28 January 2021
British Virgin Islands’ (BVI) shell companies have repeatedly played a role in notorious global crime schemes. Nonetheless BVI has the reputation as one of the world’s most dependable tax havens. Around 400,000 offshore companies are registered in the island of 30,000 people.
Last week, outgoing BVI Governor Augustus Jaspert announced a commission of inquiry to investigate allegations of corruption and the misuse of millions of dollars in public funds. Governor Jaspert mentioned in his Facebook posting that $40 million earmarked for COVID-19 relief was allegedly siphoned to political allies. In another case under investigation, the BBC reported, cocaine worth almost $250 million was found in the home of a local policeman.
The inquiry is backed by the United Kingdom. The U.K. oversees the BVI as an overseas territory. BVI governs its domestic affairs and raises its own taxes but relies on the United Kingdom for defense and diplomatic matters.
U.K. foreign secretary, Dominic Raab, said in a statement to parliament that a consistent and deeply troubling array of concerns have been put to the Governor by local institutions and the community and such serious allegations cannot be ignored.
When UK exits the European Union (EU), it is very likely that EU will black list BVI for being a tax haven. This will have an impact on the number of companies registering in BVI.
Premier Andrew Fahie said that the action of the the immediate past governor Augustus Jaspert in appointing the Commission of Inquiry (COI) was irresponsible and damaging to the territory. He also questioned why the entities under the portfolio of the past governor have not been investigated. It should be noted that the Prime Minister is elected by popular vote, the Governor is appointed by the monarch on the advice of the British government.
Bvinews and ICIJ reported.