BVI Premier Confirms Support of G8 Tax Decisions

Last week, Premier and Minister of Finance of the British Virgin Islands Orlando Smith returned from London and gave his comments on G8 Tax Statement, confirming his support of the UK government’s global agenda on tax, transparency and trade, and his agreement to take an active part in the new initiative of multilateral automatic tax information exchange agreed upon by the UK, Germany, France, Spain and Italy. The BVI Premier also confirmed the plans to prepare national actions to meet the FATF standards on beneficial ownership, and to join the Multilateral Convention on Mutual Assistance on Tax Matters.

Orlando Smith noted in his comments: “In the debate about tax and transparency the fact that the BVI already has stronger financial regulation for trust and corporate service providers, as well as rules regarding beneficial ownership than many countries in the G8 itself, has not been adequately appreciated… For many years we have implemented the highest international standards on transparency, accountability and information exchange on tax matters, as set out by the OECD. The BVI will continue to be a constructive partner in evolving and setting the highest standards of regulation.”

Brian Obvi,
Offshore Analyst

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BVI Premier Takes Part in Pre-G8 Meetings with UK Prime Minister

Premier and Minister of Finance of the British Virgin Islands, Orlando Smith, has accepted the invitation to attend two meetings in London on June 15.

These meetings are hosted by UK Prime Minister David Cameron before the G8 meeting. During the first meeting, the BVI Premier is having an open consultation with the UK Prime Minister, together with leaders from all UK Overseas Territories and Crown Dependencies, while the second meeting is the discussion on the key issues of the G8 summit, including tax, trade and transparency, and involves a range of stakeholders, including representatives from Overseas Territories and Crown Dependencies.

The BVI Premier said in a letter sent to David Cameron that the jurisdiction will in principle commit to joining the Multilateral Convention on Mutual Assistance on Tax Matters - a multilateral agreement having the aim to promote international cooperation to combat tax evasion and aggressive tax avoidance.

Speaking about the meeting, the BVI Premier Dr Orlando Smith welcomed the invitation from David Cameron for consultation, and expressed Government’s support for the G8 agenda on tax, trade and transparency and trust that the G8 members will see the value of, and accept the need for, establishing global standards."

Brian Obvi,
Offshore Analyst

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BVI Signed TIEA with Canada

Last week, the British Virgin Islands government has signed TIEA with Canada. This tax information exchange agreement became the 24th for the BVI territory, allowing for the exchange of information by request on criminal and other tax matters in accordance with the procedures.

The TIEA was signed by the BVI Premier and Minister of finance, Dr Orlando Smith, and by the High Commissioner for Canada, Gordon Campbell from the Canadian side.

The Premier Dr Orlando Smith welcomed the agreement, and also, during his speech at the signing ceremony, which coincided with the Caribbean Council Reception, stated that the British Virgin Islands is unequivocally against tax evasion, fraud, money laundering and any forms of illegal activity, and supports UK strategy and UK Prime Minister’s agenda for the G8 summit. The Premier took the opportunity to reinforce the association the BVI has with the UK and welcome the spirit of cooperation between the countries.

Brian Obvi,
Offshore Analyst

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Premier Smith Hosting Chairman of OCTA Organisation

The chairman of the Overseas Countries and Territories Association and president of the Territorial Council of St Pierre and Miquelon Stéphane Artano visited the territory of the British Virgin Islands, as part of the regional familiarisation mission to the Caribbean countries as the OCTA chairman. This visit to the BVI will help to enhance its relationship with the overseas countries and territories of the European Union (OCT-EU).

Premier of the British Virgin Islands Dr Orlando Smith, who hosted OCTA chairman, will assume the chairmanship of OCTA in December 2013. During his visit to the BVI, Artano had the purpose to personally familiarise himself with the BVI, as well as to inform Smith of his green growth agenda for the OCTs. Also, the director of the International Affairs Secretariat, Sylvia Moses, informed that “the OCTA chairman would like to discuss Premier Smith’s views on the revision of the Overseas Association Decision (OAD) and its programming regulations; the OCT regional funding envelope; and regional programming under the 11th European Development Fund.” 

