In my recent commentaries, I have been imagining the Virgin Islands of 2030 through the eyes of a 10-year-old Guyanese girl named Maria, her older brother Zak, and their father Troy. This week, the VI family’s chronicle continues.
Zak was undecided which option to back in the upcoming referendum on the future constitutional status of the Eastern Caribbean Union (ECU). For example, would it be better to retain the Privy Council as its final court of appeal, as would definitely happen if the ECU became a United Kingdom-associated state, or to recognise the Caribbean Court of Justice after negotiating union with an independent OECS member which already did so? If, however, the ECU were to seek complete independence from the UK, then it would be able to choose either option.
Even before a union between Anguilla, the Virgin Islands and Monserrat was mooted, the UK had perceived their common strategic interests, in sending naval relief teams to each of them after Hurricane Irma, but all based on the same ship. One of the ECU government’s first actions had been to review the terms and conditions of its united police force and establish a police college.
The VI government’s decision to exclude all work permit holders had made small business owners aware they had more in common with the expatriates on whom their businesses had depended than with either unmotivated Virgin Islanders or politicians whom wealthy residents had flattered into believing that their interests in supporting the financial services industries were sacrosanct.
The reversal of that exclusion was partly due to the government realising that imposing fees on expats would be an easier source of revenue than retrieving deductions employers had retained from their employees’ pay. However, some expats could not afford the re-entry fees, leading to their situation being compared with that of passengers on the Empire Windrush who had left home to help Britain when they were young, then were told they were no longer wanted when they were old.
The VI had come to terms with the pandemic by the end of 2020 but was then sharply reminded of other issues confronting its economy by the UK publishing a draft order in council requiring the VI to commit to publicly accessible registers of company beneficial ownership by 2023. Governor Gus Jaspert might have been expected to play a vital role in persuading the VI government to comply with that, but his term would have been up by August 2021.
The Foreign and Commonwealth Office might also have felt that Mr. Jaspert had become too closely involved with the community, as within days of taking up his post he had experienced Hurricane Irma and had had to work with the premier to oversee the territory’s recovery. Follow the appointment of a black British governor to the Cayman Islands in 2020, it had been rumoured that the UK intended to make a similar appointment to the VI.
The VI had largely managed to push the blame for the greed and criminality exposed in the Paradise Papers onto a Panamanian firm without exposing the ways in which it had helped fuel the VI’s prosperity for decades, trickling down through the economy and providing work. However, by the end of 2020, recriminations were growing against the tax havens who had helped the rich to deprive states of the revenue needed to fund their health systems.
A few years earlier, the Indian financial press had reported that its tax office’s requests for the VI’s tax records of their rich and famous had been denied on the grounds that they had been destroyed by floods. A growing outcry for the reparations for the loss of tax revenue arose in Nigeria.
A commentary on the Malaysian 1MDB scandal appeared in The BVI Beacon (“The BVI company that affected an election,” published in May 2018), but over two years later that matter was still being pursued through the Malaysian courts and by the US Department of Justice at enormous expense.
A spokesman for the EU commented off the record that it was fortuitous that the plot by a rebel Libyan general reported in Malta Today on June 2, 2020 had been abortive. Otherwise the blood of many innocent civilians would have stained the names of the BVI companies involved.
The VI government set up an inquiry into the use made of VI-based shell companies, and the winner of the territory’s 2023 general election criticised its finding without apologising for them. However, subsequent reforms to the financial services industry were widely welcomed, including a commitment to a code of practice which excluded BVI companies from political activism and illegal activities.
Those reforms and the successful completion of the 5G network were credited with the VI’s elevation in status from being, to many, a dirty little tax haven, to a place the world gladly invited into their homes on their screens and headsets every day.