REMARKS BY PREMIER AND MINISTER OF FINANCE
DR. THE HONOURABLE D. ORLANDO SMITH, OBE
ON THE OCCASION OF THE ONE YEAR UPDATE ON BVI FORWARD
WEDNESDAY, OCTOBER 12, 2016
MARIA’S BY THE SEA HOTEL
I am very pleased that you are able to join us this evening as we continue on our journey to strengthen our financial services sector.
We are all aware of what this industry has done for the BVI over the past 30 years. It has been the driving force in defining the standard of living we enjoy today.
My Government is committed to doing everything in our power to ensure it continues to be a major contributor to our economy and our way of life well into the future.
On September 17th 2015, a little more than one year ago, I was pleased to launch BVI Forward as the Government’s initiative representing our plans to set our financial services on a new path of sustainable growth.
BVI Forward is my Government’s response to international forces reshaping the global financial services industry.
As a significant member of the global financial system, we were not spared the devastating aftermaths of the global economic and financial crisis and the failure of the financial system.
The global system is still in a state of constant change as the global standard setters and regulators work to put new rules and laws in place to deal with the realities of a globalised world driven by technology.
It is quite simple: change is the only constant we can expect going forward.
Over the past year, a dedicated team of public and private sector stakeholders have worked diligently to execute the recommended changes outlined in the Financial Services Consultancy Report commissioned by my Government and approved by Cabinet in January 2015.
The Report provided an initial roadmap for 10 priority initiatives which we further refined into specific Action Plans to ensure that the changes were right for BVI.
We agreed that if we successfully executed these changes we will be able to build a solid foundation for the sustainable growth of the industry and be able to keep pace with the rest of the world.
We have now hit the one year mark of our two year commitment to make changes and I am pleased to report that I am convinced that we have now entered a new era in financial services in the BVI.
Over the past year, I have worked closely with the six Initiative Sponsors I charged with defining specific Action Plans for the 10 priority initiatives and the Financial Services Implementation Unit who I charged with implementing those changes. I am very encouraged by what we have achieved working together.
Let me share why I am enthusiastic about the progress we have made over the first year. Hopefully you too will be convinced and be as optimistic as I am about our future in financial services.
The vision we have set for the industry has three pillars which support the ten priority initiatives I mentioned.
The first pillar is to build best-in-class enabling mechanisms and enabling capability. The second is to expand into value-added services and the third is to remain a world leader in the core business of company incorporations.
Let’s start with the first pillar: Build best in class enabling mechanisms and enabling capability.
The first initiative under pillar one is to establish a Delivery Unit. In Year One we established the Financial Services Implementation Unit (FSIU) in September 2015 as I mentioned. I am sure you will be convinced by what you will hear this evening that the FSIU has met and exceeded all expectations.
Going into year two, the FSIU will be focused on executing a number of Cabinet decisions recently approved or on their way in the areas of Immigration, Labour, Investment, BVI Finance Limited and Financial services management.
The second initiative under the first pillar is to revamp the International Finance Center (IFC). In Year One, BVI Finance was re-branded and on January 1, 2017, will officially become BVI Finance Limited, (BVIFL), a company limited by guarantee.
This change will puts us on par with our competitors and will help us to accelerate growth, particularly in substance based sectors and give the BVI the marketing and business development muscle to be more competitive in the global marketplace by allowing the private sector to lead the promotion and business development functions of the industry.
An interim board has been established to manage the transition from a government department to a company and is currently developing a Strategic Business Plan for the period 2017 to 2020 to guide the development of the new organisation.
In year two, the interim Board will hand the reins over to the permanent Board in the first quarter of 2017.
The separation of BVI Finance Limited from Government will gives it the independence it needs to aggressively defend BVI financial services without binding the Government. A tool I hope they will use strategically to overcome the handicaps we carried for so many years.
A financial services function will be established under the Premier’s Office to facilitate a greater level of collaboration and synergy between the Government, regulator and industry in achieving the jurisdiction’s strategic and policy.
The third initiative under the first pillar is to strengthen the business development function. Mr. Gary Hales has joined the team in the role of Director of Business Development. Mr. Hales comes with a wealth of financial services experience having worked in various financial centres around the world.
The fourth initiative under pillar one is to Engage our Population. I am hoping that all of you would have heard or seen information on BVI Forward and the 10 priority initiatives.
This is the result of an intense and sustained multi-media awareness and public education campaign to build awareness of financial services among the wider population.
If you visit BVIForward.com, you will find a wealth of information, including downloadable articles published in the newspaper, video of shows and communication on all of the initiatives we are discussing today as well as news related to each. Please take a look.
In year two we will be taking the campaign to the wider community with public meetings, presentations to groups and organisation to help to foster greater ownership of the industry. This will be key to becoming a full fledge financial services centre. We must get the wider community to embrace the industry as part of our culture.
The last initiative under the first pillar is to build BVIslander capability. In year one, we developed a Memorandum of Understanding (MOU) between the Minister/Ministry of Education and the financial services industry represented by the various industry associations.
The MOU outlines several areas of cooperation designed to provide BVIslanders with a path to greater entrepreneurial and employment opportunities in financial services.
It sets out a structure that facilitates the delivery of training, working experience, counselling and mentoring to strengthen the qualifications and skills of BVIslanders so they have greater access to opportunities in financial services.
