MOU with ESMA Signed by 25 European Securities Regulators

According to the press release issued by the British Virgin Islands Financial Services Commission, twenty-five European securities regulators signed Memorandum of Understanding (MOU) concerning consultation, cooperation and the exchange of information related to the supervision of Alternative Investment Fund Managers with the BVI FSC.

The MOU signed in May 2013 was negotiated and approved by European Securities and Markets Authority (ESMA), and provided for the supervision of alternative investment funds, including hedge funds, private equity funds and real estate funds. The signings ensure that the BVI Mutual Fund Industry will be able to market its products within the European Union.

It was stated in the press release that the Commission had been negotiating with ESMA since April 2012, and through its participation in the process, is confident that the MOU represents a balanced approach, and is pleased to have executed the agreements which demonstrate the recognition and importance of BVI funds in the global industry.

Brian Obvi,
Offshore Analyst

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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 FSC Signs Agreement with the European Securities and Markets Authority

The European Securities and Markets Authority (ESMA) has approved the co-operation agreement between the British Virgin Islands Financial Services Commission and EU securities regulators. The Memorandum of Understanding allows the BVI Mutual Fund Industry to market its products in the European Union and to EU investors. It provides for the supervision of alternative investment funds, including hedge funds, private equity funds and real estate funds.

 

Before signing the MOU with the ESMA, the Financial Services Commission had discussions with it concerning the European Union’s Alternative Investment Fund Managers (AIFMs) Directive, the draft version of which was issued by the European Commission in 2009, and which is focused on creating a comprehensive regulatory and supervisory framework as well as common regulatory standards for all European AIFMs.

 

The Memorandum of Understanding between the BVI FSC and ESMA is to a large extent based on the IOSCO Multilateral Memorandum of Understanding. The Commission has been in negotiations with ESMA since April last year.

 

It is said in the press release published by the Commission that “the MOU between the FSC and EU securities regulators is further evidence that the FSC remains committed to fulfilling its international obligations relating to information exchange and combating illicit activity that may involve the use of regulated financial services structures. In addition, it demonstrates the recognition and importance of BVI funds in the global funds industry.”

 

Managing Director/CEO of the FSC Robert Mathavious said in his comments that “the Commission looks forward to working with ESMA and the EU countries ensuring that the BVI continues its commitment to meeting its international obligations and standards.”

 

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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BVI and Other Financial Centres Sign Up for UK Strategy to Enhance Tax Transparency

UK Chancellor of the Exchequer George Osborne welcomed the news that British Overseas Territories with significant financial industry sector, among them the Cayman Islands, the British Virgin Islands, Anguilla, Bermuda, Montserrat and the Turks and Caicos Islands, signed up for the UK government’s strategy on global tax transparency. This strategy will allow these financial centres to automatically share information bilaterally with the UK, and multilaterally with the G5 countries - the UK, France, Germany, Italy and Spain. 

Under the agreement, much greater levels of information about bank accounts, including those held by trusts, will be exchanged, marking a turning point in the fight against tax evasion and illicit finance. The parties involved in the agreement will know the names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts. This will increase the level of international transparency and will make it much harder for people to escape paying taxes.

This year, Britain’s Prime Minister David Cameron identified tax transparency as a key priority for the summit of the G8. The jurisdictions, including BVI, have also committed to take action to ensure they are at the forefront of transparency on BVI company ownership. Osborne has invited other countries to join the initiative.

Brian Obvi,
Offshore Analyst

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BVI FSC Publishes Advisory Warning on the Belarus Order, 2011

The British Virgin Islands Financial Services Commission issued advisory warning, informing on the publication of The Belarus (Restrictive Measures) (Overseas Territories) Order, 2011.

By this notice, The Belarus (Restrictive Measures) (Overseas Territories) Order, 2006 has been revoked, and notice is further given of the Belarus (Restrictive Measures) (Overseas Territories) Order, 2011 which has been amended by the Belarus (Restrictive Measures) (Overseas Territories) (Amendment) Order, 2011.

