BVI: Remarks By Premier Smith - Building On A Thriving And Sustainable Financial Services Sector

Ladies and Gentlemen of the Media, Good Morning.

On March 12, 2015, I laid a report in the BVI House of Assembly titled “Building on a Thriving and Sustainable Financial Services Sector in the British Virgin Islands”.

At that time, I explained that my Government commissioned the internationally respected consulting firm of McKinsey and Company to develop a pragmatic strategy and implementation plan that would chart a new direction for our financial services industry.

This was in direct response to the challenges threatening our core financial services business, rising international pressures and growing competition.

I am pleased today to share a copy of this Report with you and set out how my Government will implement its recommendations which are critical to the future of this industry and our Territory.

I should also mention at this time that copies of the report are available from the Premier’s Office and will be posted to the Government’s Web site.

I would like to spend a few minutes explaining how we will be implementing the recommendations set out in the report.

As I explained in the House of Assembly, 10 top priority initiatives were agreed for timely implementation from among 40 initiatives identified to further develop and enhance the BVI Financial Services industry.

The report recommended that each of the ten priority areas should have a sponsor. That is, someone at a senior level who is responsible and accountable for developing the specific plans and identifying the actions required to implement each priority initiative.

Some of those sponsors are present here with us this morning and will be able to answer questions you have during the question and answer session.

Let me briefly summarise the ten initiatives and introduce you to the respective sponsors.

1. The first initiative is to revamp the International Finance Centre (IFC) and make it a focused, highly skilled unit that operates in line with international best practice. You would be aware that we have already re-branded the IFC to BVI Finance and are well on the way with this initiative with other measures already on the way. Permanent Secretary Mr. Brodrick Penn is the sponsor of this initiative.
2. The second initiative is to build on the strengths of the Financial Services Commission by strengthening the service culture and organisation to improve process transparency, response time and help provided to customers.  Managing Director of the FSC, Mr. Robert Mathavious is the sponsor of this initiative.
3. The third initiative is to offer Value-Added Services to our product offering by identifying and incentivising top priority companies to attract those services to the jurisdiction in collaboration with the private sector. Mr. Neil Smith, Financial Secretary is the sponsor of this initiative.
4. The forth initiative on Immigration seeks to bring Immigration and labour policies and processes in line with international best practices to attract and retain the necessary skilled labour that will be needed to broaden into and sustain a substantive offering. Attorney Mr. Gerard Farara Q.C. of Farara-Kerins is the sponsor of this initiative.
5. The fifth initiative seeks to Build Local Capability and Talent by strengthening education at the secondary and tertiary levels, developing the Financial Services Institute (FSI) and overhauling internships and scholarship programmes to bolster BVIslander talent to sustain the industry in the long term, and create opportunities for BVIslanders. Mrs. Lorna Smith, Chair of the Financial Services Business Development Committee, is the sponsor of this initiative.
6. The sixth initiative on Business Development is to establish dedicated business development capability to generate new product and customer ideas and strengthen the mandate of the Financial Services Business Development Committee. Permanent Secretary Mr. Brodrick Penn is the sponsor of this initiative.
7. The seventh initiative focuses on Infrastructure and is to help accelerate critical infrastructure projects such as telecommunications and transportation needed to support the development of the economy. Financial Secretary Mr. Neil Smith is the sponsor of this initiative.
8. The eight initiative, Engage the Population is to identify current perceptions of financial services and educate and build awareness and understanding of the importance of financial services to BVI, its impact on our daily lives and its critical role in transforming the prosperity of the Territory. Mrs. Lorna Smith is the sponsor of this initiative.
9. The ninth initiative on Tax Initiatives is to roll out FATCA requirements and lobby France and the Organisation for Economic Co-operation and Development (OECD) to improve compliance ratings and the jurisdiction’s reputation in the international financial services. Mr. Neil Smith is the sponsor of this initiative.
10. The tenth initiative is to establish a dedicated unit staffed by world-class talent reporting at the highest level of government to co-ordinate and drive implementation of the Report’s recommendations across the financial services sector. Mr. Brodrick Penn is the sponsor of this initiative.

