Other International Agreements

The British Virgin Islands has a Mutual Legal Assistance Treaty with the USA. Following pressure in early 2000 from the OECD and the Financial Stability Forum of the G7, the BVI announced in June that it would include within the parameters of the treaty access to information relating to criminal tax investigations and that it would eliminate the requirement for dual criminality. This would be accompanied by the introduction of Compulsory Powers Legislation to provide for access to information within the BVI.

In April, 2002, the British Virgin Islands Government announced that an agreement had been reached with the OECD without compromising the BVI's principle of 'even keel' across all nations.

Robert Mathavious, Managing Director of the BVI Financial Services Commission, commented: "We are pleased that an agreement with the OECD can be reached without compromising our established views. We are confident that working with the OECD will enable us to retain our position as a leading financial centre. We are pleased to be accepted, and invited to participate, as a full and equal partner in the OECD forum of activities."

At the same time, the BVI announced the signing of a new Tax Information Exchange Agreement with the United States of America.

Speaking after the signing of the agreement, BVI Governor, then Frank Savage, observed that allowing the US Internal Revenue Service to pierce banking secrecy in cases of tax evasion and money laundering, clearly demonstrated that the country had been working "to increase the transparency of our systems and reduce the potential for abuse."

Then US Treasury Secretary, Paul O'Neill said that the Bush administration welcomed the agreement with the BVI, explaining that: "We have an obligation to enforce our tax laws because failing to do so undermines the confidence of honest taxpayers of our system. One of the keys to enforcement of our tax laws is access to needed information."

In 2003 the BVI set up a Financial Investigation Agency. This agency functions as a specialist investigative law enforcement arm of government. Its primary focus will be to investigate the BVI financial services industry and support the BVI mutual legal assistant regimes.

The Agency was officially launched in 2004. Highlighting the agency’s launch as an example of the territory’s dedication to upholding international initiatives to combat financial crime, then Chief Minister Orlando Smith commented: “This commitment is the foundation of our entire financial industry and, I can assure you, it will always be a top priority for this Government”.

The FIA took over the role formerly carried out by the Royal Virgin Islands Police Force.

In January, 2006, a prospective Tax Information Exchange Agreement (TIEA) between Australia and the British Virgin Islands was reportedly derailed at the last minute because the Caribbean jurisdiction was holding out for special concessions from Canberra as an inducement to sign the agreement.

In July 2006, Chief Minister Orlando Smith revealed that the territory's government was considering its future participation in the Caribbean Single Market Economy (CSME).

Although the BVI is not taking part in the single market process, Dr Smith stated that the government will continue to examine the pros and cons of participation, particularly from the trade angle.

“We are actively engaged in following the process to see clearly what the disadvantages and benefits could be whether we are in or out of that process,” the Chief Minister explained at a media briefing following the recent meeting of Caricom heads of government, and the 43rd meeting of the Organisation of Eastern Caribbean States (OECS). “This is because we are speaking about things like trade relationships, which could be important in the future,” he added.

In August 2007, it emerged that the the British Virgin Islands Financial Services Commission and the Jersey Financial Services Commission had signed a memorandum of understanding designed to further co-operation between the two regulatory bodies.

The MoU establishes a formal basis for co-operation, including the exchange of information and investigative assistance. Such collaboration should help to protect investors and depositors and to promote the integrity of financial services markets in Jersey and the British Virgin Islands.

John Harris, Director General of the Jersey FSC, said: “I am delighted that we have been able to conclude formal arrangements for sharing regulatory information with the British Virgin Islands Financial Services Commission. A number of finance industry firms have a presence in both jurisdictions and this Memorandum of Understanding will ensure that where regulatory information needs to be exchanged it can be done in a rapid and efficient manner.”

Robert Mathavious, Managing Director and Chief Executive Officer of the BVI FSC, added: “As leading international finance centres, Jersey and the BVI have cooperated formally and informally on regulatory matters over a number of years. I am delighted that this Memorandum of Understanding will enable us to work more closely together to the benefit of both of our regulatory regimes. For the BVI FSC, the Memorandum is a further sign of our commitment towards effective international cooperation that builds our capacity as a world-class jurisdiction.

He added: “The business communities in the BVI and Jersey already work closely together in many ways. The Memorandum of Understanding will provide them with further assurance of being able to rely on high quality regulation in both jurisdictions.”

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