The British Virgin Islands (BVI) has been removed from the European Union (EU) list of non-cooperative jurisdictions for tax purposes on October 17th, 2023.
The EU press release states: “British Virgin Islands was removed from the EU list of non-cooperative jurisdiction as it has amended its framework on the exchange of information on request (criterion 1.2) and will be reassessed by the OECD standard. Pending this reassessment this jurisdiction has been included in Annex II.”
This is a welcoming change that directly reflects the progress and hard work done by the BVI to meet the international standards set out by the OECD Global Forum regarding the exchange of information on request.
The BVI’s delisting was preceded by the Global Forum granting the BVI a supplementary review on 6 April 2023, see here.
Background to the listing of BVI from the EU list of non-cooperative jurisdiction
On 9 November 2022, the OECD Global Forum published its second-round peer review report on the BVI which downgraded the jurisdiction’s rating from ‘largely compliant’ to ‘partially compliant’. A rating below ‘largely compliant’ means a jurisdiction is automatically added to the European Union (EU) List of non-cooperative jurisdictions for tax purposes.
The ‘partially compliant’ rating given to the BVI covered the period from 1 March 2016 to 30 June 2020 for the exchange of information requests received (including a ‘block period’ from 1 September 2017 to 31 December 2018 due to the impact of Hurricane Irma) and assessed the legal and regulatory framework in place as of 9 September 2022.
Critically, the rating did not consider the legislative changes that were put in place in 2022 (including BVI Business Companies Amendment Act 2022, and BVI Business Amendment Regulations 2022) and which came into force on 1 January 2023.
Steps were taken to remove BVI from the EU list of non-cooperative jurisdictions
Immediately after the OECD Peer Review was published, the BVI Government requested a ‘supplementary review’ that would more accurately reflect the BVI’s current legislative status. This was granted on 6 April 2023.
The BVI is constantly implementing changes to strengthen its systems when necessary. It is considered an early adopter of international agreements to combat financial crime and promote the exchange of information.
BVI Finance announced in their communication: “We remain steadfast in our belief that robust yet practical regulation alongside compliance with the highest international standards is good for business. We will continue to protect and promote the reputation of the BVI as one of the world’s most respected and trusted financial centers.”
The recent development of the British Virgin Islands (BVI) being removed from the European Union’s list of non-cooperative jurisdictions marks a significant achievement and reflects the jurisdiction’s ongoing commitment to transparency and international cooperation.
This positive outcome underscores the strides made by the BVI in enhancing its regulatory framework and aligning with global standards of financial governance.
The removal of the BVI from the EU’s list of non-cooperative jurisdictions represents a validation of the jurisdiction’s efforts to address concerns and strengthen its compliance mechanisms.
By actively engaging with international stakeholders and implementing robust regulatory reforms, the BVI has demonstrated its dedication to fostering transparency, combating financial crime, and promoting responsible financial practices.
This positive development not only enhances the reputation of the BVI as a reliable and transparent financial center but also reinforces investor confidence in the jurisdiction’s regulatory environment. With its removal from the list of non-cooperative jurisdictions, the BVI is well-positioned to attract investment, facilitate economic growth, and contribute to the global financial ecosystem.
The BVI remains steadfast in its commitment to maintaining high standards of regulatory compliance and financial integrity. By building on the momentum generated by its removal from the EU’s list of non-cooperative jurisdictions, the BVI will continue to pursue initiatives aimed at fostering transparency, strengthening regulatory oversight, and promoting sustainable economic development.
The removal of the British Virgin Islands from the EU’s list of non-cooperative jurisdictions represents a significant milestone and underscores the jurisdiction’s positive trajectory towards greater transparency and international cooperation. By leveraging this achievement, the BVI is poised to further enhance its reputation, attract investment, and contribute to the global fight against financial crime.
Source: BVI Finance www.bvifinance.vg | www.bviglobalimpact.com
