Specifically, the BVI reacted to the November, 2000
KPMG Independent Review of Financial Sectors in the Caribbean Overseas
Territories. The three main recommendations of the KPMG report which
apply to the BVI were the establishment of an independent regulatory
authority, the enhancement of laws and systems for combating money
laundering and the enactment of compulsory investigative powers
to enable regulators to obtain and to share vital information with
Companies offering trust services must be licensed
under the Banks and Trust Companies Act 1990, and supervised by
the Inspector of Banks, Trusts and Company Managers. Trust licenses
are as follows:
A General Trust License permits services to be offered
generally; the minimium paid-up capital is (at the time
of writing) $250,000 and a deposit of not more than $100,000
must be made as prescribed by the Governor; the annual license
fee is $10,000;
A Restricted Trust License restricts the provision of
services to those undertakings specified in the license.
There are no minimum capital or deposit requirements; the
annual license fee is $300.
Amendments to the licensing legislation in 1995 under the Banks
and Trust Companies (Amendment) Act, 1995 incorporated 'gateways'
which provide for the disclosure of information to the regulatory
authorities and law enforcement agencies in other countries
to assist the investigation of illegal or criminal activities.
The BVI authorities however do not respond to 'fishing expedition'
enquiries from other jurisdictions. A 2010 amendment strengthened
the Act's compliance provisions, while also streamlining the
In common with many other offshore jurisdictions,
the British Virgin Islands responded to pressure from the OECD
and FATF by tightening up its regulatory regime. The Government's
Financial Services Department, acting through its consultative
committees (the Mutual Funds Advisory Committee, the Financial
Services Legislation Advisory Committee and the Harmful Tax Competition
Task Force) collaborated with the BVI Society of Trust & Estate
Practitioners, the Association of Registered Agents and the BVI
Bar Association to discuss the necessary changes to the regulatory
structure to comply with best practice.
As a result, on 1st January, 2002, the BVI Government
established an independent Financial Services Commission. The
formation of the FSC saw a division of the marketing and regulatory
functions within the BVI offshore financial services centre.
In practical terms the FSC meant maintenance of
the clear regulatory standards set out in previous legislation
such as the Anti-Money Laundering Code of Practice (2000) and
the Financial Services (International Co-operation) Act 2000.
The FSC's Banking and Fiduciary Division ensures that all banks
and corporate service providers operating in and from the BVI
comply with international regulatory standards, established best
business practices and relevant BVI laws.
Addressing the First House of Assembly on September
9, British Virgin Islands Premier, Ralph O’Neal announced
that, in line with the jurisdiction’s commitment to acting
as a responsible financial services centre, he would travel to
the Netherlands to sign the islands’ thirteenth tax information
exchange agreement on Friday, September 11.
The agreement marks a significant milestone for the territory,
O’Neal noted, observing that it illustrates the jurisdiction's
continued commitment to ensuring transparency in the operation
of the financial services sector and to the principles of good
governance, despite surpassing the twelve TIEA quota set by the
G20 on April 2.
O’Neal noted that on August 13 the British Virgin Islands
gained OECD ‘white list’ status following the conclusion
of its twelfth TIEA with New Zealand, placing the territory on
the list of jurisdictions deemed to have substantially implemented
the internationally-agreed standard on transparency and information
“On that occasion I gave assurances that we will not stop
there but rather, we will continue to pursue negotiations with
a view to signing similar agreements with other countries. While
we will primarily pursue these agreements with those countries
which are members of the OECD, we are also willing to enter into
similar agreements with other countries with which we conduct
international business,” O’Neal revealed.