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A wave of international rulemaking threatens Caribbean tax havens

From The Economist

Their old wheezes are running out of steam

In jJanuary2024 a court in Miami will start hearing an unusual trial: that of Andrew Fahie, the former elected leader of the British Virgin Islands (bvi). In 2022 he was arrested in the United States. The American authorities say he promised an informant working undercover for them that he would allow illegal drugs destined for the United States to pass through his territory’s ports, in exchange for a fee. Mr Fahie, who is under house arrest in Miami, has pleaded not guilty. The skeleton of a house he had been building still stands, unfinished, outside Road Town, the capital.

The smell of rotten governance is the last thing the bvi needs. For four decades this luminous speck in the Caribbean has made a chunk of its living selling foreigners brass-plate companies—shells that exist largely on paper, without real staff or offices. That business, along with services that spin off it, has in some years funded more than two-thirds of the government’s budget and has made a territory with a mere 33,000 people famous in the business world. “It has served us very well,” says Natalio Wheatley, who succeeded Mr Fahie as premier.

For more on this story go to THE ECONOMIST

See related story:

Co-defendants abandon ex BVI premier in drug trial

By Bert Wilkinson Caribbean Life

Former British Virgin Island Premier Andrew Alturo Fahie. Department of Information and Public Relations of the government of the British Virgin Islands via AP

The two persons charged a year ago along with ex British Virgin Islands (BVI) Premier Andrew Fahie for allegedly plotting to smuggle large amounts of cocaine from the BVI to the US have copped plea bargains from federal authorities and will turn state witnesses against the former head of government.

Olean Maynard was arrested in Miami 14 months ago in Florida while reviewing a plane at an airport where she had been lured to inspect cocaine and cash as part of the alleged smuggling scheme. Fahie had been arrested hours earlier via the same route and for the same reasons. Maynard’s son, Kadeem, was nabbed at home in the BVI.

As the mid-July trial date for the case neared, the two opted to abandon Fahie and fend for themselves, agreeing to plead guilty to conspiracy to import a controlled substance, leaving the ex-head of government to face a slew of smuggling related charges. The indictment relates to an alleged conspiracy to funnel large amounts of cocaine to the US via unidentified Mexican cartels.  The Maynards are expected to collect a lighter sentence and will testify against Fahie. He has asked for a November trial start date that will allow him, in the meantime, to ferret through hours of audio tape recordings and other evidence as he prepares for his defense.

Of equal importance to Fahie is his request to the court system for the identity of the state’s confidential informant who had worked with investigators to be revealed as this is also key to defense work. “The US government has not yet disclosed the identity of the confidential source. As previously noted, Mr. Fahie contends that he needs the information in order to file certain pre-trial motions. The court, without objection from the government, previously ruled that such motions could be made any time before trial,” his Attorney Theresa Van Vliet said in court pleadings.

The trio were arrested by agents posing as Mexican cartel members offering to allegedly use the BVI as a transshipment point for cocaine to the US. The agents claimed that the ex-premier had agreed to accept $700,000 in payments as reward for his cooperation and protection, allegations he has denied. His arrest had sent shockwaves throughout the mini archipelago, the wider Caribbean and in Britain, its continuing colonizer.

Authorities quickly appointed Natalio Wheatley as his successor even as British Governor John Rankin had unveiled a commission of inquiry report into poor governance practices in the BVI, urging the cabinet to implement a series of recommendations to improve public spending, improve the checks and balances system for finance and other measures. The implementation phase is still ongoing amid criticism both from London and in the BVI that its pace is way too slow. Wheatley has since won general elections held in late April so he now has his own mandate in a multiparty coalition.

The feds say they have many hours of audio recorded conversations with Fahie and the Maynards. The Fahie team says it needs time to wade through these to determine what is on those recordings.

Opposition parties had made much of his arrests and his links to the government in the run-up to the elections, calling for the start of a new era. The electorate thought otherwise and gave Wheatley’s coalition a narrow majority.

For more on this story go to: Caribbean Life


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