Statement by Minister for Communications and Works Hon. Julian Fraser, R.A. Tenth Sitting of the First Session of the First House Assembly of the Virgin Islands

“Signing of MOU between the BVI and ASSI”
22 July, 2008

~~Adz:Left~~Roadtown; Tortola - Mr. Speaker, after a series of International events culminating perhaps, with the World Trade Center; and Pentagon bombings of September 11th 2001 in the United States, the BVI and by extension the United Kingdom, like every where else were made to look at the way their Air Traffic was being handled, and as a result, forced to make the necessary adjustments if they were to continue being a part of the global Air Navigational System.

The United Kingdom (UK), having responsibility for its Overseas Territories (OTs) sought to ensure that the same standards which applied in the UK, applied in its OTs.

In the case of the BVI Mr. Speaker, the review revealed that the need existed for a more disciplined, experienced and focused Director of Civil Aviation.  What then followed was the designation of Air Safety Support International (ASSI) by the Governor of the Virgin Islands to exercise all of his civil aviation regulatory functions, effective November 30th 2004.

One could imagine that this came at a price that was far reaching, the ramifications of which had far greater affect than its monetary impact, for it placed into question the very competence of the territories authority, and indeed, the way business was being conducted prior.

Since 2004 ASSI has been executing their duties on behalf of the Governor from their base in Antigua, and they have been performing admirably.  During that period, the BVI has attained Category 1 Classification under the Federal Aviation Administration (FAA) International Aviation Safety Assessment (IASA) Programme, and today the BVI stands ready to move to the next level in our relationship with ASSI.  Mr. Speaker, we feel, and ASSI agrees, that we are ready, and that they are willing to take us there.

It was in this regard therefore, that on February 27th 2008 Cabinet accepted a proposal for ASSI to provide a senior staff member to undertake the role of Director of Civil Aviation and simultaneously train a Director Designate nominated by the BVI Government.  Cabinet also agreed that the Government would contribute an amount not exceeding Six Hundred and Forty Four Thousand Dollars (US $644,000.00) per annum to ASSI’s cost.

Mr. Speaker, at a subsequent meeting on April 22nd 2008 between ASSI’s senior management; Staff of the Ministry for Communications and Works and me, a number of points were discussed and clarified.  Included among those points was my proposal for ASSI to relocate its Caribbean office from Antigua to the BVI; a detail I considered to be the key component in making this transition successful.  Emerging from this meeting Mr. Speaker, was the doctrine for a Draft Memorandum of Understanding (MOU) between the Government and ASSI. 

The Draft MOU being agreed and receiving its final legal touches, was presented to Cabinet on June 25th 2008 for approval, and received it.  Mr. Speaker, I am pleased to report, that on the evening of July 15th in the Arora Hotel in Crowley England, in the presence of:

The Director General, Civil Aviation Authority (UK): Mr. Peter Griffiths;

Chairman, Air Safety Support International: Mr. Roger Whitefield;

Chief Executive Officer, Air Safety Support International: Mr. Rod Dean;

Permanent Secretary, Ministry of Communications and Works: Mr. John Samuel;                      

Representatives from the Department for Transportation; and the Foreign and Commonwealth Office, the Board of Directors of Air Safety Support International; and Directors of Civil Aviation, Overseas Territories,

The Memorandum of Understanding between ASSI and the Government of the BVI was signed by me, on behalf of the Government of the BVI. 

Mr. Speaker, the MOU defines the terms of the agreement between the Government and ASSI, and it is to be used as the instrument for executing the arrangement between the two parties.  It makes provision for the parties to develop an Action Plan that will specify the activities and tasks to be completed in order to transfer the regulatory functions to the Director Designate.  The MOU is valid for a period of two years from the date of signature and may be renewed by agreement of both parties.

According to the MOU, ASSI will provide the services of their current ASSI Manager Caribbean, to carry out the functions of Director of Civil Aviation.  Also, by relocating to the BVI, ASSI will provide such additional technical and other personnel required for the proper regulatory oversight of Civil Aviation in the Territory. 

During the period of the MOU, the individual assigned will continue to discharge their duties as ASSI Manager Caribbean: which includes carrying out the functions of Director of Civil Aviation for Anguilla and Montserrat; however, the major emphasis of her work will be as Director of Civil Aviation for the BVI. 

Mr. Speaker, I taking our responsibilities seriously, so much so, that subject to the advice and opinion of ASSI, we completely and totally assumes responsibility for identifying and recruiting a suitably qualified candidate for the post of Director Designate, and additionally, any and all technical personnel required for the fulfilment of the designated regulatory functions. 

And further, under the terms, it is also agreed that we endorse the authority of ASSI’s staff to exercise the designated functions, and pursuant to the MOU, would not, without the express agreement of ASSI, take any actions nor give any undertakings, verbally or in writing, to any person that may conflict with the discharge of those functions. ~~Adz:Right~~

The BVI is aware that In order to retain the categorisation of BVI in IASA Category 1, it will be required to satisfy the FAA that effective safety regulatory oversight, compliance and enforcement are being applied, and only ASSI can provide us with such services at this time.  Luckily for us Mr. Speaker, the FAA has already accepted the legislative and regulatory framework operated and planned by ASSI as satisfactory, subject only to agreement that its implementation is satisfactory within the BVI.
  