According to Sylvia Moses, the talks between the premier of the BVI and OCTA chairman were to focus on innovation in economic and environmental policies for all overseas territories. Moses said that Artano will address common issues and interests among OCTs, including tourism, fisheries and the internet communications.

The British Virgin Islands is vice president of OCTA organisation, as well as the co-chair of the OCTA/EU Financial Services Partnership Working Party that brings together technical experts from the EU and OCTs to discuss financial services related matters.

Brian Obvi,
Offshore Analyst

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Opposition Comments on Budget Debates

Opposition Member and First District Representative Hon. Andrew A. Fahie noted in his comments on budget of the Territory that the Opposition did its best during the recent budget debates in the Fifth Sitting of the Second Session of the Second House of Assembly held on December 17 and 18, 2012. He said that the Opposition tried to save the British Virgin Islands from certain projects that are being done “in a highly questionable manner”, but he did not specify what kind of projects these were.

During the budget debates, Hon. Christopher criticized the airport extension project and especially the fact that full cost of it was not given.

According to Hon. Fahie, “The Budget process also clearly proved from the figures provided by the Ministry of Finance that the last Administration did not leave the country broke; however, although the empirical data clearly states such, the current Administration continues with the same old Marketing plan that the VIP left the country broke.”

Hon. Fahie concluded: “Overall we did our best and will continue to do our best to help this Administration to understand that it has to better prepare our people for what is ahead.”

Brian Obvi,
Offshore Analyst

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New UK Minister’s First Official Visit to the BVI

Mark Simmonds, the UK Minister for the Overseas Territories, who was appointed at his post in September 2012, has chosen the British Virgin Islands as the place for his first visit. During his visit on October 22-24, he had joint press conference with BVI Premier and Minister for Finance, Hon. Dr. D. Orlando Smith and Governor Boyd McCleary, where he talked about some aspects of the UK Government’s views about the Virgin Islands.

Mr. Mark Simmonds stated that during meetings with the BVI Premier and his colleagues he discussed such matters as good governance, financial management and economic planning in keeping with the White Paper issued by the British Government. He said: "I have had some extremely good discussions with the Premier and his Ministers and others in my short time here in the BVI. I have been impressed by the progress that is being made in responsible and prudent financial management in the fact that the Financial Management Act has been passed and the procurement processes are now in tune with international standards and that is a sign of a very progressive and determined Government."

Mr. Simmonds also had a private conversation with the Opposition Leader Hon. Ralph T. O´Neal. The Opposition continues to talk about the restrictive nature of the protocols, and about the need for their renegotiation. However, Mr. Simmonds considers the protocols are right, and should not be renegotiated.

After visiting the British Virgin Islands, the UK Minister departed for Anguilla.

Brian Obvi,
Offshore Analyst

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Commission Publishes Restrictive Measures Concerning Iran and Libya

The British Virgin Islands Financial Services Commission has published Advisory Warnings concerning the requirement for the public to comply with the requirements of The Iran (Restrictive Measures) (Overseas Territories) Order 2011, and The Libya (Restrictive Measures) (Overseas Territories) (Amendment) Order 2011.

The Order concerning Iran came into force on 16 December, 2011, and was made as a result of the European Union in Council Decision 2011/235/CFSP on 12 April, 2011, calling upon member states to freeze the funds and economic resources, of certain persons responsible for human rights violation in Iran. The Amendment Order on Libya came into force of 18 November, 2011, as a result of the United Nations Security Council Resolution 2009 (2011) adopted on 16 September, 2011, which called to apply certain measures to give effect to decisions of that Council in relation to Libya.

The Amended Orders include the full list of designated persons in each of the two countries to whom the measures concern.

Brian Obvi,
Offshore Analyst

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BVI Government Plans to Concentrate on Financial Services and Tourism

Premier and Minister of Finance Dr. D. Orlando Smith has said in his New Year's message on Facebook that in developing the economy of the British Virgin Islands there would be two major traditional pillars – tourism and financial services. He added that the BVI government “will also focus on supporting our small businesses because keeping them afloat is critical to our economic well-being.”

