Government hopes the territory will be removed from the European Union’s blacklist of “non-cooperative jurisdictions for tax purposes” by October, three senior officials said Friday.
“The BVI is working very keenly on making sure that we have done what we’re supposed to do,” BVI International Tax Authority Director Latoya James said during a press briefing alongside BVI Finance CEO Elise Donovan and Financial Secretary Jeremiah Frett.
Echoing Premier Dr. Natalio “Sowande” Wheatley’s previous claims, the trio said the EU’s Feb. 14 decision to blacklist the Virgin Islands was based largely on criteria that didn’t consider recent reforms.
For instance, one of the EU’s major benchmarks is the Organisation for Economic Cooperation and Development’s Global Forum Peer Review, which assesses compliance with international standards of transparency and exchange of information on request, they said.
In the VI, the OECD Peer Review was launched in December 2021, and it covered a period stretching from 2016 to 2020.
This timeline means the review didn’t consider more recent reforms, including amendments to the BVI Business Companies Act and related regulations that took effect on Jan. 1, officials explained.
The territory has therefore requested a supplementary review from the OECD Global Forum.
Mr. Frett said he’s “confident” such work will be enough to take the territory off the blacklist by October, when the EU is next scheduled to revise the list.
“Notwithstanding the challenges, I think that we have done a very good job in addressing most of our concerns,” he said. “Unfortunately, the evaluation period for which we were assessed was outside where most of the work was done. The supplementary request was made and hopefully that will be accepted.”
Ms. James agreed, explaining some of the deciding factors for the four-year period covered by the peer review.
“The Global Forum could have made a decision to look at a different period. But I think it was a strategic decision to look at that period because a lot of things happened between 2016 and 2020, particularly the Panama Papers,” she said. “It’s unfortunate for us that [Hurricane Irma] happened and our review of that period was in [that timeframe].”
Ms. James added that the ITA, BVI Finance and other agencies are in discussions with the financial services industry to see if there has been any impact on businesses as a result of the blacklisting.
“Those in the industry would be banks, trust companies, law firms, financial services businesses that have global portfolios,” she said. “I think about 20 percent of our business comes from Europe.”
During a House of Assembly meeting on Tuesday, Dr. Wheatley said that his Finance Ministry is “committed to complying with evolving international standards on transparency and the fight against financial crime.”
The EU also added three other jurisdictions to the blacklist last week: Russia, the Marshall Islands and Costa Rica. Altogether, a total of 16 countries and territories are now included. According to the EU, the list is updated twice a year using a monitoring process that screens countries and territories against international tax standards.
The VI was included for the first time last week because it was “found not to be sufficiently in compliance with the OECD standard on exchange of information on request,” according to the EU.