British Virgin Islands Premier and Minister of Finance Ralph O’Neal, has announced in his 2008 budget speech that the government will endeavour to strengthen regulation of the jurisdiction's financial services industry through "pertinent and properly crafted laws" which minimise disruption to businesses in the territory.
"The financial services sector in this territory has done well over the
years, notwithstanding having had to weather many onslaughts to the regulatory
regime which governs it," O'Neal told the Assembly in last week's budget
address.
"We will continue to ensure that the financial services sector in this
territory is well regulated, through pertinent and properly crafted laws, by
ensuring that the regulator is well resourced and by making sure we remain abreast
of international developments that many have an eventual impact on its success,"
he added.
O'Neal explained that a new strategy for the local regulator has already been approved and will apply in 2008.
"This road map is expected to keep us ahead of the curve and continue to ensure that this vital part of our revenue base remains strong. We are committed to ensuring that our regulatory regime is robust, and adequately addresses the various issues that are presently being faced," the Premier declared.
While the 2008 budget was generally light on new initiatives concerning the business and offshore sectors, O'Neal announced that there would be new laws to counter money laundering, terrorism financing and deal with the proceeds from criminal activity.
He also revealed that, for the first time, the BVI would have legislation to regulate the manner in which money is handled and distributed in the territory. However, he assured the Assembly that such measures would not impose an onerous reporting regime on companies operating in the territory.
"I would like to be very clear in stating that all these provisions are aimed at minimising disruptions to businesses in the territory that are seeking to effect legitimate transactions, and ensuring that our regulatory regime is compliant with international Anti-money laundering and antiterrorism financing standards," he stated, continuing:
"We believe that it is vital, that this jurisdiction be recognised as a no mans land for the ethically challenged, and bearing in mind the fact that we are the largest incorporator of companies in the world, we must ensure that our product is second to none."
On the international front, O'Neal explained that the government would continue to monitor international developments and participate in international fora and discussions relevant to the BVI.
The Premier also announced that comprehensive immigration reform will be a priority in 2008.
"We will amend existing legislation to implement additional control measures. Current legislation will be reviewed to ensure compliance with international laws, human rights and other conventions. As we embark on the reform process, we will ensure citizen participation by conducting regular consultations with representatives of the community, advocacy groups and other private sector organisations," he revealed.
As part of this process, preparations are to be made this year to streamline immigration procedures by creating a "one-stop process" for obtaining entry permits and work permits.
O'Neal also outlined plans for cutbacks in the civil service, warning that if the issue is not addressed decisively, its size "will reduce us to a position of impotence".
"The civil service accounts for some 30% of the working population and operational costs in the last year’s budget cost the tax payers in excess of USD248 million. This is to say that for every dollar paid in taxes by the people of this territory in excess of an additional six dollars had to be found from duties on imports, licenses and other fees in order to the maintain the operations of the institution that we call the Government of the Virgin Islands," he observed.
However, O'Neal was optimistic about the prospects for the wider economy, pointing to estimates valuing gross domestic product at more than USD1.1 billion in 2007, indicating a growth rate of 9.5%.
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