Kenneth Rijock

Kenneth Rijock

Thursday, June 7, 2018

CONSTITUTIONAL CHALLENGE BY BVI WILL FURTHER DAMAGE ITS BRAND AS AN OFFSHORE COMPANY PROVIDER

 
 The news this week is that the British Virgin Islands, reeling from the impact of its upcoming obligation of total corporate transparency, due to an Act of Parliament becoming effective in 2020, has engaged a prominent expert in constitutional law, to contest the legitimacy of the new law in court. Whether there are legal grounds to make such an argument, in defying the UK Government, in what many will surely consider a purely dilatory action, without merit, will not endear the BVI to the compliance officers at financial institutions in North America, and may indeed render BVI companies, which are the bulk of the local govetnment's source of income, completely unacceptable to hold assets abroad.

While many European financial institutions may continue to accept clients' active BVI companies,  compliance offices in the US & Canada, already smarting over their inability to conclusively identify the beneficial owners of such corporations, may just blacklist them altogether, due to the fact that there is total resistance to transparency. Let us also not forget that FinCEN, which could publish an Alert, warning US banks away from BVI companies, as account holders, sellers of assets, trustees, guarantors, and in all other categories where foreign corporations could be employed in transactional matters, because potential money laundering or financial crime threats of beneficial owners could be shielded from view.

If the British Virgin Islands want to retain the pedigree and legitimacy of the Crown, so that it can hawk the lucrative sale of BVI companies to Chinese tax evaders, corrupt PEPs, and other scoundrels, it needs to agree to transparency, and post a public corporate register forthwith. If not, then we must recognize that its true goal is to perpetuate opacity in corporate ownership. and redline BVI companies as high-risk, for all compliance purposes.

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