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Premier Smith yields to UK pressure on Beneficial Ownership Register
Premier Smith made the announcement on Friday April 9, 2016 during a press conference at the Central Administration Complex during which he spoke on the issue of the Panama Papers.
“Earlier today, I have agreed to sign an Exchange of Notes on Beneficial Ownership with the UK that builds on the successful existing relationship and daily exchanges between BVI and UK law enforcement authorities who remain in regular contact,” he stated.
This means that British police will soon be able to access information of offshore companies in British Overseas Territories.
Britain is creating a list that reveals the identities of individuals who benefit from an investment even if it is held in the name of another person. According to The Guardian, Cameron told the House of Commons on Monday April 11, 2016 that all British crown dependencies and overseas territories except Anguilla and Guernsey had already signed up to furnish the information.
These include areas such as the Cayman Islands and [British Virgin Islands], which the UK regard as "hot spots" of offshore activity.
While information from the so-called register of beneficial ownership will not be made public, it will be available to police and law enforcement agencies in Britain and other countries. Companies will be held criminally liable if they fail to stop their employees from facilitating tax evasion.
Critics argue that the Overseas Territories may have been further pressured to sign an Exchange of Notes on Beneficial Ownership with the UK as Cameron seeks to defuse pressure over his tax affairs linked to the so-called Panama Papers.
The UK prime minister has been facing the heat over his handling of information about Panama-based companies, including an offshore trust set up by his late father, Ian Cameron.
Premier Smith defends decision to sign agreement
The agreement also bolsters the VI’s ongoing international cooperation with other jurisdictions around the world, particularly fellow members of the Egmont Group of Financial Intelligence Units, and is complimentary to the jurisdiction’s good standing in meeting our international commitments on tax, transparency and anti-corruption under Foreign Account Tax Compliance Act (FATCA), Organisation for Economic Co-operation and Development (OECD), The Financial Action Task Force (FATF) and the and the United Nations (UN).
“In effect, we have agreed on the principles and process for improving information exchange with the UK,” he said.
According to the Premier, the Exchange of Notes also meets our Joint Ministerial Council (JMC) Communique 2015 commitments with the UK in which we agreed to “further developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purpose of law enforcement” in relation to beneficial ownership.
He said the VI’s long-standing commitment to international standards on tax and transparency, its robust regulatory regime, and enhanced cooperation with the UK underscores the territory's continuous efforts to maintain the integrity of the international financial system.
“As Premier and Minister of Finance, I can assure the public and our international partners, that the BVI will remain a jurisdiction of the highest integrity and a reliable international partner,” he said.
The question was asked whether the signing of the Exchange Notes was in response to the fallout from the Panama Papers leak and its effect on the territory, but he said that this is something that had been in train for a while.
“For some time now, since December 2015, we have been having discussions with the British Government on the matter of beneficial ownership and how it should be kept in the territory. You would know that last year we made some changes in our regulations to require that beneficial ownership be kept in the British Virgin Islands. The discussion on how it would be kept is what is ongoing now.”
The Premier said that while there are a number of processes still to be completed, he has signed the agreement and thus the way forward is much clearer in that there will be a satisfactory system of exchange of information that will be to the benefit of the VI and that will not compromise the industry and facilitate the investigation on tax or anti-terrorism.
Persons opposed to the move
In a statement in the House of Assembly on Thursday, February 12, 2015 Premier Smith told the people of the Virgin Islands that key stakeholders within the territory’s financial and social services sectors did not support the Virgin Islands establishing a Beneficial Ownership central register, preferring the current regime which has been shown to work.
In fact, in the statement at the Third Sitting of the Fourth Session of the Second House of Assembly, Dr Smith, the second Premier of the British Overseas Territory, gave statistics to support his claim. He said some 81% did not support the Register of Beneficial Ownership and 71% of respondents rejected the idea of allowing public access to a Register of Beneficial Ownership.
Premier Smith said some of the key reasons cited against the establishment of a central register essentially related to compliance cost that could actually damage the competitive position of the VI vis-à-vis other international finance centers.
Furthermore, Premier Smith, in standing against what he just agreed to in the United Kingdom at the December 1 and 2 meeting with the VI and other Overseas Territories, told the people that one of his objections then in opposing the Register of Beneficial Ownership, was that he was concerned about data security, the increased potential for fraud and the infringement of constitutional rights of privacy.
Persons flooded our newsroom with calls and emails to ask whether the Premier had betrayed the people of the territory who feel the Register of Beneficial Ownership would compromise the financial services industry.
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42 Responses to “Premier Smith yields to UK pressure on Beneficial Ownership Register”
I really don't see what the big deal is surrounding this issue. Perhaps someone with knowledge of the industry can shed some light on the subject for the rest of us?
"If" we have nothing to hide (which is what everyone seems to be insisting) and companies within the BVI are not knowingly harbouring or in any way assisting tax dodgers, money launderers, and drug lords to hide money, then what is the problem having a register listing all beneficial owners? Once again, THE NAMES WILL NOT BE MADE PUBLIC and will only be accessible by law enforcement and tax agencies.
Obviously, when one considers the Panama Papers leak and the one prior to that, our data security obviously needs a fair amount of improvement. Premier Smith argument that he is concerned about security doesn't really hold water these days.
If the cost of performing due diligence for all offshore companies will make us non-competitive with other districts or hamper our ability to attract ongoing business, T H A T is the main problem we need to address. Perhaps the Brits can lend us a helping hand (for a predetermined number of years) in exchange for our compliance? Surely, we can find the money somewhere. We seem to find money for all sorts of other things that are not nearly as pressing.
Eventually, all districts that do not comply with internationally accepted practices will or should be blacklisted by all other nations that do. That would seem to be the only solution to combat illegal practices. Cut them off as trading partners. Cut off access to their banks for all banks located in compliant regions, and make it illegal to deal with them! Then you would have a law that has some real teeth and a level playing field for the rest of the world.
I realize this is a very likely a simplistic view of a very complicated problem, but what exactly am I missing? Why is this such a huge debacle if we really have nothing to hide?
know about all this prior to moving to a British territory or protectorate? Does the British government have any
brakes or is it a runaway train? Do I have any rights to privacy including financial affairs when I reside in the British
Virgin Islands or other territory? Is it a crime to just be left alone? Has anyone seen Hitler recently, rumor is that he
resides in London half the year and Washington the other half. Man of the world.
Brunch of jokers! Broderick please do your joke. All them foolish so called educated Advisors must Go!
I cant stand weak leadership! My hard earned tax payers money wasting on jokers.
The ship is sinking!!!
trillionaire can't have privacy any more since they think the BVI should not