ASSI’s presence in the BVI is seen as an asset to the BVI both in terms of necessity, and opportunity.  Mr. Speaker, for us, it couldn’t happen at a better time. 

Given the radical shifts in air travel on an almost daily basis, and the consequent needs for regulatory interpretations, and cooperation, no jurisdiction the size of ours could possibly stem the awesome potency of this tide.  It is therefore advisable, out of necessity that ASSI’s network of Directors of Civil Aviation be around to usher us through this period of enormous uncertainties.

Considering the fact that the BVI will suffer most severely by American Eagle’s upcoming cutbacks in airlift out of San Juan, Puerto Rico, we are therefore expected to be the most creative in making up for such lost.  Unlike other destinations which have the option to accommodate direct flights from Continental United States and Europe, our only option is to lean heavily on ASSI’s ability to regulate our uses of short runways and difficult approaches.

On the other hand however, Mr. Speaker, from the standpoint of opportunities, we see ourselves in the unique position of having gained Category 1 Classification under the FAA IASA Program, and having to take a decision on how best to take advantage of it.

To do that, we must now look at timing and possible options.  Given those circumstances, we believe that ASSI’s presence in the BVI encourages us to look at our assets, with the express view towards growing Civil Aviation industry. 

Mr. Speaker, one such area with tremendous potential is Aircraft Registry; and Aircraft Mortgage Registry.  And what makes the BVI attractive here, one might ask.  Well let us not loose sight of the fact that the BVI happens to be number one in Companies Registration, with a total of 851,595, and having 77,022 registered in 2007 alone.  BVI Registered Companies ranks second as a source of Foreign Direct Investment entering the Chinese economy, accounting for 23.3% or $12.91 Billion US of such investment.

With this success, there must be a track record: and there is, a good one I might add, and that record is the BVI’s long standing commitment to upholding the rules of every international agency, such as: the Organization for Economic Corporation and Development (OECD); The Financial Action Task Force (FATF); and the Caribbean Financial Action Task Force (CFATF), by ensuring good Governance, Transparency, guarding against Money Laundering, and keeping out undesirables through the enactment of proper Legislation, and vigilance in enforcement.

Mr. Speaker, Government is of the same view as ASSI, that given their being designated by the Governor and appointed by our Government as DCA, there is an opportunity for our locally established foreign aircraft operators to relocate their base of operations to the BVI, particularly as the BVI is now classified as Category 1 under the FAA IASA Programme.

Such a move would have the effect that an operator setting up in the BVI can now commence services to US territories using BVI registered aircrafts, or operating on a BVI Air Operator’s Certificate (AOC), subject to compliance with the air services arrangements agreed between the UK and the USA.

Mr. Speaker, we are aware of the many enquiries to ASSI regarding applications for Air Operator’s Certificates (AOC), and also concerning the registration of aircraft, both for locally based operations and for off-shore: particularly corporate jet operations.  This high level of interest, so early is no doubt due largely in part to the BVI’s number one ranking in companies’ registration.

We are also aware that the achievement of IASA Category 1, as noted earlier, is expected to lead to a marked increase in the number of such applications.  And while not anticipating any significant problem in meeting the expected demand in the short term, we remain cognizant of ASSI’s limited resources, and stands prepared to effect the engagement of additional resources as the need arises to ensure that ASSI remains effective in its obligations, both to us and the FAA.

Mr. Speaker, we take seriously the advice we have been getting from ASSI, in this endeavour, and moving forward we will be establishing a policy on Aircraft Registration, and Aircraft Mortgage Registration.  I see them both as being mutually beneficial to the BVI.  It is hoped that this policy could be agreed shortly, and baring any unforeseen challenges, the BVI could be open for business by year’s end.

Mr. Speaker, the evening went well, attendance at the reception was beyond all expectations, and indeed as intended, I took advantage of what was truly a rare opportunity for the BVI to have had within such a fantastic setting some of the most important people in the industry present, and in partnership with ASSI, to give notice that the British Virgin Islands are gearing up to becoming a formidable player in the business of Aircraft Registration; and Aircraft Mortgage Registration.

Coincidentally Mr. Speaker, while in London I took the initiative to dine with representatives of two BVI Trust Companies with London Offices, so as to express our Government’s continued support for their value to our economy, and listen to their views on how best we can grow the industry, while at the same time remain competitive.  And interestingly enough, the topic of Aircraft Registration; and Aircraft Mortgage Registration came up, and it was hailed as a long awaited, much spoken of addition to the BVI product line.  I was told of the many inquiries, and the anticipation of our readiness to do business.  Mr. Speaker, I was to say the least very encouraged at its reception.

In closing Mr. Speaker, let me acknowledge the support I have received from Mr. Rod Dean: CEO of ASSI, a fine gentleman, with a great organization.  The officers at ASSI, in particular Captain Margaret Wilson, in whose hands lies all these great plans for the future, and with whom I must work.  Also thanks to Mr. Samuel: Permanent Secretary for the Ministry of Communications and Works, who witnessed the signature, thanks to the Premier, without whom none of this could be possible; and to the Governor, for his willingness to see the Director of Civil Aviation back in local hands, despite his conditions.

Thank you.