The British Virgin Islands (BVI) has reversed recent trends by becoming the only offshore financial centre to have its rating boosted in the latest Global Financial Centres Index (GFCI).
The improvement comes against a backdrop of decline among all other offshore jurisdictions. The ninth edition of the GFCI (GFCI 9) revealed that the BVI has improved its GFCI rating by two points, securing 40th place in the rankings outright, having previously shared the spot with Brussels.
BVI’s achievement was made all the more remarkable by the fact that every other offshore centre fell in both the ratings and rankings, continuing a trend that began with the onslaught of the global financial crisis in 2008.
Sherri Ortiz, Executive Director of the BVI International Finance Centre, believes the BVI’s boost in the latest edition of the GFCI is testament to the centre’s ongoing commitment to regulation, transparency and continued growth in its financial services offering.
“We are obviously thrilled to witness the jurisdiction’s advancement in the GFCI ratings and gaining a higher ranking while so many others have slipped is a real achievement,” she said. “However, we know a number of threats continue to be mounted against offshore financial centres and we continue our work to position the BVI to strongly rebut these challenges.”
GFCI 9 has been published at a time when offshore financial centres continue to be subject to scrutiny from international bodies such as the OECD. However, the BVI has been on OECD’s “white list” of compliant jurisdictions since August 2009 and signed its 20th Tax Information Exchange Agreement, with India, in February of this year. The financial centre continues to be viewed internationally as a well regulated, cooperative and compliant jurisdiction; public revenues have also remained steady throughout the financial crisis.
In fact, an International Monetary Fund (IMF) report published in October 2010 indicated that the recent global financial crisis has not affected the health of BVI financial institutions. The report further acknowledged the BVI Financial Services Commission’s (FSC) cooperation as a full partner in international information sharing alongside the strength and independence of the BVI’s regulatory regime.
The BVI’s strong performance in GFCI 9 also confirms the findings of the June 2010 follow-up report by the Caribbean Financial Action Task Force (CFATF), published in October last year, where the team examined the capacity, implementation and effectiveness of the BVI’s institutional framework, laws, regulations and systems. The report found that recommended actions from 2008 have been met or adequately addressed the examiners’ recommended actions and concluded that “these measures demonstrate Virgin Islands’ commitment to complying with FATF AML/CFT standards”.