Financial Crime World

Money Laundering, Terrorism Financing, and Fraud Laws in the British Virgin Islands

The British Virgin Islands (BVI) has implemented stringent laws and regulations to combat money laundering, terrorism financing, and fraud. This guide provides a comprehensive overview of the key points related to these laws.

Predicate Offences

Predicate offences are crimes that can be used as evidence of money laundering or terrorism financing. The BVI has adopted an “all crimes” approach to predicate offences under its anti-money laundering (AML) and terrorist financing regime.

Key Points:

  • Predicate offences include a wide range of crimes, such as murder, robbery, and embezzlement.
  • The BVI government encourages reporting of suspicious transactions to the Financial Investigation Agency (FIA).

De Minimis Rules

There are no de minimis rules for money laundering, terrorism financing, and fraud offences in the BVI.

Key Points:

  • No minimum threshold is set for these crimes, meaning that even small amounts can be considered a crime.
  • Individuals and businesses must remain vigilant and report suspicious transactions to the FIA.

Penalties and Plea Agreements

Penalties for money laundering and terrorism financing can include up to 14 years’ imprisonment and a fine of up to $500,000. Convictions for fraud under the Criminal Code can result in up to 10 years’ imprisonment. Plea agreements are available and can be entered into with the consent of the director of public prosecution.

Key Points:

  • Penalties for money laundering and terrorism financing are severe and can have a significant impact on individuals and businesses.
  • Plea agreements can provide a reduced sentence or fine in exchange for cooperation with law enforcement.

Defences

Defences may arise if a party:

  • Disclosed an act to the Financial Investigation Agency (FIA) before performing it, and performed the act with their consent and in aid of a law enforcement function.
  • Acquired, transferred, used, or possessed property for adequate consideration.
  • Reported a suspicious transaction to the FIA.

Key Points:

  • Disclosure and cooperation with law enforcement can be a defence to money laundering and terrorism financing charges.
  • Adequate consideration for a transaction can also be a defence.

Record Keeping, Disclosure, and Compliance

Relevant persons must maintain records of:

  • All transactions carried out by or on behalf of a person.
  • All reports made to the FIA.
  • All inquiries relating to money laundering received from the FIA.

Companies are advised to establish internal systems and controls, effect customer due diligence measures, practice good record keeping, and provide employee training.

Key Points:

  • Record keeping is essential for compliance with AML regulations.
  • Companies must have robust internal controls in place to prevent money laundering and terrorism financing.

Private Enforcement

Private actions can be brought in the BVI courts for damages arising from money laundering, terrorism financing, or fraud. Damages are calculated to put the aggrieved party in the position they would have been in had the breach not occurred. Other remedies may include an injunction, an account of profit, a rescission, or a rectification.

Key Points:

  • Private enforcement can provide a significant deterrent to individuals and businesses engaging in money laundering and terrorism financing.
  • Remedies available through private enforcement can be substantial and provide compensation for aggrieved parties.