Caribbean Development Bank conducts assessment of BVI RDA in relation to US$65mln loan

The Caribbean Development Bank (CDB) is making the assessment of whether the Recovery and Development Agency (RDA) is capable of managing funds from US$65mln loan given to the BVI for reconstruction and rehabilitation purposes. During CDB’s annual media conference last week, director of projects at the bank Daniel Best said that they are waiting a report that should follow recent evaluation of the RDA.

At the moment, the Ministry of Finance of the British Virgin Islands is in conduct of money from the loan. It is suggested that the bank would give permit to central government to take control over the loan until the end of assessment. Also, the director said that they as a development institution need to ensure that the RDA is competent and capable of implementing the projects once the arrangement is sorted out.

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BVI FSC issued public statement on Global World Technology Limited

The British Virgin Islands Financial Services Commission has issued the Public Statement concerning Global World Technology Limited, to make the customers, creditors and general public aware that this company has never been registered in the British Virgin Islands, and never been licensed by the Commission to carry on financial services business.

Global World Technology Limited is circulating a forged business license falsely purporting to have been issued by the FSC authorising the company to conduct trading services as an entity regulated by the Commission. Members of public are cautioned against conducting any business with the named company.

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BVI among jurisdictions blacklisted by the Dutch Government

In the end of December 2018, the Dutch Government published a list of 21 low-tax jurisdictions which have corporate tax rate of less than 9 per cent. The Government will implement new anti-tax avoidance measures for the companies having business in these territories.

Among the countries on the blacklist there are the British Virgin Islands, Belize, the Cayman Islands, Anguilla, the Bahamas, and many others; it includes also five jurisdictions which are already on the European Union’s blacklist. All these territories will fall within the scope of new Dutch controlled foreign companies (CFC) rules, effective from January 1, 2019.

The new rules which are under the EU’s Anti-Tax Avoidance Directive are intended to ensure that the EU country in which parent company is domiciled will be required to tax certain profits that are parked in a low or no tax country. The company will get tax credit for any taxes paid abroad.

Also, the Dutch tax authority will no longer issue tax rulings to taxpayers regarding tax structures with companies domiciled in the listed above low-tax jurisdictions. The list is expected to be reviewed annually.

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Aura Minerals suspended operations at San Andres

Aura Minerals Inc., the mining company which two years ago redomiciled to the British Virgin Islands from Canada, made an announcement that one of its main assets, the San Andres gold producing mine in Honduras, has suspended mining operations because of the illegal occupation of its private lands. The company is working with the local and national governments to change the situation, but operations may remain suspended until satisfactory outcome is achieved. Also, the company is not updating its gold production and cash cost guidance.

Aura’s President & CEO commented, “We are obviously extremely disappointed and frustrated that we have experienced another invasion from a small number of individuals. These illegal actions are having a disastrous impact on the local communities, employees, vendors and contractors. We have the support of the communities shown through local agreements and a number of large community marches.”

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BVI postpones trade mission to Africa to focus on financial services

The proposed BVI trade mission to Africa which was planned to be held in November, has been postponed until the beginning of the next year. BVI premier and minister of finance, Dr Orlando Smith, who will be leading the delegation, instead will work in this period towards supporting BVI financial services sector.

This decision was taken because of the EU assessment of international finance centres, during which the Code of Conduct Group within the EU ECOFIN Council decided in March 2018 that it would like to have more information from the BVI about its tax arrangements. Since that time, the BVI government has continued to engage with the EU officials to provide all the required information. Elise Donovan, BVI representative to the UK and the EU, has to to focus on the EU, and so she remains in the UK. At the same time, she will be a key figure in the African trade mission, this is one of the reasons why it needs to be postponed.

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Dutch Government to include BVI in the list of low-tax jurisdictions

The government of Netherlands has started series of consultations, planning to review country’s tax treaty policy and make a list of low-tax jurisdictions to apply enforced incoming controlled foreign company (CFC) rules.