Premier Smith also spoke about the challenges which are to be responded this year: “We have challenges ahead but with those challenges come new opportunities for us to break away from old ways of thinking and forge new paths for ourselves as a people and as a territory.”

Brian Obvi,
Offshore Analyst

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UK Government Strengthens Relationship with Overseas Territories

The UK's Foreign and Commonwealth Office (FCO) highlighted progress made in strengthening its relationship with the Overseas Territories, including British Virgin Islands.

The consultations that were held during the Overseas Territories Consultative Council (OTCC) were focused on the forthcoming White Paper on enhancing the UK's relationship with Overseas Territories, on strengthening the Overseas Territories' international financial centres and stimulating economic growth in the jurisdictions. According to the FCO, the meetings also covered such issues as good governance, financial management, economic planning and taxation policy.

The FCO noted that 2011 was a “landmark year for Overseas Territories”.

Brian Obvi,
Offshore Analyst

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Annual OTCC Meeting to be Held in London

During the Overseas Territories Consultative Council (OTCC) meeting, which is held annually in London since 1999, and this year will be held on 23-24 November, the UK government will discuss new strategy for its Overseas Territories.

The meeting will be hosted by Henry Bellingham, Foreign Office Minister for the Overseas Territories. It will be visited by premiers, chief ministers and elected representatives from UK Overseas Territories. There will also be ministers from the Departments for International Development; Transport; Environment; Energy and Climate Change; the Treasury; Home Office; Ministry of Defence; Culture, Media and Sport; and Business, Innovation and Skills.

Speaking on the event, Bellingham said: “I look forward to discussing with Territory leaders their ideas for the development of our partnership which will help us develop our thinking for the White Paper on the Overseas Territories that we intend to publish next year."

During the OTCC meeting, the leaders and elected representatives will attend a reception hosted by the Commonwealth Parliamentary Association, and will have bilateral meetings with Bellingham. From the British Virgin Islands, the OTCC meeting will be attended by the newly elected Premier Dr Orlando Smith.

Brian Obvi,
Offshore Analyst

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BVI General Elections Won by Opposition

This week, it was announced by election officials that the main opposition National Democratic Party (NDP) had won the November 7 general elections in the British Virgin Islands territory. NDP received 9 of 13 parliamentary seats, while the party of outgoing Premier Ralph O'Neal won 4 seats, down from 11 in the previous Parliament.

The NDP, led by Dr. Orlando Smith who held the premier office in 2003-2007, promised to safeguard the sectors of financial services and tourism, which are especially important for country's economy.

Voter turnout was reported to about 75 percent of the 12,600 voters.

Former Premier and the leader of Virgin Islands Party (VIP), in a public speech has congratulated the newly elected Premier, Hon. Dr. Orlando Smith. He said that this is not the first time that he has been in the opposition, and that he looks forward to working with the new National Democratic Party Government in the new House of Assembly.

Brian Obvi,
Offshore Analyst

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BVI FSC Published Press Releases on the Tunisia and Libya (Restrictive Measures) Orders

The British Virgin Islands Financial Services Commission advised the members of the public that The Tunisia (Restrictive Measures) (Overseas Territories) Order 2011 came into force on 18 March, 2011, and The Libya (Restrictive Measures) (Overseas Territories) Order 2011 (the “Order”) came into force on 9 April, 2011.

The Order on Tunisia was made as a result of the European Union in Council Decision 2011/72/CFSP on 31 January, 2011 and implemented in the European Union Council Regulation (EU) No. 101/2011 that was adopted on 4 February, 2011 and called upon member states to introduce restrictive measures on certain persons, entities and bodies responsible for the misappropriation of Tunisian State funds. The measures stated in the Order include: prohibition on making available funds, financial assets or economic resources to designated persons, entities and bodies, freezing of these funds, and their disclosure by financial institutions. By virtue of Schedule 1 of the Order, it is extended to the Virgin Islands.

