Madame Speaker, in previous meetings of this honourable house I indicated that I would give regular updates on the status of our negotiations with the United States on the Foreign Account Tax Compliance Act or FATCA as it is commonly referred to.
Madame Speaker, I am pleased to announce that as of Thursday of last week the BVI and the US Treasury have agreed on the final text to the Intergovernmental Agreement and the accompanying annexes and a Memorandum of Understanding.
Madame Speaker, the negotiations surrounding FATCA have been on-going since last year with a view to coming to a common agreement on a document that serves the interests of businesses and persons in the Virgin Islands in addition to the United States Government.
Madame Speaker, I have also indicated in the past that this Government took the decision to negotiate this Intergovernmental Agreement after consultations with the stakeholders here in the BVI to enable the most efficient and prudent means of sharing information.
This decision by Government of the Virgin Islands came under no obligation to conclude an IGA with the United States.
Madame Speaker, in the same manner as our colleagues around the world have done, we believe that this was the best decision for the BVI and our financial services industry.
Madame Speaker, the initialling of this agreement now paves the way for various administrative actions to take place that will now allow the agreement to be formally signed between the United States and the British Virgin islands. I expect this to happen within the coming weeks.
The IGA will be administered through the International Tax Authority in the Ministry of Finance to whom the Foreign Financial Institutions (FFI’s) of the BVI will report.
This will be done via a system that is currently being developed specifically for the purpose of providing an efficient and confidential manner of getting the requisite tax information to US authorities.
We have already begun Madame Speaker, to develop the Guidance notes that will accompany the FATCA Intergovernmental Agreement.
The development of guidance notes is standard practice and will eliminate any uncertainties in interpreting the agreement and its accompanying annexes by the institutions (FFI’s) that will be operating under the IGA.
I expect that these guidance notes will be available for a consultative process within the next month or two, and that the BVI will be ready for full implementation of FATCA in time for the deadlines set out by the United States.
Madame Speaker, I would like to conclude by thanking the people of the BVI and the entities that do business in this Territory for their patience and understanding while we negotiated an agreement that recognised the unique nature of the British Virgin Islands.
Thank you, Madame Speaker.