The BVI Financial Services Commission is the agency responsible for authorising and licensing companies or persons to conduct financial services business and for monitoring the perimeter of regulated financial services activity to safeguard the public against any illegal and or unauthorised financial services business operating in or from within the Virgin Islands. Photo: VINO

Premier and Minister of Finance Dr The Honourable D. Orlando Smith announced in the House of Assembly on Monday December 21, 2015 during the Fifth Sitting of the First Session of the Third House of Assembly that the territory was successful in gaining recognition for its “largely compliant rating” by the Organisation for Economic Cooperation and Development (OECD), which said that the territory should not be labelled as a tax haven. Photo: VINO/File

The Premier was at the time providing an update on the Beneficial Ownership Registry of the Virgin Islands.

“The crux of the beneficial ownership issue is to ensure that we know who beneficially owns BVI companies and have the ability to share that information with competent authorities and law enforcement authorities in a timely manner, if and when the need arises,” he said in the statement.

According to Premier Smith, the Territory’s relevant Anti Money Laundering/ Countering of the Financing of Terrorism legislation have already been amended to require beneficial ownership information to be held in the Virgin Islands from 2016 onward.

Timely access to information

“The next stage in the development of the British Virgin Islands’ successful Corporate Service Provider model will be the design – in full consultation with the financial services industry – of a technology based solution that would ensure the timely access and sharing of beneficial ownership information held by Trust and Company Service Providers (TCSPs),” said Premier Smith.

He noted that this step is consistent with the Territory’s record – under successive governments - of keeping pace with evolving standards and thereby ensuring that the Territory’s regime remains effective.

“An effective regime is necessary both to attract legitimate business and combat those who may seek to use BVI companies for nefarious purposes,” he stessed

The Premier said that in bilateral meetings with Her Majesty’s Government, UK, he reiterated to the Overseas Territories Minister, Mr James Duddridge, that the VI’s TCSP model entails a beneficial ownership regime that has been successful over the years. 

“Minister Duddridge has agreed with the position of the Government of the Virgin Islands that there are other systems beside central registers that provide an effective beneficial ownership regime,” he said. 

The Premier said that while in London, he also met officials from the UK’s National Crime Agency (NCA) and Serious Fraud Office (SFO) and discussed the complex transnational challenges facing UK and OT law enforcement agencies as they seek to tackle cross-border financial crime.

VI played integral role in JMC

Premier Smith noted that the VI’s leadership in the lead-up to the Joint Ministerial Council and throughout the meeting was essential to a positive outcome on the beneficial ownership issue. 

He disclosed that the territory played a decisive role in shaping the financial services dimension of the JMC Communiqué, both bilaterally and as the Chair of the UKOTA Subcommittee on Financial Services. 

“The Communiqué’s text on beneficial ownership reflects the BVI position on similarly effective systems for handling beneficial ownership information,” he said.

“The Communiqué also reflects the BVI’s view that international cooperation between law enforcement agencies in different jurisdictions is important to combating financial crime,” Premier Smith reported to the House of Assembly.

Beneficial Ownership

According to the Wolfsberg Group, the term “beneficial ownership,” when used to refer to beneficial ownership of an account in an Anti-Money Laundering (AML) context (such as the Principles), is conventionally understood as equating to ultimate control over funds in such account, whether through ownership or other means. “Control” in this sense is to be distinguished from mere signature authority or legal title.

The term reflects a recognition that a person in whose name an account is opened with a bank is not necessarily the person who ultimately controls such funds. This distinction is important because the focus of AML efforts – and this is fundamental to the Principles – needs to be on the person who has this ultimate level of control. Placing the emphasis on this person is typically a necessary step in determining the source of wealth.