British Virgin Islands Accused Again of Concealing Dirty Money and Holding St Helena Back
The BVI has for years been the global destination of choice for those seeking maximum secrecy for their money, often tax dodgers and dictators who steal £billions from government funds. The territory has featured prominently in global money-laundering investigations.
Roman Abramovich is suspected of exploiting exploited Britain’s offshore havens to funnel wealth through Cyprus to the BVI and dodge up to £1bn in UK tax. That sum exceeds even Bernie Ecclestone’s record-breaking £652mn civil settlement.
This long-running BVI tax dodge saga is said to have helped push back St Helena’s attempts to get full international banking facilities operational on-island. The required licences and registrations for international banking are difficult to get. In his book, former Governor Smallman suggests the perceived attitude is that another British Overseas Territory which might operate a financial centre in the same way as BVI, is definitely not wanted.
Read more in Friday’s St Helena Independent.
This BVI article is interesting because of the issues of international money laundering…. a serious matter….
I was coincidentally doing some web research recently and found that BVI don’t tax the interest earned on an individual’s ( pensioner’s) bank savings and investments , one of 13-odd countries that don’t… It occurred to me that if St.Helena wants an inflow of foreign investment , that practice might be worth consideration…?…just saying…
The IMF (reportedly) don’t recommend taxing the bank interest earned by pensioners on their saved money either.. ( they are silent on the matter) ..any comments..?
Kind Regards
( from an anonymous South African possible future offshore investor)
This is symptomatic of a wider problem, namely one set of BOTs being made guilty by association, as the Falkland Islands Chamber of Commerce pointed out in its report into banking services in 2023.
incidences and impact of digital fraud.
https://www.commerce.co.fk/wp-content/uploads/2023/03/Banking_Report.pdf
8. There are opportunities for collaboration with other British Overseas Territories to raise
awareness of the British Overseas Territories, the shared challenges faced in relation to banking
and to build new capabilities on a shared basis.
Awareness of the British Overseas Territories, what they are, their relationship with the United Kingdom
and the challenges they are facing is lacking. In the banking fraternity the assumption might be that they are all international finance centres with a read across being made from the Caribbean territories. As a result, territories such as the Falkland Islands, St Helena and Ascension, and South Georgia may be regarded as higher risk territories which could be a factor in framing appetite for UK based banks to offer services on a ‘remote’ basis. We know that a number of firms operating in the Falklands do have legacy relationships with UK banks and whilst these banks have indicated they are content to maintain their existing arrangements they are not inclined to open new accounts for them.
For those territories which do not have an international finance centre it might be useful to work together to raise awareness with politicians in the UK, perhaps through relevant All-Party Parliamentary Groups and the UK Overseas Territories Association. This outreach might also usefully extend to include a number of the key trade bodies including UK Finance. By working collectively, there is a greater propensity to help educate key UK stakeholders about the unique character, identity and challenges facing the islands and the British diaspora who live there.
A number of the Territories need to update their banking legislation and regulatory architecture. A number have banking legislation which has not been updated for some considerable time and now needs to reflect the latest international standards in terms of Basel prudential accords, consumer protection, and recovery and resolution. The scale issue is not just a challenge that commercial banks face – operating regulatory architecture to cover relatively small populations inherently causes diseconomies of scale and accessing specialist expertise can be cost prohibitive.