The UK Treasury Department hired Mr. Foot, chairman of the UK-based Promontory Financial Group, to conduct a study for policy review, which he said will be ready by year-end.

His study will look at the nine UK offshore jurisdictions — including Cayman, Bermuda and the VI.

And, in a press conference in the premier’s office Tuesday, the chairman said, “territories like the BVI are well regulated.”

Int’l cooperation

Premier Ralph O’Neal has publicly stated that this territory has always been compliant when asked to disseminate information and maintain regulatory standards — the two main areas of offshore concern expected to be addressed at the G-20 summit.

“The BVI has always maintained adherence to all international standards of financial regulation and cooperation,” the premier said, adding that all recent requests to release information by the United States, UK and Australia have been satisfied. “The BVI stands ready to adapt to any new financial regulations that may emerge from the G-20 London summit and to make its contributions to the process.”

But even though the premier and other leaders here have spoken optimistically, potential devastation to the financial services sector looms ahead.

“You’ve always got to be concerned because there are always changes coming up, and you don’t know what changes there will be,” Mr. O’Neal said in a Sunday interview. “We just have to wait and see and react accordingly. We’ve got to be optimistic.”

‘A level playing field’

Since the early 1980s, the VI has attracted businesses from around the world — including the US and the UK — because of a lack of taxation and confidentiality policies.

The territory has since built the sector into its strongest economic pillar, accounting for an estimated 50-60 percent of the territory’s revenue.

But over the past few decades, the VI has faced the scrutiny of international watchdog organizations, such as the Caribbean Financial Action Task Force, that have caused its leaders to become more cognizant of the need to disseminate information to requesting countries about the trust companies, hedge funds and banks that support its economy.

Now, the premier said, the territory is compliant with all requests made to release financial information to international officials.

But, in order to adapt to any new regulations to come from the summit meeting, the VI must be on a “level playing field” with all places where financial institutions are allowed to operate tax-free, the premier said.

In the recent firestorm of criticism about financial centres, places like Singapore, Switzerland and Luxembourg have largely flown under the radar of G-20 leaders, he added.

Mr. O’Neal’s sentiments were reinforced by Mr. Foot and echoed by Robert Mathavious, managing director of the territory’s Financial Services Commission

Heavy pressure

The G-20 summit will be attended by financial leaders from 19 international economic powerhouses, including US President Barack Obama, UK Prime Minster Gordon Brown, and French President Nicolas Sarkozy, who have all voiced the immediate need for reform of the offshore  “tax havens” they say harbour business accounts that cheat their countries out of billions of dollars.

If they have their way, all financial centres will be required to provide on request any information about businesses and accounts registered in their jurisdiction, a policy that could be detrimental to economic growth in some financial centres.

And that’s a good thing, said Lucy Komisar, founder of Tax Justice Network USA, who argued that there’s no legitimate reason to keep those accounts hidden anyway, because such behaviour promotes criminal activity and tax evasion.

“There’s basically no reason to keep these accounts secret, unless you are trying to hide something,” the lobby group founder said.

If the G-20 really wanted to push financial reform to promote legitimate business ethics, they’d promote “automatic information sharing” that would allow enquiring countries to access data instantaneously, as opposed to waiting for request approval, Ms. Komisar said.

“There has to be automatic information sharing, otherwise [the G-20 summit] is a waste,” she added. “There’s no real solution here.”

Lucrative little investments

But UK business interests stand to lose a lot of revenue from any drastic measures taken against the offshore jurisdictions, and it’s important to acknowledge the contributions the small territories make to the world economy, Mr. Foot told government officials and the media Tuesday.

“I think the UK needs to remember that it gets a great deal of value and advantage out of jurisdictions such as the BVI,” the UK representative said. “Funds and business flow from there to the UK.”

Mr. Foot said his review, which he stressed was not an inspection, concluded that “the BVI is well regulated, is well resourced and resourceful.”

The consultant said he broke his review into three categories that focused on political authorities, regulators, and the private sector.

Mr. Foot said the time he spent with financial companies here helped him speak to misconceptions brought up by G-20 leaders who think offshore territories promote crime and tax evasion, he said.

“I think the most upsetting thing for a jurisdiction like this is to be subject to criticism that is not fair,” the Crown consultant said.

Reviving the economy

Along with facilitating Mr. Foot’s visit, accountants from around the territory gathered at Maria’s by the Sea last week to discuss the VI financial sector’s future.

Officials spoke to a group of about 50 local accountants, saying that the economy in the VI would prevail through any upcoming sanctions because tourism would drive it forward.

But aside from endorsing ethical business standards, no definitive plan was presented for the revival of the financial sector, should that become necessary.

While the VI traditionally has been supported by the financial pillar of the economy, the premier recently has suggested that a shift may need to be made to the tourism industry to avoid a potential economic collapse.

Along with boosting that industry, Mr. O’Neal said he has “many other ideas” to jumpstart the economy, including more emphasis on registering ships in the territory.

The VI recently has been upgraded to a category one shipping registry, which allows it to handle a higher volume of vessels.

Another test

The VI’s resilience has been tested over the years, and each time it has come back stronger, said Robert Mathavious, director of the Financial Services Commission.

“A stronger, better, more competitive BVI has always emerged,” the FSC director said. “We see [Mr. Foot’s review] as another opportunity to help us help ourselves; to spread the word near and far that the BVI is a compliant jurisdiction; is a jurisdiction committed to playing by international standards.”