The Libya (Restrictive Measures) (Overseas Territories) Order 2011 was made as a result of the United Nations Security Council Resolution 1970 (2011) adopted on 26 February, 2011 and Resolution 1973 (2011) adopted on 17 March, 2011 which called upon member states to apply certain measures to give effect to decisions of that Council in relation to Libya. The Order introduced restrictive measures in respect on Libya as a result of the continuing serious violations of human rights and international humanitarian law in the country. Among the measures there is a prohibition on the supply or export of arms, and on making available funds, financial assets or economic resources to designated persons and entities. The Order is extended to the Virgin Islands by virtue of Schedules 1 and 2.

Brian Obvi,
Offshore Analyst

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BVI Premier Visits OECS Special Meeting

Premier and Minister of Finance in the British Virgin Islands, Hon. Ralph T. O'Neal, has visited a special one-day meeting of the Organisation of Eastern Caribbean States (OECS) Authority in Antigua. The main focus of the meeting are the contributions of OECS member states, other agenda items are the future staff and skill requirements at the OECS Commission, the financing of the OECS Economic Union Organs, along with the resources deployed in the overseas diplomatic and technical missions.

During his visit, the Premier is accompanied by Ms. Najan Christopher, the Assistant Secretary in the Premier's Office (External Affairs), and the Premier's Private Secretary, Ms. Marsha Gumbs.

The British Virgin Islands is an associate member of the Organization of Eastern Caribbean States since November 1984. Other members are Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines and Montserrat. Anguilla, as well as the British Virgin Islands, is an associate member of the OECS.

Brian Obvi,
Offshore Analyst

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BVI Premier Speaking on BVI Business Opportunities

Last week, 2011 BVI Business Outlook conference was held at the Scrub Island Resort, under the theme "Embracing the New Normal - Rising to the challenges of a more competitive and regulated global economy". This conference was attended by more than 200 delegates from the public and private sectors of the financial services, tourism and telecommunications areas.

BVI Premier and Minister of Finance Hon. Ralph T. O´Neal, OBE, expressed his opinion that it was “quite fitting and timely” that the conference was being held at the beginning of the year, after the “economic uncertainties” of 2010. He also said that “it is no longer business as usual in the Virgin Islands”, and the unique solutions must be found for the unique problems. The Premier named some significant events over the past years that impacted the economic landscape, including the shift of standards that govern cross-border taxation, the exploration of the major financial centers in the world, and the election of the first African-American president in the United States.

The Premier and the Finance Minister said that there are many existing possibilities regarding the future of the BVI territory's economy, but but the established institutions, various legal frameworks, practices and policies “must be robust and sustainable”. He also said that "In the development of our tourism and financial services sectors, we must ensure that it takes place to further the overall development of the Territory. We must also ensure that we are ever conscious of the challenges in the changes that will occur worldwide in those sectors."

Other speakers who made their presentations at the conference included BVI Financial Secretary Mr. Neil Smith, Managing Director of the Financial Services Commission Mr. Robert Mathavious, Executive Director of the BVI International Finance Centre Ms. Sherri Ortiz, and Ms. Haddassah, Director of the BVI Tourist Board. The keynote address was delivered by the former Premier of Bermuda.

Brian Obvi,
Offshore Analyst

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BVI Premier Attends OTCC Meeting in London

Premier Hon. Ralph T. O´Neal has come to London to take part in the annual meeting of the Overseas Territories Consultative Council (OTCC). The delegation of the BVI Premier includes Dr. the Honourable Vincent Scatliffe, Financial Secretary, Mr. Neil Smith, Assistant Secretary for external affairs in the Premier´s Office Ms. Najan Christopher and personal assistant to the Premier Ms. Marsha-Ann Gumbs.

At the OTCC meeting, the questions of UK/OT relationship will be discussed, as well as the issues of financial services and public finance, the questions of passport and identity, and many others.

During his visit, Ralph O'Neal along with heads of UK Overseas Territories will have an audience with Her Majesty Queen Elizabeth II. Also, the BVI Premier will also have a bilateral meeting with Parliamentary Undersecretary of State Hon. Henry Bellingham. Before his return, he will also meet the BVI students in London.

