BVI Takes Steps to Combat Illegal Financial Activity

The British Virgin Islands (BVI) has taken significant steps to reduce its tax burden through entirely legitimate means, while also combating illegalities such as money laundering and tax evasion.

History of Efforts to Combat Financial Crimes

In 1997, the BVI legislature introduced the Proceeds of Criminal Conduct Act, which aimed to combat illegal financial activity in the jurisdiction. Since then, the government has continued to strengthen its laws and regulations to prevent and detect financial crimes.

The BOSS System: A Secure Solution for Law Enforcement Agencies

The BVI’s Beneficial Ownership Secure Search System (BOSS) Act 2017 is a prime example of this effort. The BOSS system provides a secure and efficient way for law enforcement agencies to access information about beneficial ownership of companies, making it easier to track and trace illegal funds.

Critics’ Concerns: Public Registry of Beneficial Owners

Despite these efforts, some critics have called for the creation of a public registry of beneficial owners (UBO), citing concerns over transparency and tax evasion. However, experts argue that this move would not only be ineffective in combating financial crimes but also harm the BVI’s financial sector.

Expert Insights: Martin Kenney on the Ineffectiveness of Public Registry

Martin Kenney, Managing Partner of Martin Kenney & Co, a specialist investigative and asset recovery practice based in the BVI, warned that the creation of a public UBO registry would lead to a decline in the number of companies incorporated in the jurisdiction. “Increased regulation has mirrored the slow decline of BVI incorporations over the last 15 years,” he said.

Kenney also pointed out that the creation of a public registry would not be effective in combating financial crimes, as criminals could easily use fake identities and shell companies to launder money.

• “It’s like trying to find a needle in a haystack,” Kenney said. “Creating a public registry would not only be ineffective but also destroy important evidentiary material necessary for the prosecution of economic criminals.”
• The creation of a public registry would lead to a decline in the number of companies incorporated in the jurisdiction, causing harm to the BVI’s financial sector.

Government’s Response: Resisting Calls for Public Registry

The BVI government has so far resisted calls for the creation of a public UBO registry, citing concerns over the potential impact on its financial sector and the effectiveness of existing regulations.

Recent Developments: Challenges Posed by COVID-19

In recent years, the BVI has seen a decline in new incorporations, which some attribute to increased regulation. However, the jurisdiction’s premier, Andrew Fahie, has insisted that the financial services industry remains “very busy and active” despite the challenges posed by COVID-19.

Conclusion: The BVI’s Commitment to Combating Financial Crimes

With its strong regulatory framework and commitment to combating financial crimes, the BVI is well-positioned to continue attracting businesses and investors while maintaining its reputation as a responsible offshore financial center.