The BVI government has dropped its commitment to the introduction of public beneficial ownership registers.

In a statement on 8 December, it said "All of the Overseas Territories (OTs) and Crown Dependencies, have previously committed to the implementation of publicly accessible registers of beneficial ownership, commonly referred to as PARBOs, on the basis of European Union (EU) Member States' implementation of the EU Fifth Anti-Money Laundering Directive.

"However, the decision late last year by the European Court of Justice changed the international context, affirming privacy and data protection as fundamental human rights which must be respected and appropriately weighed when providing such access.

"Given this, the Government has determined that while the Virgin Islands does not fall within the ambit of the ECJ, in light of legal opinions received on the ECJ judgement and the constitutionality of creating a PARBO in the Virgin Islands, it considers that its approach must take into account the ECJ judgement to help minimise the risk of legal challenges on human rights grounds."

In reaction on high profile lawyer James Quarmby said on LinkedIn; "OH MY, THAT'S BRAVE ……

"In a gutsy move by the BVI government, it is dropping its commitment to introduce public beneficial ownership registers, using the recent EUCJ case of Sovim as justification. Given that the UK government has imposed a December 31st 2023 deadline for that register, this brings the BVI and U.K. governments on a direct collision course.

"The next question is - will the Crown Dependencies or any of the other Overseas Territories (such as Cayman) now follow suit ?"

In the government's statement Lorna Smith, Minister for Financial Services, Labour and Trade said; "the safeguarding of these fundamental human rights necessitates the application of a ‘legitimate interest test' to determine access for those parties whose request for beneficial ownership information is genuinely aimed at preventing or combatting money laundering and terrorist financing".

The Virgin Islands, have for many years, played a proactive and significant role in the international arena, battling against the misuse of its financial sector for money laundering, terrorist financing and other illicit purposes.

Transparency is key to this but so is respect for international law. The Minister has therefore confirmed that the Government will, continue to undertake the technical work of designing and building systems that deliver on its commitment to implement a PARBO consistent with the standards to be identified in the implementation review of the EU's Fifth Anti-Money Laundering Directive. But this will be done in way that ensures its human rights obligations are met.

Smith said "Our commitment to international standards is unwavering. We are not just participants; we are collaborators and leaders, sharing vital information and insights to aid global efforts in the fight against financial crime.  An example of this is our exchange of information agreement with the UK which has been critical in freezing over US$400 million in assets in accordance with relevant obligations under the Russian sanctions regime".

The Government further said it will continue to engage the United Kingdom (UK), and other partners on evolving regional, international and global standards and best practices in implementing PARBOs.