Financial Crime World

Virgin Islands Small Banks Must Comply with AML/CFT Framework

To combat money laundering (ML), terrorist financing (TF) and proliferation financing (PF), the Virgin Islands has established a robust Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework that adheres to international standards set by the Financial Action Task Force (FATF).

The AML/CFT Framework

The Virgin Islands AML/CFT Framework is comprised of a suite of laws and regulations that give effect to the FATF Recommendations. The framework also includes several coordinating bodies, including:

  • National AML/CFT Coordinating Council (NAMLCC): leads on all AML/CFT policy matters
  • BVI Financial Services Commission (Commission): ensures compliance with the territory’s AML/CFT systems and controls through supervision of regulated financial institutions

Supervision and Guidance

The Commission monitors licensees for compliance with various requirements, including:

  • Identification and verification procedures
  • Record keeping
  • Third-party relationships
  • Reporting of suspicious activities
  • Internal control system requirements
  • Handling of Politically Exposed Persons (PEPs) and high-risk individuals

The Commission also provides guidance and performs outreach to its licensees to aid them in understanding their AML/CFT obligations.

Three-Year AML/CFT Strategy (2020-2022)

The Commission has developed a three-year AML/CFT Strategy that aims to mitigate risks and comply with international standards. The strategy sets out goals in four key areas:

  • Supervision: ensuring compliance with AML/CFT requirements
  • Enforcement: taking action against non-compliant licensees
  • Promotion of cooperation: collaborating with international partners
  • Stakeholder awareness and outreach: educating the public and regulated entities about AML/CFT obligations

Compliance for Small Banks

Small banks operating in the Virgin Islands must ensure compliance with the territory’s AML/CFT framework to prevent money laundering, terrorist financing, and proliferation financing activities that could compromise:

  • Integrity of the financial system
  • Economy
  • Citizens’ safety

By complying with the AML/CFT framework, small banks can help maintain the integrity of the financial system and protect the territory’s reputation as an International Finance Centre.