EU reviewing Annex I: BVI to be added to List of Non-Cooperative Jurisdictions in February 2023
Following a meeting of the finance ministers of the 27 EU Member States (ECOFIN) on 14 February 2023, it has been announced that the BVI will be added to the EU’s List of Non-Cooperative Jurisdictions for Tax Purposes (EU List).
The Council of the EU stated that: “British Virgin Islands are listed because they were found not to be sufficiently in compliance with the OECD standard on exchange of information on request (criterion 1.2). This is the first time this jurisdiction is listed.”
The decision comes after the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) assessment in November 2022 that the BVI was, on technical grounds, rated “partially compliant”. The analysis focussed only on the period 2016-2020, and therefore did not take into consideration important legislative developments in 2022 and 2023 that continue to ensure the effective and efficient exchange of information. Under ECOFIN’s specific operating rules, the Global Forum rating triggered an automatic addition to the EU List without taking into account any mitigating factors.
However, the Global Forum has recognised that exceptional circumstances, including the BVI’s recent legislative updates, justify a supplementary investigation, which is already in progress. These legislative updates, including the BVI Business Companies (Amendment) Act 2022, and BVI Business (Amendment) Regulations 2022, are focussed upon meeting the requirements set out by the Global Forum as part of its Peer Review Process, as well as to continue to comply with international best practices. If upgraded by the Global Forum to its previous status as “largely compliant”, the jurisdiction should be removed from the EU List.
The addition of the BVI to the EU List will be effective when published in the EU’s Official Journal, which is expected to take place in the next few days. It is important to note that this EU decision is limited in scope to EU member states and is not directly applicable in any other region in the world.
The BVI has always taken its international obligations seriously and remains fully committed to its role at the forefront of combatting financial crime in all its forms.
If you have any questions or concerns, please reach out to your key contact at Harneys.