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Compliance Procedures for Financial Institutions in British Virgin Islands: Key Updates and Guidance

The British Virgin Islands (BVI) has recently issued several pieces of guidance and legislation aimed at meeting international regulatory requirements. These updates will significantly impact financial institutions operating within the jurisdiction, requiring compliance with new regulations.

New Regulations and Updates

Financial Services (Prudential and Statistical Returns) (Amendment) Order 2021

• Requires licensees to submit Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) returns for each annual reporting period.
• Deadline for submission: February 15, 2021.

Data Protection Act 2021

• Effective July 9, 2021, this act will require updates to:
  • Fund documents
  • Compliance manuals
  • Employment contracts
  • Commercial agreements
• Includes provisions for data protection and security.

Regulatory (Insurance Code of Conduct) Code 2021

• Introduces new standards for insurance companies operating in the BVI, including:
  • Enhanced transparency requirements
  • Stricter risk management practices

Financial Investigation Agency (Amendment Act) 2021

• The FIA has been granted expanded powers to combat money laundering, terrorism financing, and proliferation financing.
• Non-designated financial services businesses and professions are now fully within its scope.

Virtual Asset Service Providers Legislation (VASPA)

• Expected to be introduced in the first quarter of 2022, VASPA will regulate activities related to digital assets.
• Brings virtual asset service providers operating in or from the BVI under its remit.

Governor’s Office Guidance on BVI Financial Sanctions

• Requires regulated entities to consider and comply with BVI financial sanctions.

Amendments to Existing Laws

• Beneficial Ownership Secure Search System Act, 2017 (BOSS Act)
  • Now includes limited partnerships without legal personality in its scope.
• Economic Substance (Companies and Limited Partnerships) Act, 2018
  • “Investment fund business” is exempt from economic substance requirements.

Simplifying Compliance for Financial Institutions

Harneys offers a range of services to simplify compliance for financial institutions, including:

• Reviewing and updating fund documents to include data protection provisions
• Updating compliance manuals to reflect changes to the BVI sanctions regime and data protection laws
• Advising on economic substance reporting obligations and assisting with BVI substance via Harneys Fiduciary
• Providing AEOI policies and procedures
• Offering annual compliance training
• Assisting with annual filings and advising on sanctions

Contact Us

For more information or assistance, please contact:

• Ayana Hull
• Joshua Mangeot
• Kimberly Seagojo
• Your usual Harneys contact.