These Orders give effect to restrictive measures adopted by the European Union in respect of Belarus, which include prohibition on the supply and delivery of arms and related material, the freezing of the funds and economic resources, and prohibition on making funds and economic resources available to persons or entities listed in Annex I and IA to the Council Regulation. This information is published on the EU website at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:134:0001:0011:EN:PDF.

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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BVI Ranked First in the Region for Best Quality of Life

In a report which was recently released by FDI Intelligence, a division of the Financial Times of London, the British Virgin Islands was ranked in the top first place in the list of countries of the Caribbean and Central America.

The report was published based on data compiled by the division of the Financial Times ans scored by an independent judging panel. Judging criteria for the category, which the BVI was the first, was based on multiple factors including life expectancy, infant mortality, unemployment rate, GDP per capita, crime and secondary enrollment rate.

Neil Blyden, chairman of the British Virgin Islands Tourist Board, said in his comments on the BVI ranking: "We are pleased to receive this recognition and we look forward to sharing these wonderful attributes with visitors to the destination... From our pristine beaches and exhilarating natural attractions to our friendly people, award-winning cuisine and outstanding accommodations, the BVI is a destination made for such superlatives."

Brian Obvi,
Offshore Analyst

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BVI Financial Investigation Agency Signed MOUs with Six Countries

The British Virgin Islands Financial Investigation Agency (BVI FIA) has signed six Memoranda of Understanding (MOU) with the Financial Intelligence Units of the following countries: Russia, Moldova, Macedonia, Poland, Australia and Montenegro. On behalf of the BVI FIA, the MOUs were signed by its Director Mr Errol George.



The MOUs were signed with the purpose to foster cooperation between the BVI FIA and the Financial Intelligence Units from other countries, which are all members of the Egmont Group of Financial Intelligence Units, with respect to the exchange of financial information and intelligence in support of the investigation and prosecution of persons suspected of money laundering and/or terrorism financing.



The Memoranda of Understanding were signed at the 19th Egmont Group's Plenary held in Yerevan, Armenia on July 11-15, 2011.

Brian Obvi,
Offshore Analyst

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BVI signed TIEA with Czech Republic

On June 13, the British Virgin Islands has signed a tax information exchange agreement (TIEA) with the Czech Republic. The Agreement was signed in Prague, the BVI was represented by the BVI's Deputy Premier and Minister of Health and Social Development Dancia Penn, and the Czech Republic was represented by First Deputy Minister Ladislav Mincic.

The parties also agreed to a Protocol setting out that no prejudicial or restrictive measures will be applied to residents or nationals based on harmful tax practices.

The statement issued jointly by the governments of the British Virgin Islands and the Czech Republic, included the following: “The Czech Republic and BVI have long been active in international efforts in the fight against financial crimes and each share a common commitment to develop and comply with international standards on money laundering, terrorist financing and financial regulation. The Czech Republic recognises the BVI government's reputation as a constructive and co-operative member of the international community with a globally integrated and responsible finance centre.”

The TIEA signed by the BVI and the Czech Republic provides for the exchange of information by request on civil and criminal tax matters, in accordance with the OECD standards. This is already the twenty first Tax Information Exchange Agreement signed by the British Virgin Islands, the previous one was concluded with the Republic of India.

Brian Obvi,
Offshore Analyst

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BVI Among Most Popular Offshore Destinations for Czech Businessmen

Czech firm SMART Office & Companies stated that in 2010 there was more than double growth in the interest of Czech entrepreneurs in buying foreign ready-made companies, compared to last year.

It was also said that the most popular countries for offshore companies are British Virgin Islands and Seychelles. The interest of entrepreneurs to the British Virgin Islands has grown by 172% in 2010 as compared to the previous year (87 235 companies), and the interest to Seychelles has grown by 94% (119 231 companies).

The BVI, Seychelles and Cyprus are among offshore jurisdictions where tax system is most advantageous for Czech businessmen.

