The United Kingdom’s threat to impose public registers by 2020 has led to increasing calls for a review of the 2007 Constitution, particularly in the heating-up pre-election campaigns. But if only “we could see ourselves as others see us,” as the poet Robert Burns wrote.
However, I think that we need to put in place institutions already provided for while considering the way forward. Otherwise, we will be sleepwalking towards negotiating with the UK, whatever the complexion of its government after the Brexit situation has been resolved. I am thinking of such areas as the Human Rights Commission, an electoral commission and the register of interests (see comments on the latter two in my Dec. 6 Beacon commentary, “Election code seen to lack key rules”). The UK may press for the inclusion of an integrity commission like the Turks and Caicos Islands has now established, requiring public officials as well as legislators to declare their assets and liabilities.
Your Dec. 6 editorial on the European Union’s threat to blacklist the Virgin Islands if companies registered here don’t have sufficient “economic substance” by this year-end did not mention it, but quite rightly warns against “the reputational damage of blacklisting,” particularly when competing jurisdictions are much better prepared to meet the challenge than us.
The government is seeking to pass a law by year end requiring implementation of the Organisation of Economic Cooperation and Development and EU substance requirements for all businesses registered and tax resident here, despite creating challenges for some companies and limited partnerships.
The premier has promised, “The government will engage closely with the BVI’s international business and financial services sector to ensure that the jurisdiction continues to provide services that benefit the global economy.”
Cayman law
The Cayman Islands published draft tax legislation on Dec. 6 to provide for an economic substance test to be satisfied by certain entities with effect from Jan. 1, seeking to incorporate the OECD’s proposals on countering harmful tax practices, as well as the new EU substance requirements. That territory is a member of the OECD’s Inclusive Framework on base erosion and profit shifting (BEPS), which allows interested jurisdictions to work with the OECD and G-20 nations on monitoring the implementation of the proposals.
Cayman Finance stated, “Those who establish Cayman structures do not do so to engage in BEPS, [but] because Cayman is an efficient neutral hub with key expertise in handling complex transactions. … We anticipate that our sophisticated clients will adapt as required. … All of Cayman’s main competitor jurisdictions are in a similar position as BEPS Inclusive Framework members.”
Register of interests
The importance with which the UK Parliament views its register of members’ financial interests is revealed in the report on Dec. 6 that ex-foreign secretary and leading Brexiteer Boris Johnson was rebuked by the cross-party Committee on Standards for breaching strict rules to inform the Commons authorities within 28 days about payments received outside of his work as a member of parliament. He was made to apologise in parliament over failure to declare more than £52,000 in outside earnings. The parliamentary commissioner for standards found the breach “neither inadvertent nor minor” due to the amount of money, which was a significant proportion of the annual parliamentary salary, and Mr. Johnson’s failure to meet the deadline regarding nine payments, which were mostly royalties from his books.
“Having made five late registrations in December 2017, Mr. Johnson did not take steps to avoid a recurrence until I initiated an inquiry in October 2018,” the commissioner stated.
The committee explained that Mr. Johnson had not “intended to deceive the House or the general public about the level of his remuneration,” but criticised his “over-casual attitude” to its rules and recommended that he make an apology to the House on a point of order.