Tiny British Virgin Islands has big role in leaked documents

Ben Fox and Kenneth Silva, Associated Press

 

Updated 3:31 pm, Saturday, April 9, 2016

 

 
 

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Photo: Todd VanSickle, AP

FILE - This April 3, 2009 file photo shows a general view of Road Town, Tortola in the British Virgin Islands. A thriving financial services industry that evolved over the last 30 years, the British Virgin Islands has come under scrutiny like never before thanks to the leak of confidential documents from a Panama-based law firm that specializes in offshore finance. less

TORTOLA, British Virgin Islands (AP) — A thriving financial services industry that evolved over the last 30 years in the British Virgin Islands made it one of the most popular places in the world to form a corporation, turning a sleepy cluster of Caribbean islands into a global hub of finance.

Now the British Virgin Islands has come under scrutiny like never before thanks to the leak of confidential documents from a Panama-based law firm that specializes in offshore finance.

More than half the 200,000 offshore companies set up by the Mossack Fonseca law firm, including ones owned by the father of British Prime Minister David Cameron and relatives of Chinese leader Xi Jinping, were registered in the BVI, according to reports coordinated by the International Consortium of Investigative Journalists.

BVI officials have sought in recent days to address the reports while defending financial oversight in a territory where incorporated entities outnumber residents by a ratio of more than 10-to-1 and blue-suited lawyers and bankers on the streets of Tortola often outnumber tourists.

"If you see articles that say jurisdictions like the BVI are facilitators of illegitimate activity, that is incorrect," Financial Secretary Neil Smith said Friday. "Yes, it occurs, but it also occurs in jurisdictions that are not seen as offshore financial centers."

The British Virgin Islands, an overseas British territory of about 30,000 people near Puerto Rico, is the world's leading center for company incorporation, according to the Tax Justice Network. More than 1 million enterprises have been incorporated since 1984. There were 450,000 active ones at the end of last year, according to the Financial Services Commission.

The problem, as critics of offshore financial secrecy see it, is that the BVI and other jurisdictions enable the hiding of the true owners of companies in ways that allow corruption and criminality to flourish. "We're not saying that shell companies or tax shelters need to be done away with, we're saying that more of this needs to be out in the open," said Mark Hays, a senior adviser with Global Witness.

The Tax Justice Network says the BVI has a "lax, flexible, ask-no-questions, see-no-evil company incorporation," system. "The BVI has long been linked to wave after wave of scandals," the organization said in a report that ranked the BVI at number 21 on its financial secrecy index. The U.S. was No. 3 and Switzerland No. 1.

But the Tax Justice Network also notes that the British Virgin Islands has made significant improvements.

An amendment to the territory's Business Companies Act that went into effect Jan. 1 requires companies to keep their beneficial ownership information within the BVI. There is also a new requirement for companies to file a list of their registered directors with the Financial Services Commission. The changes are expected to help curtail money laundering and other criminal activities.

Defenders of the offshore industry say that the BVI is no different than other places that offer anonymous corporate registries, including Delaware, but that some people would prefer to do business in an established, stable, low or no tax jurisdiction outside the United States. The BVI had traditionally attracted Asian and European clients, which may be one reason so few U.S. citizens have been named in the reports on the leaked documents.

Even people who have criticized the offshore industry in the past for weak regulation say there are legitimate reasons to set up a corporation or trust in a place like the BVI. Some businesses need offshore entities to run subsidiaries and people who live in dangerous places may have legitimate reasons to disguise their assets.

"The mere fact that a foreign national has an offshore account is not evidence of illegality," said David Marchant, the editor of the OffshoreAlert newsletter and conference, scheduled for Miami early next month. "It's certainly suspicious, but you need some kind of corroborating evidence."

Reports based on the leaked files have so far revealed assets held by trusts and companies registered overseas by a large number of foreign leaders and global celebrities.

No one at the Mossack Fonseca branch in the BVI would comment but a former administrator, Byron Hodge, said employees were instructed not to proceed with a registry without confirming the identity of the true owner of the entity being incorporated while he worked there from 2008-2015.

"The checks and balances to ensure this were enforced," he said. "With that being said, if there was any wrong doing that occurred, it wasn't in the (BVI) office."

The BVI government said in a statement after the first accounts began to emerge that it would conduct a "thorough investigation" to detect and prosecute any illegal activities.

Premier Orlando Smith said an investigation, which was being conducted by the Financial Services Commission, had already begun. It wasn't his only concern, though. He also wanted to make sure the revelations don't damage an industry that supplies more than 60 percent of his government's revenue, surpassing tourism as the most important industry for the BVI.

"We have to mount a robust response, and we have done that," Smith said. "More and more people are now coming out in support of the BVI."

The Lie Told against Palm Oil by the West

April 7, 2016 Thisday news online

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Over 70 percent of Nigerians use Palm oil

The claim by western heart associations over the years that palm oil is harmful to the heart has been challenged by the Nigerian Heart Foundation, international heart bodies and experts across the globe. Instead, they believe palm oil is a healthier oil for the heart than western vegetable oil. Martins Ifijeh chronicles this argument

Palm oil, which has been the toast of vegetable oil in West African and Asian continents, soon gained prominence in other continents of the world, with North America and Europe leading the pack among regions that had joined in embracing the oil for their diet. The Americans once referred to it as the magic oil, because of the unique flavour, flair and many desirable characteristics it gave to food.

But many decades after, America and some western countries have launched a campaign against the oil which has been used as a staple for diets, even in their countries, for several decades. According to them, it contains an artery clogging saturated fat that causes heart disease. A campaign that has gained prominence in those countries through their various heart foundations, associations, and most significantly, through their media apparatus, thereby preventing their citizens and visitors from patronising the use of the staple, for any of their diets.

