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by pltm
(PLTM) - Described as a ‘damned if you do, damned if you don’t’ situation, it had been divulged that even when the House of Assembly (HoA) passes the Economic Substance (Companies and Limited Partnerships) Act, 2018, there is still a chance of the BVI being blacklisted by the European Union (EU), as Legislators are unsure as to whether the EU will accept the legislation.
It has also been revealed that a short delay in debating and passing the bill in the House was experienced this week due to the EU constantly changing their expectations.
As Legislators debated the bill yesterday, December 18, Third District Representative, Hon. Julian Fraser posited that the passage of this bill equates to playing Russian Roulette.
He continued by saying, “We’re being told ‘yes, if you don’t pass this legislation you’re going to get blacklisted. If you pass the legislation, I’m not going to guarantee that you’re not getting blacklisted.’ What do you call that but Russian Roulette? We are between a rock and a hard place.”
He lamented the implications of the bill, such as the job losses and exodus of companies, telling those present, “This is a mammoth task...We ought to come to grips with the reality that we are in trouble.”
Achieving economic substance, he however argued, could also have a positive impact.
“If economic substance was to materialize, it would be a good thing for the Virgin Islands, real good thing, providing the Government of the day make sure that Virgin Islanders are the beneficiaries of the economic substance,” he said.
Meanwhile, Hon. Archibald Christian—who recently joined the Opposition side—said that with this bill and is passage, “our backs are against the wall.”
While the second reading of the bill was done yesterday, it was originally expected to be dealt with last week.
However, it was explained that up to Monday morning, changes directed had to be made to the document, due to the EU’s expectations shifting.
“This is the third day that we are meeting to deal with this bill and prior to this we met about two weeks ago with a number of persons,” Hon. Christian revealed.
These persons, he said, included the lawyer that assisted in drafting the bill and the consultant hired to work alongside him.
“The reasons why we have been having those meeting and coming back to this house on more than one occasion just to deal with one bill, is because the EU keeps on shifting the goal post,” he shared.
He views the entire situation as “A threat to shut the (financial) industry down.”
According to Hon. Christian, “We have done what has been required, so we spent the last three days, up to yesterday again, trying to comply with everything that is possible. We met here on Thursday, and by Monday morning, we are hearing ‘you need to make this change, you need to make that change, you have to take this out, you have to insert this, you have to insert that.’ And this is not the only jurisdiction to have this problem.”
The Economic Substance (Companies and Limited Partnerships) Act, 2018 is seeking to address the EU’S concerns that the BVI has insufficient economic substance requirements for entities, such as staff, premises and operating expenditure, and that the business environment is conducive to profit shifting.
