By Davion Smith, BVI News Journalist
The Caribbean Community (CARICOM) and the Organisation of Eastern Caribbean States (OECS) have each come to the defence of the BVI and other Overseas Territories, whose financial services sector the United Kingdom parliament has targeted.
The UK parliament convenes today to vote on an amendment to their Sanctions and Anti-Money Laundering Bill.
If the bill passes, it will adversely affect the financial services sector of the British Overseas Territories.
Both CARICOM and the OECS have lambasted the UK for being ‘discriminatory’ to their British territories.
“The OECS wishes to register its strongest opposition to certain provisions of the Sanctions and Anti-Money Laundering Bill, which is now in its final legislative progress in the UK Parliament,” the OECS said in a statement on Monday.
“While we recognize and respect the sovereign right of the UK to determine its national legislation, our concern centres on those provisions which are discriminatory to the BVI … The passage of these provisions effectively disenfranchises the BVI people and will undermine the constitutional relationship between the BVI and the UK.”
The bill, which the OECS describe as ‘contentious’, seeks to force the BVI and other Overseas Territories to reveal the names of beneficial owners of offshore companies registered in the territory.
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.
CARICOM calls for new standards
Meanwhile, CARICOM has called on international regulatory bodies such as the Financial Action Task Force (FATF) and OECD Global Forum to implement new international regulatory standards in areas such as beneficial ownership and tax information exchange.
CARICOM said these standards could be used to govern all financial service providers globally; as opposed to the UK’s ‘unilateral measures’ that only target UK Overseas Territories.
“Such co-operation would be in the best interest of all in the pursuit of a more economically prosperous future, underpinned by international institutions, and where all societies, their internal institutions and peoples are respected,” CARICOM reasoned.
In the meantime, Premier Dr Orlando Smith released a statement on Monday, in an attempt discourage UK parliamentarians from voting in favour of the amendment to the aforementioned bill.
BVI more compliant than UK
He noted the many steps his administration has taken over the years to prevent financial crimes happening in the territory.
He even said the FATF has recognised the BVI as ‘more compliant’ than the United Kingdom in relation to the fight against money laundering and financial terrorism.
“The BVI has met 40 of the 49 FATF requirements for combating money laundering, terrorist financing, and the financing of nuclear arms proliferation. In fact, the BVI is ahead of the United Kingdom, which has met 37 recommendations, and the United States − 39,” the Premier argued.
“The BVI also works with tax authorities worldwide to help them crack down on tax offences. We were an early adopter of the Common Reporting Standard for the automatic exchange of tax information and we provide information under the United States Foreign Accounts Tax Compliance Act. We have adopted and implemented the European Union Directive on the Taxation of Savings Income and have signed 28 tax information exchange agreements. We are also part of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which provides a platform for the exchange of information with over 90 countries worldwide.”
He continued: “The BVI developed the Beneficial Ownership Secure Search System (BOSSs) … BOSSs makes it possible for the beneficial ownership information of BVI companies to be immediately available to BVI authorities, and for onward transmission to United Kingdom law enforcement; if required, within one hour.
How will gov’t respond if UK votes for bill
And while answering questions about how his government will respond if the amendment passes, Dr Smith said: “The vote [today] does not determine the future of the BVI Financial Services Industry and I can assure you that our absolute focus will be on our right to self-determination and the protection of our economy”.
The territory is at risk of losing its competitive edge as a financial services jurisdiction if it starts revealing the names of beneficial owners who register their companies in the BVI.
This may also result in major job losses locally; as the financial services industry accounts for roughly 60 percent of the territory’s annual revenue.
Copyright 2020 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.