BVI Creates Financial Services Commission

Tax-News.com, London

11 December 2001

The Government of the British Virgin Islands has announced the establishment of an independent Financial Services Commission. 'On Friday 7 December 2001', says the announcement, 'the legislature of the British Virgin Islands (BVI) passed a Bill establishing an Independent Financial Services Commission for the BVI. The Bill transfers responsibility for regulatory oversight of the financial services sector from a government department, the Financial Services Department, to a new autonomous regulatory body, the Financial Services Commission (FSC). In so doing, it ensures that the BVI meets the highest international standards, and safeguards the reputation and integrity of the BVI as a location for legitimate business.'

'The FSC signals another milestone in the BVI's development as a well-regulated financial centre. Combined action by the Government and the BVI's Financial Services Department has already ensured that BVI offers no safe haven for those who engage in fraud and related activities, and has kept BVI off any of the negative lists of offshore financial centres.

'Presenting the FSC Bill, BVI Chief Minister and Minister for Finance the Hon. Ralph T O'Neal said, "Passage of this Bill will establish beyond any doubt the commitment of this Honourable House and that of the Government
and people of these Virgin Islands to ensuring that our financial sector activities, and especially its regulatory and supervisory regime, are fully compliant with established international standards."

'The Chief Minister stressed that the FSC "must be properly resourced and effectively staffed. It will have to be an organization committed to continuous professional development of its staff, and be technologically driven. It must be capable of attracting and retaining some of the Territory's brightest and best minds".

'The establishment of the FSC was in line with the "clear trend" for autonomous regulatory agencies in onshore and offshore financial centres alike, Mr O'Neal explained. He added that this trend was "based in part on the observed professional and efficient dispatch of regulatory supervisory, and compliance and enforcement matters worldwide by independent, as distinct from politically controlled entities." '

Other important BVI financial regulatory initiatives in recent years have included the 1997 Proceeds of Criminal Conduct Act, the Mutual Legal Assistance treaty with the USA, the introduction of statutory gateway clauses to facilitate regulator-to-regulator information exchange, and the Financial Services (International Cooperation) Act of 2000.

The establishment of the BVI Financial Services Commission also follows the recommendations of the UK Government's 1999 White Paper, "Partnership for Progress and Prosperity" and the priority recommendations
of last year's report by KPMG for the British government into financial regulation in the UK's Caribbean overseas territories and Bermuda.

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