Chairman and CEO of the BVI Financial Services Commission Dr Robert A. Mathavious said the territory must ensure it does not become a haven for the ethically challenged. Photo: VINO/File

Dr Mathavious, who has just commenced an investigation on the local impact of the Panama Papers leak, was delivering a speech to the BVI Association of Compliance Officers on April 20, 2016. Photo: VINO/File

Dr Mathavious, who has just commenced an investigation on the local impact of the Panama Papers leak, was delivering a speech to the BVI Association of Compliance Officers on April 20, 2016.

“The BVI has always sought to be a resilient, vibrant, top tier, cooperative, competitive, clean and well regulated financial centre. It’s a dream shared by the Board of Directors, by Compliance Officers and by the FSC. Yet today, it is an embattled dream and at risk more than ever.”

He said today, as always, the challenges the Commission faces, whether at the Board level, on a firm by firm basis, as regulators, Compliance Officers or as a jurisdiction, is to assess the issues that confront them and to consider the appropriateness of the response.

“To prepare thoroughly, we cannot – No! We must not allow the greatest threat to our long learned success be our failure to prepare properly for the challenges and opportunities of the future. And we all share the responsibility of ensuring that in this less than hospitable environment the future of our financial services sector is not threatened or placed at risk. How the jurisdiction navigates these challenges depends on us all. Together we must act strategically to ensure that the BVI does not provide a safe harbour to the ethically challenged.”

Negative light on FS

Ever since the ‘Panama Papers leak’, a negative light has been cast on financial services and fingers have been pointed at the Virgin Islands and other financial services jurisdictions, accusing them of being “tax havens” and even making “dirty money.”

Dr Mathavious said that at the FSC, the Board, the compliance office and the regulator believe that as a jurisdiction and as a financial services sector, more can be achieved by working collaboratively and cooperating together than by “working in isolation on our own or in silos; that each of us in the industry share responsibility for preserving and safeguarding the competitiveness, resilience, vibrancy, integrity and reputation of the financial services sector upon which the fortunes of the VI so depends; and that unless we have a joined up, all hands on deck strategic partnership approach to the challenges that confront us, we will be unable to adapt, evolve and remain a relevant global player in cross border financial services.”

He said that in times like these they must find the courage and the resolve to do what is right, not what is expedient or what we have always done; that they cannot be on the wrong side of the arguments around standards of control, transparency, sanctions busting, kleptocracy corruption, tax evasion, anti money laundering/countering the financing of terrorism (ALM/CFT) etc because failure to be on the right side of the argument not only turns out disastrous, but can ruin the VI brand by making VI structures and vehicles toxic.

“And finally we believe, that the BVI’s hard won good reputation should not be tarnished by lapses and failure to prevent, deter and properly address risks – or by the indifference, inertia, ignorance, ineptitude or incompetence on the part of anyone associated with the BVI financial services sector,” he said.

Dr Mathavious urged that the sector holds steady to the course ahead and not become discouraged.

“Yes, in recent times our reputation has taken a direct hit. Our path ahead is as challenging, as daunting and as arduous as it has ever been. I know some of you are experiencing anxiety and jitteriness about the future of the industry. But you must not allow yourselves to be disheartened. We all know what we must do. It’s now a matter of doing it,” he said.