For next year, Smart Companies expects a growth of interest in traditional offshore tax havens, and in Asian jurisdictions – Hong Kong, Singapore and India.

Brian Obvi,
Offshore Analyst

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Approval of Alternative Investment Fund Managers Directive to Launch Fund Industry in BVI

The Alternative Investment Fund Managers Directive, final terms of which were approved by the European Parliament on November 11, 2010, allows for the distribution of non-EU funds to professional investors in the European Union. There are two methods of distribution, one of them, the private-placement regime, has been traditional in the EU for non-EU funds, and it will remain in place until 2018. It is proposed that in 2015 it will transition to allow full access to EU passport marketing regime to non-EU funds on the same terms as EU funds. EU funds will become eligible for a passport in 2013. This method, along with the alternative method of the EU marketing passport system, will be subject to similar conditions. These conditions include the need for supervisory co-operation agreements between the regulator of the EU member state in which a fund is being marketed and the regulator of both the fund manager and the fund.

Walkers, the leading international financial centre law firm, welcomed the confirmation of the Alternative Investment Fund Managers Directive and the removal of uncertainty for non-EU fund managers marketing non-EU funds in the European Union. According to Walkers, this is a very positive development for investment funds industry in the BVI, Cayman Islands and Jersey. Rod Palmer, partner and Global Head of Investment Funds with Walkers, said that "The confirmation that non-EU fund managers will be able to continue marketing Cayman Islands, BVI and Jersey funds to professional European investors is excellent news for the industry."

Richard May, Walker's partner based in the BVI, said that the Cayman Islands, BVI and Jersey are highly rated by the FATF in respect to their anti-money laundering regimes, so they will not have to make any changes in their funds' operations to comply with the Directive.

Brian Obvi,
Offshore Analyst

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BVI Signed Another TIEA with Portugal

Last week, another Tax Agreement was signed by the British Virgin Islands Government – this time with Portugal. So, the total number of Tax Information Exchange Agreements signed by the BVI was brought to 19.

The agreement was signed at the BVI's London Office by Deputy Premier Dancia Penn and Portugal's Secretary for Tax Affairs, Professor Sérgio Trigo Tavares Vasques.

In a joint declaration, BVI and Portugal stated that the agreement represents a milestone in relations between both countries. It is stated in the document that “Portugal and BVI have long been active in international efforts in the fight against financial crimes and each share a common commitment to develop and comply with international standards on money laundering, terrorist financing and financial regulation. The Portuguese Republic recognises the BVI Government's reputation as a constructive and co-operative member of the international community with a globally integrated and responsible finance centre.”

Brian Obvi,
Offshore Analyst

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BVI Signed TIEA with Germany

On Tuesday, October 5, the BVI government signed Tax Information Exchange Agreement with Germany. It was signed in London by Dancia Penn, the BVI's Deputy Premier and Minister of Health and Social Development, and Germany's Ambassador to the United Kingdom Georg Boomgaarden. This TIEA became the 18th signed by the British Virgin Islands, the 17th TIEA was signed about a year ago. Based on the OECD model, it allows both parties to request information from tax authorities of the respective countries to assist in tax investigations.

The BVI and Germany signed joint declaration where it is stated: “The Federal Republic of Germany and the British Virgin Islands have long been active in international efforts in the fight against financial crimes and each share a common commitment to develop and comply with international standards on money laundering, terrorist financing and financial regulation. The BVI's cooperation in fostering these international standards enhances its reputation as a globally-integrated and responsible financial centre.”

Also, a protocol was included on the agreement providing that BVI and Germany had no intention to introduce any discriminatory, prejudicial or restrictive measures based on harmful tax practices so long as the agreement is in force and effective.

Brian Obvi,
Offshore Analyst

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BVI Delegation Discussed OCT-EU Relationships

During the recently held OCTA's Ministerial Conference and the 2009 OCT - European Union (EU) Forum held in Brussels, Belgium, the British Virgin Islands and other Overseas Countries and Territories have committed to build closer relationships with the EU.

