The OTCC Meeting in the course of which BVI signed taxation agreements, has been held in the period when the OECD prepared to crackdown on offshore and low-tax financial centres which were still deemed to be “uncooperative”. This was part of plans by the member governments of OECD to further strengthen regulatory safeguards in the global financial system, and followed the publication of parliamentary reports that accused the Foreign and Commonwealth Office of complacency in the monitoring of tax evasion and money laundering risks in certain offshore financial centres.
In the last period, the UK government has experienced the increasing pressure to enforce higher standards of transparency in some of the 14 offshore territories, which are still under British sovereignty, and among then there are British Virgin Islands.
According to the UK Authorities Report on Financial Services Regulation in BVI and other offshore centres, published in May 2008, the regulation standards in the areas such as banking, money laundering, insurance and securities are not as good as those in the Crown Dependencies (Jersey, Guernsey and the Isle of Man).
These claims and submissions were discussed by the BVI and the Cayman Islands, and by some other offshore centres among British dependencies. The offshore jurisdictions argued that they have brought their regulatory standards in accordance with the OECD FATF requirements.
The BVI government informed the Commons Select Committee on Foreign affairs that the claims that the so-called offshore centres are not properly regulated and are a haven for tax evasion, money laundering and terrorist financing, are unfair, and 'too often no effort is made to give recognition to the regulatory advances of such offshore jurisdictions as the BVI.'
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