Financial Crime World

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Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Practices in the British Virgin Islands

Overview

The British Virgin Islands (BVI) has made significant progress in implementing AML/CFT measures, but there are areas for improvement. International cooperation is essential for effective AML/CFT.

Financial Intelligence Unit (FIU)

  • The FIU plays a critical role in receiving and analyzing suspicious transaction reports (STRs).
  • However, the FIU’s responsiveness could be improved to enhance international cooperation.

Financial Services Commission (FSC)

  • The FSC is responsible for licensing and regulating financial institutions.
  • Most financial institutions have sufficient AML/CFT internal controls in place, but some areas require improvement.

Financial Institutions (FIs)

  • Common Areas for Improvement:
    • Corporate governance issues
    • Beneficial ownership
    • Client verification/CDD measures
    • AML/CFT internal control measures
  • Most FIs make a good level of SARs/STRs filings, but money services businesses (MSBs) and banking institutions have room for improvement in mitigating geographical risks.

Trust and Corporate Service Providers (TCSPs)

  • TCSPs are regulated under the Banks and Trust Companies Act, 1990, and related legislation.
  • High-Risk Areas for Improvement:
    • Over-reliance on third parties to obtain relevant client information
    • Ensuring accessibility of records

Insurance Business

  • Insurance business is licensable under the Insurance Act, 2008, and the Insurance Regulations, 2009.
  • Domestic businesses maintain readily available beneficial ownership (BO) information in the Territory, but some foreign insurance companies do not.

Recommendations for Improvement

The report highlights areas where the BVI’s AML/CFT measures could be improved, including:

  1. Enhancing International Cooperation: Improve responsiveness of the FIU and FSC to enhance international cooperation.
  2. Strengthening AML/CFT Internal Controls: Strengthen AML/CFT internal controls in financial institutions, particularly MSBs and banking institutions.
  3. Improving Beneficial Ownership Information: Improve beneficial ownership information, client verification, and CDD/ECDD measures for TCSPs.
  4. Addressing Corporate Governance Issues: Address corporate governance issues in FIs.

By addressing these areas of improvement, the BVI can maintain a strong reputation as a responsible international financial center.