By extension, the campaign has been taken to other countries of the world, including Nigeria, so as to convince them to de-emphasise the use of the oil, while denying them the benefits that come with it, as well as to convince them to embrace the use of foreign vegetable oil, like the Soy beans oil, which they say is a lot more healthier domestic oil than the palm oil. They also argued that, since they have branded it unfriendly for the heart, there was need to replace it across the globe, even in countries like Nigeria where over 70 per cent of its citizens use it, almost for every meal.

In these western countries, it wasn’t long before food companies began to dissociate themselves from the once-regarded magic oil, while switching to their own indigenous soybean oil, for fear of not getting a heart disease.

According to the Australian Heart Foundation (AHF), American Soy beans Association (ASA), the Centre for Science in Public Interest (CSPI), which has been spearheading the campaign across various regions of the world, they argued that since palm oil contains saturated fatty acids, it must therefore contain cholesterol, or it may raise blood cholesterol, which in some way can promote heart disease.

They are also pushing for the ban of palm oil because, according to them, those who patronise it were likely to die earlier than those who don’t. They believed people from Nigeria, Malaysia and other palm-oil-loving countries would have higher heart attacks and strokes, than them who no longer see need to patronise it.

But in a swift response, experts across the globe, professional health bodies, several heart foundations, including the Nigerian Heart Foundation, (NHF) wondered how this deduction came about, considering that palm oil contains enormous health benefits, including the ability to prevent the same heart diseases, cancers, night blindness, as well as provide vitamin A and E to the body.

They also believe the campaign was a misplaced one targeted at making the Tropical oil unpopular, while theirs (the western oil, like the Soy beans oil) gain prominence in a bid to boost its economic value across the globe, while the palm oil business suffer, and at the detriment of palm oil lovers, who also benefits from the health benefits associated with it.

For instance, according to a cardiovascular health physician and the Executive Director of the Nigerian Heart Foundation, Dr. kingsley K. Akinroye, palm oil, which is Nigeria’s most popular vegetable oil, and which has served the country since its birthing, is heart friendly and consideration should be given to the documented addictive effect of Oleic and Linoleic acids in the oil that has the capacity to reduce the level of cholesterol.

“If you look at the argument by these various anti-palm oil ‘activists’ you will agree with me that it lacks scientific proof, because even Nigeria where 90 per cent of rural dwellers use the oil and almost 70 per cent of urban dwellers use it, we are less prevalent to ischemic heart disease than them who claim not to use it. The prevalence of ischemic heart disease in Nigeria is even less than 10 per cent, compared to theirs.

He therefore pushed that the country’s heart foundation was committed to having a healthy population given the benefit of the rising profile of unhealthy lifestyle in the population.

But in a broadened response to the campaign against palm oil, the author of Palm Oil Miracle, Dr. Bruce Fife, believed the claim that palm oil contains substances which trigger heart disease was only a matter of greed and selfish interest by the promoters, and that the claim was devoid of any medical inference.

According to him, the attack against the oil was a cleverly designed publicity campaign sponsored by the vegetable oil industry in the United States, as a means of increasing profits for their own type of oil.

“The domestic vegetable oil in the US has been trying to capture the imported oil market for decades, because their indigenous oil is not the most patronised across the world,”

Fife said when the bodies first started the campaign, it was about pricing, but when they discovered they couldn’t lower their prices below how much the palm oil sells, they focused on other means of subduing their competitors.

“In 1930s, they were successful in getting Congress to impose sales tax on palm oils. This then increased the price of palm oil, which made many customers switch to their domestic oil. Though this strategy worked until 1966 when the tax was suspended, hence the palm oil again started to gain prominence around the world. I believe this new pattern, which is to brand palm oil as an unfriendly oil for the heart, is again aimed at subduing the oil.

He said as the attack on palm oil continued, researchers, experts and some heart foundations who knew much about the benefits of palm oil, came to the defence of the West African/Asian oil, hence the resolve for a congressional hearing in 1988 to finally settle which oil to adopt and which to discard.

The experts against tropical oil (which the palm oil belongs) made presentations and gave reasons why the oil was not good for the heart, while lipid and cardiovascular researchers not on the payroll of the big anti-palm oil groups made their claims as well.

A Harvard Medical School Researcher, Dr. George Blackburn, testified that this oil does not have a harmful effect on blood cholesterol, even in situations where they serve as the sole source of fat. It was opined that palm oil and coconut oil have been consumed as a substantial part of diets by many groups of people for thousands of years, with absolutely no evidence of any harmful effect.

At the end of the hearing, the evidence against the tropical oils didn’t stack up. It was also concluded that those against palm oil do not have enough information on the benefits of the magic oil.

It is to this end that the Nigerian Heart Foundation, aims to hold a national summit on ‘Lipids and Cardiovascular Health in the Nigerian Population’ in a bid to define the NHF position on cardiovascular health with reference to palm oil and its derivative effect on the population, level of lipid profile in vegetable oils and what zero cholesterol in vegetable oil means to the health of the people. Also, the significance of the high level of saturated fatty acid contained in palm oil needs to be ascertained in the African population through evidence-based research.

The summit, which will be held April 21st, at the National Institute of Medical Research, Yaba, from 9am to 2:30pm, would have the Federal Government fully represented, as well as stakeholders in the health, pharmaceutical and vegetable oil industry, in order to put to rest the controversy surrounding the benefits and ‘curses’ of palm oil. It would also aim to discuss how best to boost the country’s economy through the cultivation of palm oil and its exportation to other countries.