This OTCC Meeting will be the first opportunity for Overseas Territories to meet collectively with the Parliamentary Undersecretary of State and UK Minister for Overseas Territories since the formation of the new government in the UK.

On November 10-12, the BVI Premier also visited the Czech Republic.

Brian Obvi,
Offshore Analyst

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BVI Premier's Meeting with FCO Minister

Henry Bellingham, the Minister for Overseas Territories at the Foreign and Commonwealth Office, met the Premier of the British Virgin Islands Hon. Ralph O'Neal. Among the issues discussed, there were tourism, economic diversification and constitutional relationship. The Minister welcomed measures of the BVI government taken for strengthening the economy of the territory, and welcomed the proposed measures aimed at revenue raising.

The BVI Premier congratulated Mr. Bellingham on his appointment and invited him to visit the British Virgin Islands to receive information about the situation in the territory at first hand. Both the Minister and the Premier agreed that both governments must work together and establish new relationship.

Brian Obvi,
Offshore Analyst

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Orlando Smith Speaks on Government's Achievements

The Leader of the Opposition Dr. Orlando Smith, in his interview on the Virgin Islands Party (VIP) mid term in office and their achievements, stated that one of the major branches of economy of the BVI territory, tourism, is neglected to some extent.

By words of Orlando Smith, the administration of Hon. Premier Ralph O’Neal is not putting enough emphasis on tourism, even taking into account the global economic situation. Dr. Smith stated that the government has not done enough for tourism industry, and the financing of the promotion of the BVI territory was not sufficient.

The Leader of the Opposition also talked about the development of financial services industry, which is as important for BVI as tourism, and which is becoming more challenging with the implementation of new international rules. He named some major achievements of the BVI government in the past year, among them the signing of the Territory's 12th Tax Exchange Information Agreement; he highly appreciated it as a real achievement, and reminded efficient work of the previous administration in establishing an International Affairs Secretariat.

Other successful accomplishments of the Government, in the opinion of the Opposition, were the successful hosting of the 49th Meeting of the OECS Authority, and the construction of the Commercial Court. However, Dr. Smith noted some troubles existing in the British Virgin Islands.

The administration of the Virgin Islands Party was elected exactly two years ago, in August 2007, and now Hon. Ralph O'Neal is to deliver a full speech highlighting Government's achievements. Further comments of the opposition are expected after it.

Brian Obvi,
Offshore Analyst

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BVI Premier Suspends the Director of Tourism Board, Opposition Reacts Sharply

During the last week we could watch the conflict between the premier Ralph O'Neal and the opposition, which arose as a result of premier's decision that Tourism Director Janis Braithwaite-Edwards would be sent on six months leave. Ralph O'Neal, who is also tourism minister, in the announcement made on Saturday July 26 stressed the importance of tourism to the territory, and spoke about his personal involvement in recent months with the Tourist Board and Ms. Braithwaite-Edwards.

By his words, being involved in the work of the Tourist Board, he was able to observe and get a good idea of what was happening in the organization. Mr. O'Neal also added that the new acting chairman of the Tourist Board Terrance Ford has begun an investigation into the status of the organisation, and has found ”many operational and tactical flaws.”

Mr. O'Neal said that “given the desperate economic situation of the world and the serious operational issues plaguing the Tourist Board, there is need for restructuring and reorganizing the Tourist Board, and this cannot be done properly while the present director of tourism is active.”

The announcement has drawn much critics from the opposition's side. Its leader Dr. Orlando Smith reacted sharply to the radio message of Ralph O'Neal, saying that he was really shocked with it. He noted that Tourism Director has not received any verbal or written communication on the subject before the premier made public statement on it.

Dr. Smith also has the experience of work with Ms. Braithwaite-Edwards, when he was tourism minister, and characterized her as trained and qualified, having lots of experience. He said that the premier had no authority to dismiss anybody working at the Tourist Board, because it is the statutory body, and any dismissal would have to come from its chairman.

Hon. Ralph O'Neal already paid attention to financial situation in the BVI Tourist Board, soon after his victory in the elections. Less than a year ago, he banned traveling overseas by employees of the BVI Tourist Board, and addressed the territory's community saying that the organisation needs tighter fiscal management.

