BVI To Get Financial Services Commission

by Amanda Banks, Tax-News.com, London

28 November 2001

Chief Minister and Minister of Finance of the British Virgin Islands, the Honourable Ralph T O'Neal has announced that the government intends to introduce legislation before the year end to create a Financial Services Commission.

Mr O'Neal made his announcement during a sitting of the Legislative Council this month in response to a question from leader of the opposition, Dr Orlando Smith, who called for an update on the implementation of the recommendations made by KPMG in its report on the BVI's financial services sector just over a year ago.

KPMG made three recomendations in total: the establishment of modern anti-money laundering legislation; the establishment of effective exchange of information mechanisms; and the establishment of an independent regulatory authority.

'With regards to the BVI,' said Mr O'Neal, 'the first two of these had already been effected in the first case by the passing of the Proceeds of Criminal Conduct Act 1997 and in the second case, by the passing of the Financial Services International Cooperation Act of 2000, which complements an existing mechanism for legal assistance and regulator to regulator assistance.'

The only major piece of legislation that remains to be processed is the establishment of an independent regulatory authority and the Chief Minister confirmed that such a draft bill is currently being prepared. 'The draft bill has ... benefited from input from the Financial Services Legislature Advisory Committee and the Regional Financial Services United Kingdom,' he said.

Mr O'Neal added that he expects the bill to be enacted later this year with an official ceremony to launch the Commission early next year.

Reports from the British Virgin Islands have also confirmed that the Finance (Amendment) Act, 2001, has finally passed into law following several lengthy debates. Ralph T O'Neal commented on the amount of time it has taken to review the legislation. 'I have long lamented that an act passed in 1977 is not only outdated by over 20 years of economic development, but we have since even changed into the millennium,' he said.

The BVI news service, the Island Sun, explained: 'The territory's budget in 1977 was less than $10M and in 1985 it was less than $30M. The total revenue projected for 2001 is approximately $192M, for which the expenditure on a recurrent and capital nature is of similar proportion in terms of quantum.'

Mr O'Neal said the amendment would provide the Minister of Finance with more flexibility to 'manage the affairs of the government, not only within the auspices of the Appropriation Act, but also by way of advance provisions.' He added that there was no intention on the government's behalf to avoid accountability and according to the Island Sun 'the amendment provides sufficient latitude to ensure that the government can conduct its business, as opposed to being subject to highly prohibitive constraints.'

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