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Premier Smith blasts international media coverage of Financial Services Sector!
It was on April 18, 2016 at the Eighth Sitting of the First Session of the Third House of Assembly that the Virgin Islands (VI) Leader told the HoA “Madam Speaker we are all aware that VI is home to a Financial Services Industry that is of global pre-eminence. The core of this industry is our company incorporation business which is revered the world over as it is used to facilitate a myriad of international business transactions.”
Dr Smith, who many have suggested struggled to give an adequate response to the unfair attacks on the VI's legitimate business, said: “VI’s corporate structures are used from Latin America to Asia, from North America to Europe and everywhere in between.”
He told the HoA that “the importance of what we do as financial services jurisdiction cannot be underestimated…..you see every man, woman and child in this country is touched in some way by the opportunities and value of the industry to our country. The Government's revenues largely depend on this industry which in turn is spent on our economic and social development.”
Unfair attacks
The second term leader of the ruling National Democratic Party admitted that “perhaps the past weeks have been two of the most turbulent weeks in the history of the Virgin Islands financial services industry.”
“This is because, Madam Speaker, the recent so called Panama Papers data leak has cast International Financial Centres in a very negative light with very particular focus on VI.
What happened?
On Monday April 4, 2016 the International Consortium of Investigative Journalists (ICIJ) started to release a number of media stories resulting from a massive amount of data that was illegally obtained from Mossack Fonseca’s office in Panama.
The media stories allege that offshore companies were used to facilitate criminal activity including corruption, money laundering, tax evasion and the likes.
The stories have dominated the mainstream media - both print, electronic, television and virtually every major news service has carried some version of the stories daily.
While the stories initially focused on Panama and Mossack Fonseca, the VI has been directly implicated as a number of companies tied to the allegations were formed in the VI by the Trust Compan, Mossack Fonseca, according to Dr Smith.
He continued, “Madam Speaker, I am gravely concerned by the issues that the stories raise, particularly if the evidence establishes abuse or misuse of VI structures.”
Facts about the VI Offshore FS Sector- Premier Smith
“The VI has always maintained, and I stated as much in this very House on several occasions, that this jurisdiction is only interested in legitimate business. Indeed this is why we have over the past 30 years built a regulatory regime that is of world class standards,” he said.
“It is, therefore, unfortunate and disheartening that much of the coverage has sought to discredit international financial centres such as the VI and failed to acknowledge the high standards of regulation and transparency are in place – all of which are internationally compliant, and in many cases exceed those in 'onshore centres'.
“But Madam Speaker, we also recognise that there are some specific cases alleging wrongdoing that on the surface appear compelling.
“To this end, I have previously announced and reiterate that the Government of the Virgin Islands will establish beyond doubt whether there has been any circumvention of our regulatory framework.”
Premier Smith said the Financial Services Commission, the regulators who are independent of the Government, have already indicated that as soon they became aware of the allegations, an investigation was initiated. The Commission has a fine reputation as a serious, strong and competent regulator and “I am confident that they will take any appropriate action commensurately.”
“Equally, I should make clear that in addition to the fact that the VI actively investigates issues of non-compliance, we work routinely and regularly with foreign competent authorities to detect, prevent and prosecute illegal activities. This circumstance is no different.
“We strongly believe that if individuals are prepared to lie or cheat their way using a VI company; then the VI will do its utmost to detect and prevent this. We will continue to ensure that our laws are enforced and action is taken transparently when we identify any wrongdoing,” said the Premier.
Erroneous coverage by haters overseas
The Premier told the HoA “regrettably much of the coverage failed to acknowledge the fundamental and legitimate role that the VI plays in facilitating the global flow of capital and investments.”
According to the statement from the VI Head of Government, Premier Smith is nevertheless heartened that some of the coverage readily admits that conducting business using offshore companies is not in of itself wrong or illegal.
“I wish to strongly endorse that notion, so let me be clear; it is neither wrong, immoral nor unethical to own, manage or control VI registered companies.
“Madam Speaker, this Honourable House and the people of the the British Virgin Islands should be confident and proud that that the BVI is a jurisdiction of the highest integrity. That is not just mere talk, but rather a well-known fact.”
One of the important outcomes of the stories is that they have sounded a clarion call for greater transparency in the offshore financial services industry.
In his statement Premier Smith told the people, “I am proud to say that VI far exceeds the pack, including many well developed nations as it relates to transparency. It is a fact that is anchored in a longstanding reality that we are a highly regulated jurisdiction that has complied with every rule set by the international standard setters pertaining to transparency and exchange of information for these companies.”
It is vital to note that Premier Smith told the law makers, hence the world, that “our robust system of regulation promotes the highest standard of conduct among our licensees.”
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17 Responses to “Premier Smith blasts international media coverage of Financial Services Sector!”
Well sah, Rip Van Winkle finally found a bark. I wonder who scripted those words for him, Dr. Macky? This should have been your approach from the get-go; let’s hope it's not to late.
There should be no room in this industry for the petty unprofessionalism which sometimes prevail. Give Jack his Jacket and all will be well. BVI needs the industry and the industry needs BVI. It takes two to tango.