In the beginning of the year, France has added the British Virgin Islands on the blacklist as a non-cooperative territory in tax matters, along with three new countries – Anguilla, Bahamas and Seychelles. The total list of non-cooperative jurisdictions now includes 13 countries.
BVI Premier Andrew Fahie has responded to BVI blacklisting: in a statement released on January 9, he noted that taking this decision France had overlooked the good tax cooperation between them and the BVI. He also said: “As our treaty partner, we continue to cooperate with France on an ongoing basis to meet our treaty obligations. However, there appears to be a misunderstanding and possible miscommunication on certain matters which we are working with our French partners to resolve.”
Premier Fahie expressed his confidence that all outstanding tax-related issues will be addressed within the BVI’s Tax Information Exchange Agreement and the jurisdiction will be removed from the blacklist soon.
It is worth noting that the BVI government had to constantly amend the number of legislations, including the Beneficial Ownership Secure Search System (BOSSs) and the BVI Business Companies Act to keep the territory from being blacklisted by a number of international countries and agencies.
The first public statement of 2020 was issued by the BVI FSC on 5 January 2020, informing the public about the entity named FXTRD LLC, which is circulating a forged investment business license and falsely purporting to be authorised and licensed in the British Virgin Islands to carry out investment business by being involved in investments as an entity licensed and regulated by the Commission.
The British Virgin Islands Financial Services Commission announced that FXTRD LLC has never been regulated or licensed to conduct any type of financial services and investment business in or from within the territory. Members of the public are advised to exercise extreme caution if solicited at any time to conduct business with FXTRD LLC.
According to French Public Accounts Minister Gerald Darmanin, France plans to add the British Virgin Islands to a blacklist for being “not cooperative enough in terms of financial transparency,” along with the Seychelles, the Bahamas and Anguilla. Since the Panama Papers leak in 2016, France has been investigating 500 offshore companies owned by French residents.
BVI Premier Andrew Fahie did not provide any comments, however BVI Finance CEO Elise Donovan said the relevant government agencies were working with French authorities to get more information. In the meantime, the jurisdiction has been passing legislation to comply with economic substance requirements from the European Union, to avoid being placed on the EU blacklist.
Seychelles Finance Minister Maurice Loustau-Lalanne called the decision “hostile, regrettable and disappointing,” and said that it would negatively impact the Seychelles’ economy.
The British Virgin Islands Financial Services Commission has issued the Public Statement regarding the company PITCHFOREX TRADE & FINANCE GROUP, INC., to make the public aware that this entity has never been licensed or regulated by the FSC to carry on any type of financial services in the territory.
The Commission informed the customers, creditors ar any persons who may have been conducted business with PITCHFOREX TRADE & FINANCE GROUP, INC. that the named company is circulating a forged investment business licence, falsely purporting to be authorised and licensed in the British Virgin Islands for the purpose of carrying out investment business as a company licensed and regulated by the FSC.
Aura Minerals Inc., the mining company registered in the British Virgin Islands, announced that on November 25, 2019 the equipment of Incobe, the main contractor at the company’s San Andres Mine in Honduras, was seized by local authorities in compliance with a court order. The wholly-owned subsidiary of the BVI company, Minerales de Occidente, S.A. de C.V., owns the surface and mineral rights at the San Andres mine. The reasons for the seizure are wholly unrelated to Aura or its contractor’s work at the mine.
On December 3, 2019, BVI company’s subsidiary was officially notified on the seizure. Also, on that day it signed Memorandum of Understanding with Constructora Cordon’s Heavy Equipment S. de R.L., the company in Honduras, which is mobilizing equipment to resume production at the San Andres mine. This is expected to start on December 6, 2019.
In the beginning of October, the government of Netherlands announced the launch of consultation on next year’s list of low-tax jurisdictions to enforce existing and future anti-avoidance legislation. The British Virgin Islands is among sixteen countries included on the Dutch list, as one of jurisdictions with corporate tax rates of less than nine percent, and as such it will fall within the scope of new Dutch controlled foreign companies (CFC) rules, which became effective from January 2019 under the framework of the EU’s Anti-Tax Avoidance Directive.
Also, from 2021 withholding tax equal to the Dutch headline corporate tax rate will be imposed on interest and royalty payments to the jurisdictions named on the list. From July 2019, the Dutch tax authorities do not issue tax rulings to companies which are established in one of these jurisdictions.
Belize, which was present on the 2019 blacklist, has been removed from the proposed list for 2020, however, tax avoidance measures will apply to this jurisdiction as it remains included on the EU’s tax blacklist.
British Virgin Islands Premier and Finance Minister Andrew Fahie has confirmed that the BVI government is suing its former attorney Lester Hyman, a director of the defunct airline BVI Airways. In a statement responding to questions about the lawsuit, Fahie said that the territory has interest in getting back US$7.2 million.
The case is now in the US Court, as the application was filed last month before the District Court of Columbia in relation to the above sum that was paid into the airline. The British Virgin Islands government is accusing Hyman, who is based in the United States and reportedly was a legal representative for the territory between 1987 and 2017, of “fraud at equity, breach of fiduciary care (trust) and loyalty, and negligence” in relation to the ‘failed airline venture’.
The sum of US$7.2 million was received by BVI Airways from the former NDP government to start direct flights between the BVI and Miami, US. However, later the airline laid off its staff, and the money have not been reimbursed.
China TechFaith Wireless Communication Technology Limited, the BVI-based developer, owner and operator of commercial real estate properties, as well as mobile solutions provider in China, has received a delisting determination letter from Nasdaq, setting forth a decision to delist company’s American Depositary Shares from the Nasdaq Stock Market. This became the result of BVI company’s failure to file its Form 20-F for the year ended December 31, 2018, and to disclose in time information relating to company’s investment.
It is stated in the delisting determination that the ADSs will be suspended at the opening of business in September 17, 2019, and a form will be filed with SEC to remove Techfaith’s securities from listing and registration on the Nasdaq, unless the company requests an appeal on the decision.
The company does not intend to request an appeal, and so upon its delisting the shares may be traded over-the-counter on the OTC Bulletin Board or in the “pink sheets” if one or more market makers seeks and obtains approval by the Financial Industry Regulatory Authority to continue quoting in the Company’s ADSs. This would probably have material adverse effect on the liquidity and value of Techfaith’s ADSs.
The British Virgin Islands Financial Services Commission has issued the Public Statement to protect the interests of any customers, creditors and persons who may have conducted business by Quiloxtrade, and to inform the general public that this company has never been registered in the British Virgin Islands, and has not been licensed or regulated by the Commission to carry on financial services activities in the jurisdiction.
Company’s website, www.quiloxtrade.com, falsely informs that the company is licensed in the BVI and regulated by the FSC to operate investment business and provide broker services through an electronic trading platform. However, Quiloxtrade is not and has never been licensed to carry on investment business and offer this kind of services in or from within the BVI territory.
BVI-registered agriculture technology company Origin Agritech announced that on June 5, 2019 received a letter from the NASDAQ Stock Market, informing that the company is not compliant with the listing rules.
According to the company’s Form 20-F for the fiscal year ended September 30, 2019, stockholders’ equity was US$3,396,000, while it is required by NASDAQ listing rule to have a minimum of US$10,000,000 in equity. Now the BVI company must submit a plan to NASDAQ within 45 days, of how to regain compliance. In case it is accepted, Origin will get an extension of up to 180 days from the Notice Date. If the plan is not accepted, the company will be able to appeal the decision.