BVI slams leaks as 'illicit'

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 ROAD TOWN, BVI -- The government of the British Virgin Islands has called an investigation by the International Consortium of Investigative Journalists (ICIJ) into the British overseas territory "illicit" and is investigating how the group obtained information on BVI companies.
  According to BVI Premier and Finance Minister Dr Orlando Smith, the BVI authorities are actively investigating how this private information has been illicitly obtained and used to attack the BVI financial services industry, which operates compliantly within international guidelines and the law, the South China Morning Post reported.
 The names of thousands of owners of secret offshore companies are currently being published by the Washington-based International Consortium of Investigative Journalists (ICIJ), in collaboration with the Guardian newspaper and other international media.
 This follows the leak to ICIJ of a hard drive containing 200GB of internal files of offshore incorporation agencies in the BVI, Singapore and the Cook Islands.
 In one of the biggest information leaks in history, more than two million documents naming many individuals and detailing their financial dealings through offshore accounts were made available to the US-based ICIJ.
 The group has been making public bits of the information it has obtained, which has sparked worldwide reaction from governments and politicians.
 Britain’s prime minister David Cameron has come under pressure to act against the secretive offshore industry at June's G8 summit, as leaked evidence continued to mount that politicians and tycoons from all over the world have used the BVI to hide funds.
 A senior Liberal Democrat said the leaks showed the secret haven of the BVI "stains the face of Britain", as anti-corruption campaigners called for action.
 "How can David Cameron keep a straight face calling for the G8 to make big business pay tax when we let the BVI use British law and British protection to suck in billions in dirty money?" said Lord Oakeshott, a former Treasury spokesman.
 Robert Palmer of the campaign group Global Witness repeated the call for Cameron to act, saying, "The massive cache of leaked documents demonstrates how hidden ownership of shell companies facilitates corruption, tax dodging and other crimes."
 On Tuesday, the European Commission announced an action plan to combat tax fraud and evasion. Britain, France, Germany, Italy and Spain agreed to co-operate on a pilot information exchange system to catch tax dodgers.
 French President Francois Hollande has called for the eradication of tax havens and ordered French banks to declare all their subsidiaries, the BBC reported. He said his government would set up a central agency to fight fraud and corruption.
 Smith said the leak was an isolated incident. "There is no indication of contagion or that the breach was systemic. Also, no breach of BVI official databases has occurred," he said.
Smith said in his statement: "While the overwhelming majority of persons use international financial centres for legitimate purposes, there are those that will abuse the system. Where wrongdoing is discovered, appropriate enforcement action is and will be taken. We continually review our legislative regime to ensure transparency, co-operation and compliance with international standards."
 The BVI recently announced its commitment to concluding Foreign Account Tax Compliance Act negotiations with the US Treasury and entering a similar arrangement with Britain.