The BVI delegation was headed by the director of the BVI London Office Mr. Kedrick Malone and consisted of five members, including Assistant Secretaries in the Premier's Office Mrs. Elvia Smith-Maduro and Ms. Najan Christopher, Director of Trade and Consumer Affairs Ms. Lizette George and Political/Public Affairs Officer in the London Office Ms. Averil Henry.

In the speech titled "Future of OCT-EU Relations - Enhancing Competitiveness", Mr. Malone told conference delegates that OCTs agree to the Commission's assessments of the "need to analyse, promote and implement key drivers to global competitiveness which include education of our nations, political stability, a robust information technology structure, and strategies to build on our islands natural assets." He also welcomed the EU's recognition that the British Virgin Islands meets international standards of tax transparency and co-operation, but called for wider international recognition for standards that are already functioning in the BVI and in other OCTs, especially as regards financial services.

The Director of the BVI London Office signed, on behalf of Premier Hon. Ralph T. O´Neal, two important documents from the conference: a political declaration, which confirmed the intention of OCTA countries to build mutually beneficial and comprehensive partnership with the EU, and an administrative resolution which served to outline the mandate of the OCTA Bureau for which the BVI was elected as one of eight members of the executive committee of OCTA.

Brian Obvi,
Offshore Analyst

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BVI Territory Signs TIEA wil Ireland and China

December 7. The British Virgin Islands signed tax information exchange agreement with Ireland. The TIEA is based on a model agreement developed by the OECD, and will allow the British Virgin Islands to send requests to the Revenue Commissioners to obtain and provide information needed in the course of its tax investigations. Also, after this document is signed, the Revenue Commissioners from Ireland may request information from their counterpart in the British Virgin Islands.

The information relevant to Ireland's tax investigation issues in most cases would concern the bank accounts or the beneficial ownership of companies or trusts.

Another TIEA was concluded between the BVI and China, signed by BVI Premier and Minister of Finance, Ralph O’Neal and Chinese Deputy Commissioner of the State Administration of Taxation, Qian Guanlin.

In his statement after signing the agreements, O'Neal remarked that they were a significant milestone in relations between the Governments of the British Virgin Islands, China and Ireland, and expressed the commitment to examine other areas of mutual co-operation and benefit.

Previous TIEA was concluded by the BVI with the Kingdom of Netherlands in September 2009. With signing of these two agreements, total number of tax exchange agreements signed by the BVI Territory reached 17.

Brian Obvi,
Offshore Analyst

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Ralph O'Neal Signs TIEA with France, BVI having talks with Netherlands

Last week, the Prime Minister of the British Virgin Islands Ralph O'Neal signed Tax Information Exchange Agreement with France. The signing of this TIEA which had been already announced in the beginning of June brings their number for BVI to eleven, while twelve are required by OECD in its report on tax transparency and information exchange standards.

The tax agreement with France was signed by BVI Prime Minister and French Budget Minister Eric Woerth who commented that the signing of the agreement was “further evidence of the British Virgin Islands' willingness to implement the OECD principles of transparency and information exchange.”

It is worth saying that in a press conference before the document signing O'Neal talked on territory's intention to be removed from the OECD grey list. He said that the last needed agreement will be signed soon, but BVI will continue negotiations with other countries like Germany, Austria, Brazil, Mexico, Argentina, Canada and as many countries as they will make contact with.

Another related information from Europe: The tax minister of Netherlands Jan Kees de Jager said on June 25, 2009 that his country has reached agreement with Switzerland on exchange of tax and banking information. He also mentioned that he already agreed deals with Belgium and Luxembourg, Bermuda, Guernsey and Jersey. Currently the talks are ongoing with the authorities of the British Virgin Islands, Cayman Islands and Singapore.

The Dutch minister commented the already signed tax agreement with Switzerland saying that “the measure on exchanging financial information is part of a revision of the tax treaty between the Netherlands and Switzerland.”

