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Financial Services Sector rocked by decline & Black Listing- SFC Report

- since National Democratic Party took Office in 2011 one of the Virgin Islands’ main economic pillars has been in trouble!
Left: Premier of the Virgin Islands, Dr The Hon D. Orlando Smith. Critics of the ruling National Democratic Party (NDP) Administration continue to preach that they are not good at handling regional and international matters, in particular the Financial Services Sector. Right: Deputy Financial Secretary (DFS) Ms Patlian Johnson told the House Committee that 'between 2014 to 2015, there was a 10% decline in company incorporations and that decline had been occurring annually since 2013.' Photo: VINO/File
Since taking office in 2011 the Virgin Islands Party (VIP) Opposition, civil society and the media have been critical of the NDP’s ability to handle the financial services sector and accuse the current Government of simply reacting to international concerns and not being proactive. Photo: VINO/File
Since taking office in 2011 the Virgin Islands Party (VIP) Opposition, civil society and the media have been critical of the NDP’s ability to handle the financial services sector and accuse the current Government of simply reacting to international concerns and not being proactive. Photo: VINO/File
ROAD TOWN, Tortola, VI- Critics of the ruling National Democratic Party (NDP) Administration continue to preach that the Administration is not good at handling regional and international matters, in particular the Financial Services Sector.

Financial Services Sector going down!

This seems to have been confirmed by the Ministry of Finance during its testimony at the House of Assembly’s Standing Finance Committee (SFC) for the 2016 Appropriation Bill.

Deputy Financial Secretary (DFS) Ms Patlian Johnson told the House Committee that “between 2014 to 2015, there was a 10% decline in company incorporations and that decline had been occurring annually since 2013.”

Ms Johnson also confirmed that the revenue earned for the Financial Services Industry to the Virgin Islands coffers has declined.

When asked by the Leader of the Opposition Hon Julian Fraser RA (R3) to explain the decline, the DFS told the Committee “it was due to competition from other jurisdictions such as the Seychelles and Vanuatu in the South Pacific.”

When asked by the Minister for Education and Culture Hon Myron V. Walwyn what made the South Pacific more attractive, the DFS responded that “these countries processed applications faster.”

Financial Secretary Neil M. Smith also added that “such countries were not as regulated as the VI.”

In addition, the Premier and Minister of Finance Dr The Honourable D. Orlando Smith confessed that the VI had also suffered negative exposure regarding leaks of clients' information “as well as being blacklisted by the French.”

NDP not good for the sector-critics

Since taking office in 2011 the Virgin Islands Party (VIP) Opposition, civil society and the media have been critical of the NDP’s ability to handle the Financial Services Sector and accuse the current Government of simply reacting to international concerns and not being proactive.

One area they cited is that the VIP signed well over 21 Tax Information Exchange Agreements (TIEAs) to help protect the sector from issues like being blacklisted, however, the current NDP Administration has signed less than 10 after almost 5 years in office.

27 Responses to “Financial Services Sector rocked by decline & Black Listing- SFC Report”

  • pat (02/04/2016, 11:08) Like (66) Dislike (13) Reply
    Look how sleeping olando killed the finicial services sector
  • SOS (02/04/2016, 11:45) Like (46) Dislike (9) Reply
    SHIP BVI needs a new/different captain because we are headed straight to the rocks.
    • Boo (02/04/2016, 19:05) Like (21) Dislike (4) Reply
      Bossman SS BVI done scuttled on the rocks long time. Doc "don't have a clue" was fast asleep at the wheel an it ran aground some time ago. While sleeping beauty was at the wheel his deck hands/ministers have been running wild
  • Building Courage (02/04/2016, 12:35) Like (85) Dislike (9) Reply
    Most of you bloggers might get mad for what I have to say, but it has to be said. Reading the comments on the various issues affecting our country today, I am so disappointed to observe how extremely polarizing these comments are for one political party or the other. Very few post comments that present some level of objectivity towards the issues. Taking into account the dynamics of a relatively small community, if we continue to vote and argue this way, the downfall of our country will be our own. Particularly witnessing that neither party truly presents a clear short or long-term vision for our country. We need to change our voting strategy if we intend to elect candidates whose deepest integrity is to have our best interest at heart (collectively) and can prove this through words and deeds.