As I mentioned before, the sponsors present will be able to answer questions you have regarding the initiatives for which they are responsible.

I mentioned that initiative ten is the establishment of a dedicated unit to drive the implementation of the recommendations of the report.  This is perhaps one of the most critical recommendations as it has responsibility for overseeing the execution of the others.

To initiate this recommendation, my Government has established the Financial Services Implementation Unit (FSIU) under the Premier’s Office.

This unit will be overseen by a Steering Committee chaired by me as Premier and will report directly to Cabinet. The Steering Committee will consist of the initiative sponsors I have mentioned before: Mr. Neil Smith, Mr. Brodrick Penn, Mr. Gerard Farara Q.C., Mrs. Lorna Smith, Mr. Robert Mathavious, Mr. Humphrey Leue and Mr. Michael Riegels, all experienced and highly skilled persons in the financial services area.

The unit will be staffed by six talented professionals and specialists dedicated to the efficient implementation of the output of the various initiatives led by sponsors.

The unit will need a strong, strategic, experienced and dedicated manager to lead the implementation of the plans submitted by the sponsors.

I think I have found such a person in Mr. Kedrick Malone and I am pleased to announce that he will be heading up the Financial Services Implementation Unit. I will formally introduce Mr. Malone shortly and ask him to say a few words.

My Government highly values the work Mr. Malone has started at BVI Finance in helping to set it on a new path. The unit will ensure that there is continuity for that important agency of the financial services family.

I am therefore pleased to announce today that Mr. Julien Johnson, currently the Chief Operating Officer at the Financial Investigation Agency (FIA) with assume the role of Executive Director of BVI Finance immediately to replace Mr. Malone. Mr. Johnson comes with industry experience having worked with the Financial Services Commission.

To ensure a smooth transition and in recognition of the close association between the FSIU and BVI Finance, Mr. Malone and Mr. Johnson will share office premises for the next few months as the unit staffs up its operation

I take this opportunity to congratulate both Mr. Malone and Mr. Johnson and to thank them for taking on these important roles at such a critical time for our financial services industry.

Let me close off my remarks by reminding you of my government’s commitment to this industry this directly accounts for over 60 percent of our Government revenue and upwards of 80 percent if indirect sources are included.

My Government’s commitment to this industry is firm and unwavering.

I am pleased at the bipartisan manner in which it has developed in the Territory and trust that this would continue as we move to implement the recommendations of the Financial Services Consultancy Report.

Solving the issues at hand is vital to the future and longevity of our financial services industry and the livelihood of our community. 

It will require all of us – public and private sectors, government and opposition, local and expatriate practitioners, local and international stakeholders and the entire BVI community – to work together to build a brighter and sustainable future for the Virgin Islands.

Let me end by thanking all of those who have participated in this process. Most of them are listed at the end of the report you will receive.

Let me introduce Mr. Malone and invite him to say a few words after which we will have a question and answer session.

Mr. Malone is no stranger to us and or to public service. He returned to the Territory in November 2014 to take up the role of Executive Director at BVI Finance after serving five years as the Director of the BVI London Office.

My Cabinet felt that his vast experience and talents would best serve the Territory by heading the FSIU and he has agreed to do so.

Mr. Malone is also a former Director of Tourism, former Film Commissioner, and former Deputy Secretary in the then Chief Minister’s Office.

He was a Senior Lecturer in marketing at HLSCC, chaired the BVI Chamber of Commerce and Hotel Association and has chaired a number of national commemorative celebrations in the Territory. His early career included 12 years with the IBM Corporation in New York in management, marketing and systems.

He holds an MBA from the Zicklin School of Business, Baruch College of the City University of New York. I now invite his to say a few words.

Thank you.