ROAD TOWN, BVI: The Managing Director and ChiefExecutive Officer of the British Virgin Islands Financial Services Commission, Robert Mathavious, has spoken about the problems facing the financial services sector.
In an address entitled "Challenges and Developments in the Regulatory Environment" delivered in Tortola on Wednesday, Mathavious said, "Within the world of international finance, 2008 proved to be a most turbulent and troubled year for business and there is every prospect of an even tougher year to come.”
“All over the world, the climate against so-called tax havens is hardening as a result of the growing need for countries everywhere, particularly OECD countries, to boost tax revenues at a time when the recession is cutting their tax take,” Mathavious continued. “Even more than in past years, for offshore financial centres in general, and particularly those like the BVI who are associated with the UK, these are challenging, daunting and stressful times.”
He added that the turmoil within the global financial markets had placed the activities of offshore financial centres under greater international scrutiny and has given the enemies of the offshore world a renewed platform from which to intensify their attacks against offshore financial centres (OFCs).
Mathavious, who is regarded as one of the leading financial services specialists in the Caribbean, added that the alarm bells should be ringing for us all.
“We may very well be seeing the preconditions for a perfect storm bearing down on the OFCs,” he warned. “If we here in the BVI do not act promptly, pragmatically and sure-footedly to demonstrate that we are a legitimate, convenient, compliant and cost-effective jurisdiction with zero tolerance for the ethically challenged, for tax cheats, fraudsters and for any form of white collar crime, the threatening tsunami could sweep us off the offshore map."
He added that increasing fiscal deficits in OECD countries, the near collapse of global banking systems and the failure of a number of blue-chip firms perceived as being of such systematic importance to warrant bailout by government have all evidenced the fragility of the world's financial, stock and currency markets.
“They have also drastically increased the need for OECD governments to raise revenue for their ambitious public expenditure programmes and have given the IMF new life and purpose,” he said.
Mathavious pointed out that plans were already underway for a revitalised OECD initiative against so-called tax havens, with a clear distinction between countries that have effectively implemented standards and commitments on transparency and exchange of information on tax matters.
BVI is one of the leading offshore jurisdictions in the world, with more than 700,000 offshore companies registered in the territory.