Financial Crime World

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British Indian Ocean Territory’s Financial Regulatory Bodies Clamp Down on Anti-Money Laundering Measures

In a bid to strengthen its anti-money laundering (AML) regime, the British Indian Ocean Territory has implemented sweeping changes to its financial regulations. The moves are designed to bring the territory in line with international standards set by the Financial Action Task Force (FATF).

New High-Risk Factors Require Enhanced Due Diligence

As of January 10, 2020, firms operating in the British Indian Ocean Territory must now include new high-risk factors when assessing the need for enhanced due diligence. These may include:

  • Transactions involving parties based in high-risk third countries
  • Customers seeking residence rights or citizenship in exchange for capital transfers
  • Non-face-to-face business relationships without certain safeguards

E-Money Thresholds for Customer Due Diligence

The amendments to regulation 38 regarding electronic money mean that firms can only forego customer due diligence measures in situations where:

  • The maximum amount stored electronically is €150
  • The payment instrument is not reloadable or has a monthly limit of €150
  • It is used exclusively to purchase goods or services

Customer Due Diligence Requirements

Firms must now update their records relating to the beneficial ownership of corporate clients and understand the ownership and control structure of their corporate customers. They must also:

  • Record any difficulties encountered in identifying beneficial ownership

Reporting Discrepancies to Companies House

Regulation 30A requires firms to report discrepancies between the information they hold on their customers and that held in the Companies House Register to the authorities.

Duty to Respond to Requests for Information about Accounts and Safe-Deposit Boxes

New Part 5A of the regulations imposes duties on credit institutions and safe custody services providers to respond to requests for information about accounts and safe-deposit boxes, including details related to:

  • The holder(s) or beneficial owner(s)

Compliance Under MLRs

Firms are expected to comply with the new regulations from January 10, 2020. The authorities will take into account evidence that firms have taken sufficient steps before that date to comply with these new obligations.

Cryptoassets Activities Subject to AML/CTF Regime

Businesses carrying out certain cryptoasset activities must:

  • Register with the authorities
  • Comply with the MLRs in relation to those activities from January 10, 2020

References

  1. Financial Action Task Force (FATF) - https://www.fatf-gafi.org

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