Brian Obvi,
Offshore Analyst

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BVI premier going to France to sign tax agreement

On June 9, the Premier of the British Virgin Islands Ralph O'Neal reported during press conference about his plans to make visit to France, in order to sign Tax Information Exchange Agreement with French government. After the agreement with France will be signed, the number of TIEAs signed by the Territory will be already 11. So, the British Virgin Islands will come closer to the recommendations stated in the report issued by the Organisation for Economic Cooperation and Development and concerning tax transparency, and the new international tax standard of 12 tax treaties signed by each jurisdiction, established during the G-20 summit in April.

Ralph O'Neal stated in his comments that, after negotiations with France are complete and the TIEA signed, the BVI will continue to pursue similar agreements with other OECD countries in order to fully comply with the new standards, and be moved from the “grey” to the “white” list of jurisdictions. Some weeks ago, BVI Government signed tax treaties with the group of Nordic countries.

During the same press conference Premier was asked by media on the effects of the global financial crisis of the financial sector of the territory. He answered that the BVI Government is still “keeping a close eye on the Financial Sector”, but he did not say how many companies have been removed from the BVI IBC Register. He explained that the number of companies to be liquidated seems not to increase, but added that liquidation statistics solely cannot give information on how many companies in the industry have been affected.

Brian Obvi,
Offshore Analyst

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OECS Heads Talk on the Results of the Meeting

OECS Heads of Government have summarized the results of the 49th OECS Meeting in BVI, which was named a watershed in the historical evolution of the organisation. The leaders of the countries of the organization stated its enhanced international profile: in recent times, new relationships have been or are formed, including that at the regional level with Brazil, Venezuela, Austria, Turkey, Spain, Mexico, Cuba, France, the US Virgin Islands, the EU organisation, Puerto Rico and Trinidad and Tobago.

During the meeting, the Governor of the US Virgin Islands was engaged in discussions on closer functional co-operation with other countries of the organisation. The Heads of Governments have mandated the OECS Secretariat to work along with the USVI Administration to complete a Memorandum of Understanding in order to facilitate the closer ties.

OECS Heads of Government confirmed their commitment to the ongoing process of deepening the regional integration movement, and stated that the inauguration of the OECS Economic Union will take place on June 18 2010. The Economic Union public education campaign, which has already been started in several countries, will give OECS nationals an opportunity to comment on and make inputs into a draft OECS Economic Union Treaty. The amended draft Treaty will go before national parliaments in Member States for ratification.

Brian Obvi,
Offshore Analyst

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BVI Government Signs Tax Treaties with Nordic Countries

On May 18, 2009, the British Virgin Islands has signed bilateral tax information exchange agreements (TIEAs), as well as the series of commercial agreements, with the Nordic group of countries at Iceland's Embassy in Denmark. The agreements require the BVI to make available information relating to criminal or civil tax matters, and are said to reflect all governments' shared commitment to implement the Organisation for Economic Co-operation and Development principles of transparency and effective exchange of information. On behalf of the government of the BVI, the agreements were signed by Minister of Health and Social Development Dancia Penn, and Kristian Jensen, the Danish Minister of Taxation, and Ambassadors and senor representatives of Faroes, Finland, Greenland, Iceland, Norway and Sweden signed the agreements on behalf of their respective countries.

Now it can be assumed that the territory has become closer to getting off the “grey” list of international offshore centres, issued by the OECD - the list of countries that have not yet fully complied with rules on sharing tax information. BVI Premier Ralph O'Neal has said in his comments that the country will sign tax agreements with France and New Zealand, and then move to the so-called white list of fully compliant offshore jurisdictions.

Also, the BVI and the Nordic countries have signed commercial agreements concerning the avoidance of double taxation for enterprises operating ships or aircraft, and mutual agreement procedures and agreements for the avoidance of double taxation with respect to individuals. The governments of all countries which have signed the agreements have also stated that, while the TIEAs are in force, neither party will introduce any discriminatory, prejudicial or restrictive measures based on harmful tax practices.

Brian Obvi,
Offshore Analyst

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