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WORLD NEWSMonday 11 April 2016

Tiny British Virgin Islands has big role in leaked documents

This photo shows a general view of Road Town, Tortola in the tive Journalists. crecy see it, is that the BVI a new requirement for
BVI officials have sought and other jurisdictions en- companies to file a list of
British Virgin Islands. A thriving financial services industry that in recent days to address able the hiding of the true their registered directors
the reports while defend- owners of companies in with the Financial Services
evolved over the last 30 years, the British Virgin Islands has come ing financial oversight in ways that allow corruption Commission. The changes
a territory where incorpo- and criminality to flourish. are expected to help cur-
under scrutiny like never before thanks to the leak of confiden- rated entities outnumber “We’re not saying that shell tail money laundering and
residents by a ratio of more companies or tax shelters other criminal activities.
tial documents from a Panama-based law firm that specializes than 10-to-1 and blue-suit- need to be done away Defenders of the offshore
ed lawyers and bankers on with, we’re saying that industry say that the BVI
in offshore finance. (AP Photo/Todd VanSickle) the streets of Tortola often more of this needs to be is no different than other
outnumber tourists. out in the open,” said Mark places that offer anony-
BEN FOX thanks to the leak of con- “If you see articles that say Hays, a senior adviser with mous corporate registries,
KENNETH SILVA fidential documents from jurisdictions like the BVI are Global Witness. including Delaware, but
Associated Press a Panama-based law firm facilitators of illegitimate The Tax Justice Network that some people would
TORTOLA, British Virgin Is- that specializes in offshore activity, that is incorrect,” says the BVI has a “lax, prefer to do business in an
lands (AP) — A thriving fi- finance. Financial Secretary Neil flexible, ask-no-questions, established, stable, low or
nancial services industry More than half the 200,000 Smith said Friday. “Yes, it see-no-evil company in- no tax jurisdiction outside
that evolved over the last offshore companies set up occurs, but it also occurs corporation,” system. “The the United States. The BVI
30 years in the British Virgin by the Mossack Fonseca in jurisdictions that are not BVI has long been linked to had traditionally attracted
Islands made it one of the law firm, including ones seen as offshore financial wave after wave of scan- Asian and European cli-
most popular places in the owned by the father of centers.” dals,” the organization said ents, which may be one
world to form a corpora- British Prime Minister David The British Virgin Islands, an in a report that ranked the reason so few U.S. citi-
tion, turning a sleepy cluster Cameron and relatives of overseas British territory of BVI at number 21 on its fi- zens have been named in
of Caribbean islands into a Chinese leader Xi Jinping, about 30,000 people near nancial secrecy index. The the reports on the leaked
global hub of finance. were registered in the BVI, Puerto Rico, is the world’s U.S. was No. 3 and Switzer- documents. Even people
Now the British Virgin Is- according to reports coor- leading center for com- land No. 1. who have criticized the off-
lands has come under dinated by the Internation- pany incorporation, ac- But the Tax Justice Network shore industry in the past for
scrutiny like never before al Consortium of Investiga- cording to the Tax Justice also notes that the British weak regulation say there
Network. More than 1 mil- Virgin Islands has made sig- are legitimate reasons to
lion enterprises have been nificant improvements. set up a corporation or
incorporated since 1984. An amendment to the ter- trust in a place like the BVI.
There were 450,000 active ritory’s Business Companies Some businesses need off-
ones at the end of last year, Act that went into effect shore entities to run subsid-
according to the Financial Jan. 1 requires compa- iaries and people who live
Services Commission. nies to keep their benefi- in dangerous places may
The problem, as critics cial ownership information have legitimate reasons to
of offshore financial se- within the BVI. There is also disguise their assets.
“The mere fact that a for-
Caribbean trade group combats tax haven label eign national has an off-
shore account is not evi-
GEORGETOWN, Guyana that specializes in offshore Fund and the Organization the region’s financial ser- dence of illegality,” said
(AP) — The 15-nation Ca- finance. for Economic Cooperation vices industry as more dis- David Marchant, the editor
ribbean Community and CARICOM said financial and Development (OECD), closures from the so-called of the OffshoreAlert news-
Common Market is fight- industry regulations in the the Financial Action Task Panama Papers are made letter and conference,
ing the perception that region fully comply with in- Force and the Caribbean public. It said the sector has scheduled for Miami early
the region is a tax haven ternational standards that Financial Action Task Force. taken all necessary steps to next month. “It’s certainly
after the huge leak of con- are overseen by such insti- The trade block urged cau- ensure compliance with in- suspicious, but you need
fidential documents from tutions as the World Bank, tion over the weekend ternational regulations and some kind of corroborating
a Panama-based law firm the International Monetary against unjustly labeling standards. evidence.”