May 28th, 2018 -- British Virgin Islands (BVI) diplomat Benito Wheatley has told Number 10 Downing Street that the United Kingdom (UK) Government has undermined the partnership between the BVI and the UK at a critical time when the islands remain extremely vulnerable and are recovering from two devastating category 5 hurricanes in 2017, while preparing for an active 2018 hurricane season.
The admonishment came at a meeting at Number 10 on 24 May 2018 between Overseas Territories (OTs) Representatives and Sir John Randall, Special Advisor on Environment to UK Prime Minister Rt. Hon. Theresa May.
The BVI’s UK Representative told Sir John that the UK’s decision to seek to force public registers of beneficial ownership on the BVI before it is a global standard will negatively impact the jurisdiction’s financial services sector that accounts for more than 60% of government revenue which is critical to the islands’ recovery from Hurricanes Irma and Maria and Government’s efforts to build resiliency to stronger storms and greater rainfall caused by climate change.
“The UK Government is well aware that the BVI’s tourism industry was largely wiped out by last year’s hurricanes and that financial services is the only revenue stream the BVI Government has left from which to maintain public services such as the national health service, primary and secondary school education, law enforcement and the courts and assistance to the elderly, poor and unemployed” Wheatley said. He went on to say that,
“The UK is not providing grants to the BVI to rebuild climate resilient infrastructure after last year’s hurricanes. The BVI Government must take out commercial loans on the back of financial services in order to do so. Impeding our ability to secure such loans by undermining the financial services industry is not in the interest of the people of the BVI or the UK Government.”
Wheatley also reminded Downing Street that the UK Government provided Dominica with £14 million for climate resilience after Hurricane Maria and that no financial support of this type was given to the BVI as a British Overseas Territory.
He also expressed concerns about the UK Parliament legislating for the Overseas Territories in areas where powers have been devolved to the Territory governments and where there is no international legal obligation upon the UK to intervene in the territories to dispense its sovereign obligations.
According to the BVI’s chief diplomat, the decision by Her Majesty’s Government to seek to force public registers on the Overseas Territories is a deviation from UK Government policy set out in the 1999 UK White Paper – Partnership for Progress and Prosperity that sought to shift relations between the UK and OTs from a colonial relationship to a modern partnership based on mutual respect and mutual responsibility.
“The established practice since the 1999 White Paper has been for the UK to respect the constitutions and self-governance of the Overseas Territories by intervening in their devolved areas only where necessary to meet international legal obligations, after consultation, or to restore good governance. The UK decision to impose public registers on OTs is a departure from this policy as the OT Financial Centres have actually demonstrated excellence in meeting international standards on beneficial ownership set by the Financial Action Task Force (FATF). This sets a precedent for the UK to legislate for the OTs in other areas devolved to the Territory governments where nothing has been done wrong,” Wheatley said.
Commenting on the decision of Her Majesty’s Government to impose public registers on the Overseas Territories, he went on to say,
“We are very disappointed with the UK decision. Particularly since the OTs worked very closely with the UK Government to lobby Members of Parliament to reject public registers for OTs in the House of Commons. We were clear that the Overseas Territories would adopt public registers when it becomes a global standard. The UK Government gave in to political pressure and accepted an amendment to impose public registers on OTs as opposed to allowing a vote by the numerous Members of Parliament who were against such a measure. The decision was compounded by the UK Government’s request at the same time in the Commons to exempt the Crown Dependencies of Jersey, Guernsey and the Isle of Man from adopting public registers as well. The UK Government is aware that they have damaged relations with the OTs as their actions have undermined their self-governance which is not in the spirit of either the partnership envisioned in 1999 or Article 73 of the UN Charter and demonstrates clear bias.”
The Sanctions and Anti-Money Laundering Act 2018 received Royal Assent on 24th May by Her Majesty the Queen which contains the provision that the Overseas Territories must adopt public registers of beneficial ownership by 31st December 2020.
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