Financial Services Institute (FSI) has been retooled with the programme and resources to deliver a world-class certification and training programmes that are aligned with the current and future training needs of the industry.
In year two, our Mentorship programme will be launched to provide a vehicle for young people to connect with industry persons working in areas of their interest. Plans also include launching a Work Experience programme focused on providing young people with opportunities to work in businesses in which they have an interest in between school terms.
A Financial services entrepreneurship training is also planned that will help entrepreneurs to pursue opportunities within and related to financial services. I have also asked the team to initiate a programme to facilitate the return of BVIslanders to the Territory to engage in some of the growth and new activities being promoted.
Financial services industry professionals have committed to working with education officials to provide counselling to students, delivering financial services content in the classrooms and providing input to the financial services curriculum to keep it relevant and up to date to maintain student interest.
These are some of the most critically important activities of BVI Forward as it creates a path for the meaningful participation of BVIslanders in this pillar of our economy.
The second pillar is to expand into new value-added services. The first initiative under this pillar is to attract value-added services.
In year one, the Government is reviewing an Investment Policy that will facilitate the expansion and diversification of a substance-based economy by making it more attractive for businesses to be based in the BVI.
The policy will give the Cabinet the flexibility to respond to the needs of the market by amending requirements and benefits needed to meet market demand as changes occur.
By attracting and helping to create more substance-based businesses, the Policy will also help the BVI to address substance and transparency issues arising from the Base Erosion and Profit Shifting (BEPS) an initiative of the Organisation for Economic Cooperation and Development (OECD).
The policy will facilitate attracting the new areas we are seeking to develop, particularly in the area of greater substance. It will also appeal to the sectors we are already operating as we seek to diversify and grow them.
In year two, a full Investment Policy will be developed by the Investment Promotion Agency (IPA) and the Premier’s Office. The IPA and Investment Managers will be set up to facilitate targeted investments and investment promotion activities will be initiated in key product areas and in key markets.
The second initiative under the second pillar is to Reform Immigration and Labour.
In Year One, Immigration and labour laws and policies were reviewed with the objective of facilitating the financial services sector in line with provisions offered in competing jurisdictions and to accommodate the provisions of the Investment Policy.
A great amount of time was invested in understanding and mapping the operations and processes of both Labour and Immigration Departments to streamline processing time. Data and IT systems are being updated to support more efficient processing and in preparation for online processing.
Cabinet approved 30 recommendations made by the Initiative Team that addressed fundamental issues that have plagued the function for decades. The Departments and Ministry were fully engaged and have gotten fully onboard with the significant changes actioned.
A Cabinet appointed Task Force that includes the Permanent Secretaries of both Ministries and Department Heads along with the FSIU team are working hard to bring all 30 actions into force.
In year two, amendments to the Immigration and Passport Act 2013 will make provision for the entry of Business Visitors and online application and fee processing (e-government), just to name a few of the proposed additions.
Related changes to the Labour Code 2010 are under consideration as well and will be finalised in the coming weeks.
In year two, an Enhanced Service Model (ESM) for the parallel processing of Immigration and Labour requirements for a Work Permit will be introduced. It will entail one form submission, parallel background processing by both Labour and Immigration functions; collection of a Permit covering both Immigration and Labour clearance and electronic and online processing and payment of Work Permits
The third initiative under the second pillar is to Invest in Infrastructure.
We are addressing areas such as air access, sea transport, and telecommunications infrastructure.
The third pillar of our vision is to remain a world class leader in the core business of company incorporations.
The first initiative under this pillar is to Pursue tax initiatives. In year one, we were able to be removed from the French Blacklist and get a “largely compliant” rating from the OECD.
We have updated our anti-money laundering legislation and strengthened the BVI BC legislation.
We are fully compliant with all FATF requirements on beneficial ownership.
We have signed on to the Common Reporting Standards (CRS) and are developing a strategy for Base Erosion and Profit Shifting (BEPS) initiative of the OECD.
In year two we will implement the FATF beneficial ownership standard and action the BEPS initiative and implement the CRS.
The second initiative under this third pillar is Enhance FSC Customer Service.
In year one the Financial Services Commission (FSC) announced enhancements to the VIRRGIN system to facilitate expedited transactions and more efficient processing of registrations.
The Financial Services Appeal Board legislation has been passed, providing stronger resolution to regulatory disputes.
In Year Two, The FSC will launch VIRRGIN III to improve license interactions by automating the processing of regulatory forms, reports and processes. New FSC service standards will be published and the Registry Users Council will be established.
So there you have it.
My Government’s account of our accomplishments in year one of our two year commitment to set our financial services in BVI on a new path to sustainable growth.
I think we have done much to reassure ourselves and those with an interest in the future of BVI financial services that we have moved into a new era.
But the journey does not end here. As a matter of fact, it is just beginning. We have come this far by working as partners and we will need to redouble our commitment to our partnership if we are to complete our journey.
I look forward to your continued support of the BVI Forward initiative.
As I prepare to go off to Asia, the den of our success, I am going with good news and great expectations that our new era will lead us to many new opportunities there.
I hope you are as encouraged and as excited as I am with the direction we are headed. Please let us know your feedback so that we can continue to work collaboratively and as partners for the future prosperity of these beautiful Virgin Islands.
Thank you very much.