The British Virgin Islands recognises and supports the need for transparency in relation to the establishment of corporate entities, including legal arrangements, and is committed to supporting initiatives that seek to establish international standards in that respect.
Consequently, the British Virgin Islands has no difficulty in considering and implementing measures that are established as international standards applicable across the board and to all financial centres irrespective of the group or organization they each belong to or are a part of. This approach underscores Prime Minister Cameron’s position that there “is no point in dealing with tax evasion in one country if the problem is simply displaced to another”. The British Virgin Islands has a good record of international cooperation and this has been confirmed by the IMF in its reviews of the Territory’s financial services regime in 2004 and 2010. The Caribbean Financial Action Task Force (which supervises its member countries for compliance with the FATF standards on money laundering and terrorist financing) has also confirmed the British Virgin Islands international cooperation regime and compliance as robust and effective. In these contexts, it is important to note the following:
(a) The British Virgin Islands is a member of leading international organisations – such as the International Organisation of Securities Commissions (IOSCO), International Association of Insurance Supervisors (IAIS) and Global Forum (GF) – that have as a core of their activity the gathering and sharing of information. Indeed the Virgin Islands was the first jurisdiction admitted to IOSCO membership on the basis of its full compliance with the provisions of that organisation’s Multilateral Memorandum of Understanding;
(b) Various British Virgin Islands legislation have established fit - for - purpose gateway provisions for the receipt and provision of assistance on a mutual legal assistance basis in the areas of law enforcement, regulation , tax and judicial and the respective competent authorities have a good record of collaborating with each other and with international counterparts to facilitate the provision of assistance; The Mutual Legal Assistance (United States of America) Act, 1990, Drug Trafficking Offences Act, 1992, Criminal Justice (International Cooperation) Act, 1993 and Proceeds of Criminal Conduct Act, 1997 provide for assistance in the area of crime and law enforcement; the Financial Services Commission Act, 2001 provides for assistance in regulatory matters; the Mutual Legal Assistance (Tax Matters) Act, 2003 represents the framework for rendering assistance in tax matters; and the Evidence (Proceedings in For eign Jurisdictions) Act (Cap. 24) and Foreign Judgments (Reciprocal Enforcement of Judgments) Act (Cap. 27) deal with assistance in judicial matters.
(c) To date, the British Virgin Islands has concluded 24 Tax Information Exchange Agreements (TIEAs) and is in the process of negotiation with other countries for more TIEAs; the British Virgin Islands reiterates its commitment to negotiate and conclude TIEAs with any country (OECD and non - OECD) that wishes to enter into such an arrangement ;
(d) In order to ensure better coordination and response to tax information exchange matters, the British Virgin Islands established the International Tax Authority (ITA) within the Ministry of Finance with the primary responsibility of facilitating assistance to foreign tax and law enforcement authorities in tax and tax - related matters;
(e) The British Virgin Islands was the first jurisdiction to develop and implement a paper on immobilizing bearer shares in order to remove the anonymity associated with bearer share companies and this regime is well - established and enforced under the BVI Business Companies Act, 2004;
(f) The British Virgin Islands subscribes and adheres to the Statement of Best Practice for Trust and Company Service Providers issued by the then Offshore Group of Banking Supervisors (now transformed into the Group of International Finance Centre Supervisors) and accordingly licences and supervises to high standards all trust and company service providers in the Territory. With this regime in place , no company or legal arrangement can be incorporated , registered or in any way formed unless they do so through a licensed trust and company service provider who is in turn required to obtain and maintain the requisite beneficial ownership information (which requires the identification and verification of the ultimate persons behind the company or legal arrangement). Indeed the British Virgin Islands regime has for many years required licensed service providers to hold information on who really owns and profits from companies and to make that information available to appropriate authorities whenever required;
(g) All licensed trust and company service providers are supervised for their anti - money laundering and terrorist financing obligations, including the availability of beneficial ownership information, and periodic inspections are carried out in respect of the licensees to establish compliance and, where shortcomings are identified, appropriate enforcement action is taken;
(h) The British Virgin Islan ds, in consonance with its long - standing policy of not encouraging or welcoming those who choose to b r eak laws applicable to them, has committed to and is actively engaged in negotiations with the US Treasury in finalizing an Inter - Governmental Agreement (IGA) to facilitate the exchange of tax information; the British Virgin Islands is similarly engaged with Her Majesty’s Treasury and has committed to the G5 Multilateral Pilot Project on the automatic exchange of tax information; This process has been facilitated by the fact that the US Foreign Accounts Tax Compliance Act under which the IGA is being negotiated is of universal application and will not disadvantage the British Virgin Islands as against other jurisdictions. Just as with the USA and UK, the Multilateral Pilot Project will be negotiated and implemented bilaterally.
(i) The British Virgin Islands strongly believes in encouraging and developing a solid partnership with the private sector through which many transactions are conducted in order to sensitise them of current and emerging international standards; the private sector has, over the past years and to date, demonstrated maturity and recognises the positive aspects of compliance with those standards so long as they are applied on a universal basis in order to prevent business arbitrage.
3. The British Virgin Islands pledges to continue along the path of assisting with and supporting the development and implementation of international standards on beneficial ownership information that are of universal application, as opposed to selective application which may result in arbitrage and loss of business. In this vein, the British Virgin Islands commits to reviewing its legislative regime to ensure full compliance with the revised 40 Recommendat ions of the FATF (where this is not already provided for) in relation to the keeping of beneficial ownership information. If at any time in the future this requirement is elevated to a need to maintain such information in a central registry accessible to law enforcement and tax authorities and applied universally, the British Virgin Islands will review its regime accordingly.
4. In recognition of its long - standing policy to support and be a part of promoting international standards to ensure cooperation in all spheres of business and other areas, the British Virgin Islands commits to the following action plan on beneficial ownership information:
(a) Review its legislation and systems, in consultation with its stakeholders, to ensure that where shortcomings ex ist on beneficial ownership information on account of the revised FATF Recommendations 24 and 25 on legal persons and legal arrangements respectively, steps are taken to remedy those shortcomings;
(b) Develop a national risk assessment framework (considered essential for measuring effectiveness and adequately preparing for the fourth round of mutual evaluation on AML/CFT compliance) in consultation with the Joint Anti-money Laundering and Terrorist Financing Committee (JALTFAC) and the Inter-Governmental Committee on Money Laundering and Terrorist Financing (IGC); this is expected to be undertaken and completed in 2014 to be followed by appropriate training to enable the conduct of a proper and effective national risk assessment on a periodic basis;
(c) Further strengthen the current supervisory and inspection regime to ensure that beneficial ownership information is being maintained and properly tested in a manner that assures timely availability to compete nt authorities; this will be on an ongoing basis;
(d) Lend support to international initiatives in relation to any development of new or additional standards on company transparency, including measures to strengthen international cooperation on beneficial ownership information; in this respect, the British Virgin Islands will encourage and support initiatives to promote the adoption of the (OGBS) Statement of Best Practice for Trust and Company Service Providers;
(e) Continue active engagement within the Global Forum in shaping and promoting international standards on tax transparency as well as continue to volunteer the services and expertise of the British Virgin Islands by serving in the Peer Review Group and such other organs from time to time; and
(f) Continue engagement with Her Majesty’s Government in relevant areas of international cooperation with a view to both supporting the UK’s initiatives and protecting the interests of the British Virgin Islands in a fair and consistent manner.
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