    These politicians are playing everyone of us for fools, whether they may have infighting, disagreements acted out in public, when they get together they laugh it all off and take it as a joke. Read between the lines of their statements.

    “We had to stop the Minister (Hon. Mark Vanterpool) from setting up too much fireworks because I needed that money to buy some medication...He cuss me, but then he agreed with me,” Minister Skelton stated.

    People we better wise up. We have serious problems that require solutions with some level of objectivity because our problems run deeper than party affiliations or purely self-interest. I forward international articles of court cases pertaining to our Financial Services Industry- of ministers of govts and leaders of companies who have allegedly defrauded their countries and have their holdings right here in the BVI. Never published in the BVI media. We trying so hard to keep a good name by keeping everything secretive that when “the sh###t hit the fan,” we will all (well some) be wondering what happened?

    People we only hear one side of their stories; and when we do, they only share what they want us to know- the water down version.

    Transparency, accountability, and inclusion are our keys to Good Governance. We all need to work this thing out together- Objectively.

    Well, this is my say for awhile. My children need me.
    • voter (02/04/2016, 19:27) Like (24) Dislike (6) Reply
      Pretty much, all of the politicians are basically playing the BVI pop for fools grandstanding, pandering to their respective tribes, and talking mostly piss for publication in the media while the Territory continues to slide down the crapper.

      There is no clear ideology or policy simply "sound bites" and "grab and go"/"knee jerk" poorly thought out responses to the Territory's problems. Take the New Peebles Hospital construction debacle = plan in haste then pay at leisure, NHI = no real competence on board now like a ship at sea, Financial Services = on the back foot all the time, Infrastructure = can't get anything right full of incoplete projects or "do overs". The list of failed or failing government policies and programs continues.. How can we continue to pay for these politician's mistakes and egos?

      What we have here is a marginalization of intelligentsia in favour of mediocrity, laziness, and tribalism in BVI Politics election after election after election.....SMH
    • B (04/04/2016, 17:40) Like (6) Dislike (0) Reply
      @Building Courage, you are 10000000% correct.
  • Poormankind (02/04/2016, 13:15) Like (10) Dislike (47) Reply
    So because people choose to register companies in Seychelles and Vanuata it is Doc's fault? Give me a break. Perhaps the amount of companies that needs to be registered are already registered in the markets now doing business. Has anyone gone after the African market? Africa and India got a whole heep of people. Target those countries. Stop blaming each negative happening in the Financial Services Industryon NDP. You got any suggestions or solutions to offer? If not, pray for the country and the leaders and save the negativity.
    • @ poormankind (02/04/2016, 16:04) Like (25) Dislike (6) Reply
      So what are dead dr smith and over rated mac doing about it?
      • Boo (02/04/2016, 19:09) Like (31) Dislike (4) Reply
        Drawing fat a$$ salaries and rolling around in Range Rover and Cadillac, basically not one fart!
  • not french (02/04/2016, 13:15) Like (5) Dislike (24) Reply
    The French government needs to find something more useful to do than lash out at everyone else, including the
    BVI. They obviously have a head problem and perhaps the guiitine is the answer. Makes one wonder if also those
    Canadian owned banks in these parts are FRENCH Canadian and thus nit picky nosey behaviour of their management.
    Canadian bacon is OK though.
  • SIMON (02/04/2016, 15:05) Like (46) Dislike (0) Reply
    The whole offshore industry is shrinking. A reduction of 10% is pretty good compared with other jurisdictions. The take away from this should be that the industry is in accelerated decline, in 5 years it will probably be 30% of what it is today and it isn't coming back so start looking at new pillar industries now and start training the people for these new industries otherwise.... the Premier will be riding on a $90K donkey.
  • question (02/04/2016, 16:29) Like (23) Dislike (0) Reply

    while new incorporations are growing less rapidly, do new incorporations cover liquidations? are there still approx. 450,000 active bvi companies??
    • Long Shanks (02/04/2016, 20:50) Like (3) Dislike (1) Reply
      Yes, right now (following strike offs of companies in second half of next year). to clarify, liquidations are not the biggest reduction but strike offs (where the company simply stops paying its annual fees). However, there may be a big reduction this year if registered agents decide they have to resign in respect of companies where they do not hold the newly required KYC and director info and this is not provided by their clients.

