The description of the BVI in Bloomberg Businessweek bears no resemblance to the innovative and forward thinking jurisdiction into which the BVI has developed over recent decades. We appreciate the corrections that have already been made. However, there are still a number of misleading statements and inaccuracies:
- The
concepts of public registers and transparency are conflated. One does
not equate to the other, as recognized by law enforcement authorities.
To clarify, the BVI is not against publicly accessible registers of
beneficial ownership. Our position has always been that the BVI will
adopt such an approach once it becomes the global standard. Currently it
is not. Moreover, the BVI shares company beneficial ownership
information with both its own and U.K. law enforcement authorities.
- Throughout
the article, it is suggested that the BVI is against transparency
stating that the BVI is “one of the most vocal opponents of the
worldwide transparency drive.” This is false. The BVI was an early
adopter of the OECD’s Common Reporting Standard (CRS) for the automatic
exchange of tax information; the BVI adopted and implemented the EU
Directive on the Taxation of Savings Income and has signed 28 tax
information exchange agreements; the BVI has signed a FACTA agreement
with the U.S. and U.K.; the BVI is a member of the BEPS Inclusive
Framework; the BVI is a respected and active participant in all relevant
international bodies including the Financial Action Task Force and
Financial Stability Board regional bodies, the global standard setter
for the securities sector (IOSCO) and the Egmont Group, the global
grouping of 158 Financial Intelligence Units which share expertise and
intelligence to combat money laundering and terrorist financing. The
jurisdiction was one of the first movers when it came to anti money
laundering legislation which has, in turn, benefited other finance
centers. The BVI is therefore clearly and demonstrably a supporter of
initiatives to improve international co-operation in the fight against
financial crime and the sharing of necessary information.
- The
article states the EU has threatened the BVI with ‘blacklisting’. In
fact, the BVI was assessed by the EU alongside 91 other countries,
including the U.S., for the purposes of creating a list of
non-cooperative jurisdictions. Subsequently, the BVI committed to
economic substance requirements and implemented the required
legislation. The BVI has been deemed compliant and is not and was never
on an EU ‘blacklist’.
- The representation of the Beneficial
Ownership Secure Search system (BOSSs) platform fails to take numerous
key points into consideration. For instance, whilst BOSSs is accessible
by only two people, this is done for security of the information and to
close off access. Those who access it are responding to requests. BOSSs
is an innovation that has been widely applauded and recognized by the
U.K. Government as a world class example of its type.
- The
reference to loopholes “allowing, for instance, trusts and corporations
listed on stock exchanges to escape scrutiny” is inaccurate. Having
companies which are owned by listed companies is not a loophole to avoid
disclosure of beneficial ownership information. Listed companies have
many shareholders. Plus, share registers of listed companies are public
documents and therefore easily accessible. The jurisdiction is proud
that blue chip companies listed on the world’s major stock exchanges use
BVI companies within their corporate structures. As far as Trusts are
concerned, again there are no loopholes. If the trustee of a trust is a
BVI company it must be licensed by the Financial Services Commission,
the BVI’s financial services regulator.
- The original article
stated that the cost to incorporate a company with less than 50,000
shares is $450 with the cost to renew the same. This has now been
corrected to state that this is only the Government fee. However, it
must be noted that the government fee can never be the total cost of
incorporation. A BVI business company can only be incorporated through a
licensed corporate services provider which must, through its own due
diligence procedures, identify and confirm the beneficial owner, unlike
the UK for example where no such verification take place. If the
provider fails in this duty it can be severely penalized, with the
removal of its license as the ultimate sanction. This means that the
actual cost of incorporation in the BVI is around $1500 with the cost of
renewal around $700 – significantly more than in the U.K., for example.
The article further states that the BVI hosts around a third of the
world’s offshore companies. This ignores that as of 2017 many more
companies were registered in London (3.9m); Hong Kong (1.34m) and
Delaware (1.18m).
- The mentions of different options for a
public register in the BVI are hearsay. The BVI Government ultimately
decides its position on public registers, no one else.
- Instead of utilizing the content provided by those interviewed who are practicing in the BVI today, the reporter has instead disproportionately relied on tales from the 1970s when the global financial regulatory architecture was in its infancy and attitudes were very different. The information significantly skews the article presenting the BVI in a wholly negative light, taking no account of the contribution the BVI now makes to the global financial regulatory framework.
The BVI was leveled by two catastrophic category five hurricanes only 18 months ago. It should be commended for getting so quickly up on its feet, albeit with continuing infrastructure challenges which we of course recognize and will continue to remedy. We, in the BVI, always try to engage, to inform and educate, even with those who have a different point of view.
Elise Donovan
Chief Executive Officer, BVI Finance