In an announcement last week, the territory's government said that with its submission to the UK Treasury Select Committee's inquiry, it was attempting to convey the message that the BVI is widely regarded as operating a robust regulatory and supervisory regime in financial services, and has a well-established system of international cooperation - a fact recognised by international organisations, such as the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).

"This is the strong message which the Territory has taken to the Inquiry into Offshore Financial Centres by the United Kingdom Parliament's Treasury Select Committee," Executive Director of the BVI International Finance Centre, Lorna Smith commented about the submission, according to the BVI Government Information Service.

The spotlight has been on the overseas territories and their financial services sector in recent months following a report by the National Audit Office entitled "Managing Risk in the Overseas Territories," which recognised that the British Virgin Islands is now of major importance in the global financial system.

"The Territory has demonstrated that it is up to the task of maintaining a high quality of regulation as it grows and develops," explained Smith.

The National Audit Office report also noted that the BVI is better equipped through its Financial Investigation Agency, established in 2004, to investigate financial crime than some of its fellow UK Overseas Territories.

The inquiry, announced on 30th April, forms part of the committee's ongoing work into Financial Stability and Transparency. The inquiry is attempting to find out to what extent offshore financial centres are influencing worldwide financial markets and how much of a risk they pose on global financial stability, among other questions such as the levels of tax transparency in these jurisdictions. Interested parties were invited to make submissions relating to these questions up to 19th June 2008.

So far, the authorities in Bermuda, the Cayman Islands, Guernsey and Jersey have announced that they submitted evidence to the inquiry.