Financial Crime World

Revised Anti-Money Laundering (AML) Regulations in British Virgin Islands

The British Virgin Islands (BVI) has updated its Anti-Money Laundering (AML) regulations, specifically the AML Code, to provide clarity and flexibility for entities operating in the BVI. The revised Code aims to strike a balance between compliance with international standards and reducing regulatory burdens on businesses.

Key Changes to the AML Code

The key points of the revised AML Code are:

Outsourcing AML Functions

  • Entities can outsource certain AML functions to professionals or other entities, but must ensure that a written agreement is in place outlining how AML compliance will be achieved.
  • This change allows businesses to focus on core activities while ensuring compliance with AML laws.

Relaxed Requirements for Non-Face-to-Face Business

  • Enhanced customer due diligence is no longer required for non-face-to-face business if the entity assesses the applicant to be low-risk or if identity is verified through electronic means.
  • This change reduces regulatory burdens on businesses that conduct online transactions.

Wire Transfer Test

  • Wire transfer information can be used to verify the identity of low-risk applicants, provided the subscription or redemption payment is made from a regulated financial institution in a recognized jurisdiction.
  • This change provides an additional option for verifying applicant identities.

Certified Documentation

  • Certification is only required for documents that may not be authentic or are doubtful, rather than all copies presented by an applicant or customer.
  • This change simplifies the certification process and reduces regulatory burdens.

Recognized Jurisdictions

  • A list of recognized jurisdictions has been established, which includes major onshore and well-regulated offshore jurisdictions.
  • Business relationships from listed jurisdictions will attract reduced customer due diligence measures.
  • This change provides clarity and consistency in applying customer due diligence requirements.

Independent Audit

  • Regulated entities must establish and maintain an independent audit function to test compliance with their internal controls and the AML Code.
  • This change ensures that businesses have a robust system in place for monitoring and reporting on AML compliance.

Conclusion

The revised AML Code provides flexibility for BVI mutual funds, fund managers, and administrators, as well as private investment funds, while ensuring compliance with international standards. The Code is subject to review on a regular basis, and its full text is available on the FSC’s website.