The CFC rule will be introduced by Netherlands from January 1, 2019. It will be in line with the requirements of the EU Anti-Tax Avoidance Directive, and will target low-taxed CFCs – that means the companies registered in the jurisdictions with statutory tax rate of less than 7 per cent. British Virgin Islands are among the countries which are to be placed on the list, and to which the new rules will apply. According to the press release of the Ministry of Finance, the list will be updated annually. Dividend, interest and royalty payments to BVI and other listed jurisdictions will be subject to the headline corporate tax rate in the Netherlands, which is currently 25 per cent.

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BVI company’s suspicious transactions investigated by US federal law officials

The news agency published information about the previously undisclosed complex web of financial transactions, which involved the transfer of money from Russia and Switzerland to the British Virgin Islands, Bangkok and New Jersey. The suspicious money transfers involved the participants of Trump Tower Russia meeting in June 2016. According to the documents, a billionaire real estate developer Agalarov close to both Donald Trump and Vladimir Putin used offshore accounts to filter money.

The investigation of federal law enforcement officials is focused on two sets of transactions. The first one was short time after the meeting, when a British Virgin Islands company Silver Valley Consulting controlled by Agalarov sent more than US$19.5mln to his account at a bank in New York. Some days later, the BVI company made a wire transfer through its Swiss bank account for a little more than US$19.5 mln to billionaire’s account in the US bank.

In total, Silver Valley made nearly 200 transactions for US$190mln between 2006 and 2016, and some of them looked suspicious. It was found out by US bank examiners that Silver Valley received nearly US$900,000 in 2012 from a person investigated for tax evasion in the past. Next year, the BVI company received two payments from an aviation firm whose shareholder was involved with a suspected money laundering scheme. All the transactions came to light after law enforcement officials asked financial institutions to look for suspicious deals that could be connected to Trump-Russia investigation.

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BVI company’s shares temporarily suspended on AIM

Premier African Minerals Limited announced that trading of its ordinary shares on the AIM stock exchange had been temporarily suspended from July 2, 2018, pending publication of the company’s annual report and accounts, which should have been published by June 30, 2018.

Prior to the temporary suspension, the BVI-incorporated mining and natural resource development company announced the decision to fully impair RHA Tungsten Mine, and to make the corresponding adjustments to the final draft accounts, which are now subject to final technical review and sign-off by the company’s auditors. The company expects to publish shortly the annual report and accounts for the year ended 31 December 2017.

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BVI FSC warned investors on Pyramid scheme frauds

The British Virgin Islands Financial Services Commission has issued advisory warning concerning Pyramid Scheme Frauds and other related investment scams. In the warning, pyramid scheme is defined as fraudulent money-making scheme based on non-sustainable business model that involves the exchange of money primarily for enrolling other people, without legitimate product or service. While legitimate trading schemes are based on valuable goods and services, illegal pyramid schemes focus on recruiting more and more investors. The members who join the group may get profit by signing up new members.

The deals of this kind are usually scams even if they look like a form of investment opportunity, for example, forex trading. It is a form of financial fraud. The commission provides more information on these fraudulent schemes, and how to avoid becoming their victim, on its website

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UK accepts amendment forcing BOTs to make public registers of beneficial owners

The amendment to the Sanctions and Anti-Money Laundering Bill, which was strongly opposed by the Organisation of Eastern Caribbean States (OECS), still was accepted by the UK government. According to the new provisions to the legislation, British Overseas Territories will be forced to issue public registers of beneficial owners of companies registered in each jurisdiction. The public registers should be developed by the end of 2020.

Earlier, the OECS noted that the issue of public registers is a matter for international financial regulation, led by the Financial Action Task Force (FATF). It does not require public register but that beneficial ownership information is accessible and verified by law enforcement or other competent authorities. Also, the BVI earlier stated that it will comply with such a requirement if it becomes as international standard. It also noted that the UK Register, while being public, is not verifiable, so it does not technically meet FATF requirements.

The OECS said in a statement in the beginning of this week: “While we recognize and respect the sovereign right of the UK to determine its national legislation, our concern centers on those provisions which are discriminatory to the BVI and which contravene the constitutional arrangement between the BVI and the UK by which financial services are formally entrusted to the democratically elected BVI government when the new constitution was agreed in 2007”.

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