VISTA, SISTA, & traditional trusts: 'O le fogava’a e tasi

Abstract

When the Panama papers were released, the British Virgin Islands (“BVI”) and Samoa were implicated as the first and sixth most popular tax havens for companies. The BVI are a self-governing overseas territory of the United Kingdom located in the Caribbean. The BVI are home to about 35,000 people and a lucrative offshore finance centre. Offshore financial services generate more than half of the total of Government revenues.¹

Over 12,000 kilometres away from the BVI are the Samoan islands, an independent nation in the South Pacific Ocean. Samoa is home to about 200,000 people and a modest offshore finance centre.

The BVI and Samoa have many similarities, besides being popular tax havens. Both islands nations follow the Westminster system of Parliament, both recognise English common law and equity as a source of law and both have enacted legislation creating special investment control trusts. In 2003, the BVI enacted the Virgin Islands Special Trusts Act (“VISTA”) creating investment control trusts, commonly known as VISTA trusts. This special type of trust was unique to the BVI until Samoa enacted the Trusts Act in 2014, creating the Samoan International Special Trust Arrangement (“SISTA”) which is similar to VISTA.

The aim of this research paper is to analyse the investment control trust arrangements in the BVI and Samoa and to determine whether these statutory creations fall under the scope of the traditional English trust.

Part II of this paper focuses on investment control trusts in the BVI. This section will discuss the development of the VISTA as well as its key provisions. Part III of this paper will focus on Samoa. It briefly discusses the Samoan Offshore Finance Centre and its relation to SISTA trusts. Part IV of the paper focuses on special trusts in practice. The advantages and criticisms of these investment control trusts are also discussed. Part V will first, briefly discuss some basic trust principles before addressing the crux of this research: are the special investment control trusts still trusts? This paper concludes by arguing that these special investment control trusts, if carefully and well drafted, retain the irreducible core of trusteeship and therefore, should fall within the scope of ‘traditional’ English trusts.

¹ Government of the Virgin Islands “Our Economy – Financial Services” <http://www.bvi.gov.vg/content/our-economy>.