      Also note that downturn in incorporation fees may be masked by uptick in other fees for active companies (certificates, registration/ de-registration of charges, premium service filings etc).
  • Fight n time. (02/04/2016, 16:42) Like (14) Dislike (5) Reply
    Somethings need fighting for. Something's need a fighter. Our financial services are so important to all of us our very survival. We have to fight. We have to die fighting.. Sorry to say Doc is not a fighter. Doc don't even like conflict.. Doc is a Good Sheep. The days of getting what you want by being nice are long gone. Now a days you get walk up on and walk over when you are too nice...Time for us to get tough and prepare to fight for our survival...
  • Long Shanks (02/04/2016, 18:25) Like (25) Dislike (1) Reply
    It's always dangerous when someone in the civil service tries to give an off the cuff explanation to something like the reason for the popularity of alternative jurisdictions.

    It is NOT due to speed of process or service level.

    However, the difficulties BVI companies have had opening bank accounts (particularly in HK), the increased regulation applicable to BVI companies (through their service providers) and the simple fact that BVI has in part built its product based on price (an easy thing to compete with), all combined create significant headwinds.

    The bank account issues seem to be being addressed (and members of the financial services community should share details of banks which are open for business with BVI cos), the increased regulation is part of the new world and may lead to reduced volume but higher quality of remaining companies (we shouldn't want the shady money-laundering companies as part of our business anyway) and the service levels in BVI are generally strong (and only getting better). So it is not all negative, but long term revenue may reduce due to a decline in volume. That's just something BVI will have to learn to cope with.
  • Eyes N Ears. (02/04/2016, 20:15) Like (13) Dislike (6) Reply
    Things are so hard and looking so gloomy and cloudy and all Ronnie and Myron and Mark can talk about in the house is spend, spend. Spend. Nothing about cut back rolling back or restructuring to safe...There is nothing good long term about their vision for the BVI.
  • Titanic (02/04/2016, 21:19) Like (22) Dislike (3) Reply
    Our ship is slowly sinking and I am not going down with it - Patlian made a wise choice. I only wonder who is now the new co-captain?
    • Whe (04/04/2016, 10:42) Like (0) Dislike (0) Reply
      Whe she going?
    • affected (04/04/2016, 21:34) Like (0) Dislike (0) Reply
      @Titanic
      Wise choice ? Are u sayn dat Patilan resign? R is it that she is informing john public ?
      • Titanic (06/04/2016, 20:54) Like (0) Dislike (0) Reply
        @affected

        ** News Flash ** Yes, she's with a major legal private firm --- and she's well seated.
  • *Hmm (04/04/2016, 11:06) Like (5) Dislike (0) Reply
    Yet this joker continues to spew his crap bout the economy robust SMFH....does he even know what that word mean? How I feel rite about now I worry bout my kids' future in this place because the ppl who governing this country as far as I see causing more damage than good. The only ppl I see benefiting around here are those same ones in gov & their friends & families on the outside. The general population on the backburner wondering what about us?!?
    • SMH (04/04/2016, 18:27) Like (1) Dislike (0) Reply
      You have no clue. You think financial services revolves around local politics?
  • HAHA (04/04/2016, 11:39) Like (1) Dislike (0) Reply
    "something for nothing" - the caribbean way - can't last forever. when you put all (most, anyway) eggs in one basket, your taking a chance. once cuba opens up, we're really screwed.
  • Concerned (04/04/2016, 18:05) Like (0) Dislike (0) Reply
    Let's not mist a point and it a matter of concern. Leaking of information. I Wonder who is leaking clients information?
  • .... (04/04/2016, 21:23) Like (1) Dislike (1) Reply
    Bvi is still a tex heaven bottom line


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