Third District Representative Hon. Julian Fraser, RA said he was sceptical about the Premier's call for unity between the two political parties on Financial Services. Photo: VINO/File

Hon Fraser said the Premier is absolutely right that issues such as financial services cut across party lines. Photo: VINO/File

“I don't know if I can take the Premier's call for unity at face value,” Hon. Fraser said, “in the past such statements were euphemisms for us to remain silent; and it was that blind ambition that got us where we are today.”

Hon. Fraser though, was in agreement with Premier Smith that the Territory’s Financial Services Sector is a survival issue and was never a political one.

Circumstances, he reiterated, show that the Virgin Islands (VI) is operating under standards established by international organizations such as the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF), in addition to a series of local laws to ensure compliance in the industry.

The former Minister for Communications and Works claimed, however, that the fact is that the practice under those same set of rules amounts to the promotion of tax avoidance. “This is where I think our Government is missing the boat, they are arguing the facts, instead of arguing the circumstances,” Hon. Fraser said.

Hon Fraser said the Premier is absolutely right that issues such as financial services cut across party lines and added, “as far as the Opposition is concerned he is preaching to the converted.”

“It is and continues to be our theme, that when it comes to the Financial Services Industry there are no parties, we are all Virgin Islanders,” Hon. Fraser noted, “The stakes for me are equally high, as I was in government when the Commission was established and have served in two administrations since.”

The Third District Representative called for a higher degree of involvement as the appropriate measure of response, especially one where meaningful exchange of ideas will take place, as opposed to this public and open appeal to the opposition.

Responding to the Premier’s pledge to protect the industry, Hon. Fraser said, “I think in making promises like this the Premier is setting himself up for a big fall, for the circumstances surrounding this round of aggression is totally out of his hands, but again he continues to give the impression that there is a magic wand at his fingertips.”

He questioned the Premier’s statement of solidarity with others while stating “these said Overseas Territories and Crown Dependencies are much larger and are fierce competitors for the same market.”

“Bermuda, an Overseas Territory with an economy of over five times that of ours answers to the Parliament of the UK, and likewise Jersey with an economy that is similarly five times that of ours is more diverse with a substantive banking sector with huge deposits also answers to the Parliament of the UK, whereas we are governed by Council,” Hon. Fraser said. “There are tremendous differences here, and our failure to recognise them can only work to our detriment.”

According to Hon. Fraser, another clear example of where the Premier continues to mislead the public is the mentioning of a tax evasion issue. “The issue for the BVI is not one of tax evasion but tax avoidance, now referred to as ‘aggressive tax avoidance’,” he said.

“Tax evasion is illegal, and is a matter for law enforcement. No one is accusing the BVI of proliferating tax evasion, so by the Premier focusing on that he is missing the boat,” he countered.

For the avoidance of doubt, Hon. Fraser quoted UK Prime Minister David Cameron who said, "At the G8 I'm going to push for international agreements to fight the scourge of tax evasion and aggressive tax avoidance.”

Hon. Fraser suggested the VI should concentrate on this area to make an impression of any significance.

The Premier, he added, needs to acknowledge that the international community is no longer satisfied with the outcome instead of simply acknowledging that no laws have been broken. “The sooner you do that, the sooner you can address the problem. Reiterating your innocence on breaking the law to the people of the territory is not going to change anything,” Hon. Fraser said.

According to Hon. Fraser, it is ironic that the Premier is now boasting about the signing of 24 Tax Information Exchange Agreements (TIEAs) when in fact for a whole four years during his 2003-2007 Administration, he didn't sign a single one, and in this current Administration it took him a full 18 months before signing his first TIEA. “To date,” Hon. Fraser argued, “he has signed a shameful total of two; one with Canada and the other with Guernsey, which has a whopping 42 of their own.”

“When the Premier is all over making mischievous statements about the VIP's mishandling of government funds and reckless spending, he should give us credit for saving the Financial Services Industry of the Virgin Islands,” Hon. Fraser contended.

Hon. Fraser said he did not know with any reasonable degree of specificity what is going on here on the ground in the industry vis-a-vis the current push by the G8 and upcoming G20. “Until such time as I know, I consider it unreasonable for the Premier to expect my support with whatever he is doing or not doing,” he said.

In reference to the Premier’s statement that collective voices have already begun to shape the current dialogue, Hon. Fraser said, “The Premier continues to use language that is patronizing and at times transparent.”

He said it scares him to think that the Premier believes that discussions between the OT's and Crown Dependencies with the Prime Minister of the UK are on their terms and not his. “It reminds me of one of his Ministers commenting after the Premier's meeting to negotiate the Protocols for Effective Financial Management with the UK Minister for Overseas Territories, Henry Bellingham, that ‘The Premier had Bellingham eating out of the palm of his hands’; two weeks later Bellingham was fired,” Hon. Fraser said.