assist with ancillary matters.”
“[Cabinet] waived the tender process [to do further work on the law], on an exceptional basis, in relation to the engagement of such counsel in the interests of continuity and on the grounds of national importance and urgency,” the report added.
News that the BVI is seeking further services from the attorneys come on the cusp of a general election whereby the territory might see a new party emerging as government.
This news also comes fewer than a month of the now-dissolved House of Assembly making emergency amendments to the aforesaid law.
Those amendments were passed in local parliament to continue the BVI’s campaign to keep off the European Union’s blacklist of ‘tax haven’ jurisdictions.
The EU’s definition of economic substance has to do with financial services companies setting up physical and appropriately-staffed office spaces in the territory.
The BVI is one of several jurisdictions the EU has opted to target in this regard.
The EU was expected to decide on whether they accepted or was satisfied with the territory’s Economic Substance (Companies and Limited Partnerships) Act by mid-February.
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