Brian Obvi,
Offshore Analyst

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Premier Hon. Ralph T. O'Neal Summarizes Financial Situation in the Territory

Since the time when the Virgin Islands Party (VIP) defeated National Democratic Party (NDP) in general elections 2007, VIP continues to publish information about all the things which could be done better by NDP, which was the ruling party from 2003 till 2007, and which VIP is going to improve now. So far, VIP has touched upon spheres not connected directly to offshore financial industry (health, tourism, building industry), but some of future corrections may be related to the BVI financial services industry.

However, the ruling party is unlikely to criticize the BVI financial services industry, which was not less successful in the past 4 years as in the previous years, also the main regulator – BVI Financial Services Commission – was established in the previous period when VIP was the ruling party – in 2001. Anyhow, in this transitional period after the elections we will follow the process of the change of the ruling party, and how it can influence upon the Financial Services Industry. Now back to the Premier's address.

In his speech of September 19,2007, Premier Hon. Ralph T. O'Neal has addressed BVI community with information on some 'mysteries' that should be unraveled yet.

The main subject matter of Premier's talk was the situation around the project of the Virgin Islands Party Government - the Peebles Hospital. Premier explained that the work with this project came to a full stop after June 16, 2003. On May 2, 2006, the Minister of Finance, Health and Social Development was asked to inform the Honourable House of the names, scope of works and amounts of each contract that was stopped or not allowed to be performed by the Government of BVI.

Further on, the Premier in his speech got more in detail that the firm BCQS was contracted by the preceding Government in 2001, to provide project management services on the new Peebles Hospital Project. The project was placed on hold in order to conduct further financial studies; it was signed at a cost of $3.6 million to be spent over a three year period. At the time when the project was stopped, total amount of more than $1,4 million was already paid – about 50% of the amount of the contract, while only 20% of the actual work was completed. In addition to the sums expended, the closing cost was in the amount of more than $118,000, and the annual cost for services including management for all projects under the Ministry of Health and Welfare was $155,000.

The Virgin Islands Party Government negotiated with an architectural firm of Page Southerland and Page to design and produce the working drawings for the new Peebles Hospital. Hon.Ralph O'Neal noted in his speech that his National Democratic Party paid the same Architectural firm about $3,000,000 to re-design the hospital, while the Virgin Islands Party Government had designed for a total of $75,000,000.

The Premier is going to lay a copy of five development agreements of such a kind on the Table of the House of Assembly. He was informed that before signing these agreements, each prospective investor or developer was required to sign a contract to engage the services of a particular individual, for a fee of $7,500,00 a month.

Hon. Ralph O'Neal added some words about the financial situation concerning the BVI Tourist Board, and looked into the whole financial situation of the territory., saying about the possible deficit of 13,000,000 in 2007. The Premier informed on his intention to have a detailed report of the territory's finances.

Brian Obvi,
Offshore Analyst

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Opposition Leader Makes a Statement

There is some short period that passed after the general elections in the British Virgin Islands, and the National Democratic Party that was ruling party for the last 4 years became an opposition. Now we can say that the NDP and its leader Orlando Smith have granted some kind of rest to the party that won victory in the elections. However, already from this week the NDP has started to perform the functions of opposition. On September 5, 2007, the leader of NDP Orlando Smith has published announcement addressed to BVI community, where he stated that some of the promises made to the people of the territory were not fulfilled.

Among these promises there are the proposal of the Minister of Education concerning free books and free lunches in BVI schools. Mr. Smith noticed that during that time Minister of Education reviewed the proposal given earlier, by implementing more stringent guide lines for accessing the school book program.

Also, Orlando Smith denied the fact he was party to a discussion and agreement with the Metodist Church. Speaking about economy, he said he never informed about BVI experiencing excellent growth of its economy, with a 11% record last year; he also denied some other statements made by some international publications and organizations.

Here is the full version of the statement by leader of the opposition, Orlando Smith.

Brian Obvi,
Offshore Analyst

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