On April 2016, as part of a crackdown on tax evasion, the British government announced that all of the crown dependencies and British overseas territories (including BVI) had formally agreed to exchange information relating to the beneficial ownership of companies to the UK law enforcement. Located in the Caribbean, the British overseas territory has come under scrutiny since April following the Panama Papers expose.
On 20th of April 2016, the British Virgin Islands have published the Exchange of Notes and Technical Protocols agreed with the United Kingdom (UK) Government relating to beneficial ownership of companies.
The agreement is part of a determination to ensure that the BVI, as the one of the pre-eminent jurisdictions for company incorporation, continues to have a best in class regime for beneficial ownership.
Under the agreement the BVI and the UK have mutually recognised the need to share beneficial ownership information for preventing and detecting illegal activity in both jurisdictions as well as the importance of sharing the information expeditiously. The main aim of the registry was to ensure that the BVI Government was aware of who beneficially owns the companies registered in the territory. However, a disagreement arose from the fact that the registry was expected to be made public.
While much debate has surrounded a UK demand that registries should be open to the public, Overseas Territories including the BVI and the Cayman Islands have successfully negotiated the establishment of these platforms, without the need to make them open to the general public. It is intended for the information in BVI to be held through an electronic portal that will be accessed by BVI competent authorities only. That information, will be shared with UK law enforcement agencies on request. For the BVI, its law enforcement authorities will be able to request from UK law enforcement all of its non-public (i.e. not available on the UK public register of companies) beneficial ownership information.
The British Virgin Islands platform will be held electronically and we be searchable by both name of corporate and legal entity and the name of the individual. Acting only on the furtherance of their functions, the UK law enforcement authorities will be able to request and access this information.
The most significant aspect of these technical protocols is contained in the response time relevant to any specific request. Under the agreement, which was signed on the 8th of April 2016, UK Law enforcement agencies will be provided with the information being sought within 24 hours as from the submission of a request for information unless it is notified that the request for information is urgent, in which case provisions have been made to provide this information within one (1) hour.
Harsh penalties will be imposed against those who would disclose to the parties being investigated any notice or details of what is released. The protocols also criminalize any disclosures of information in order to reinforce the severity of the offence. Under the agreement, law enforcement authorities will be given unrestricted access to information being sought which may be used in criminal and/or civil proceedings and may be disclosed by law enforcement authorities in accordance with the applicable legal provisions, including data protection and freedom of information requests.