Financial Crime World

DUE DILIGENCE ESSENTIAL FOR FINANCIAL TRANSACTIONS IN THE BRITISH VIRGIN ISLANDS

REGISTRATION AND SUPERVISION

The British Virgin Islands (BVI) has implemented strict regulations to combat money laundering and terrorist financing. As part of the government’s efforts to maintain transparency and accountability, Non-Profit Organisations (NPOs) operating within the Territory must conduct thorough due diligence on their financial transactions.

  • All NPOs are required to register with the Non-Profit Organisation Registration Board (NPO Board) under Section 11(1) of the NPO Act.
  • The registration process and guidelines can be obtained from the Ministry of Health and Social Development in Road Town, Tortola.
  • NPOs must also contact the Financial Investigation Agency (FIA) to inform them of their operations, as mandated by Section 18(1) of the NPO Act.

DESIGNATED PERSON RESPONSIBILITY

In line with the Anti-Money Laundering Code (AML Code), all NPOs are required to appoint a Designated Person who will be responsible for carrying out suspicious activity reporting. The Agency has provided guidance in this regard through a Public Notice, emphasizing the importance of appointing a Designated Person and informing the Agency of their identity.

  • The Designated Person is responsible for:
    • Carrying out suspicious activity reporting
    • Refusing donations that may be linked to money laundering or terrorist financing

SUSPICIOUS TRANSACTIONS REPORTING

Under Section 4A(6) of the AML Code, NPOs are obligated to report any suspicious transactions or activities to the Agency. This includes internal reports filed with the Designated Person, who may then forward them to the Agency.

  • NPOs must establish internal control systems as outlined in Section 4A of the AML Code.
  • These requirements should be contained within a Compliance Manual, which can be obtained from the FIA.

INTERNAL CONTROLS AND TRAINING

To prevent money laundering and counter terrorism financing, NPOs must:

  • Maintain proper records
  • Conduct customer/donor due diligence measures
  • Provide AML/CFT training for employees and/or volunteers

DUE DILIGENCE OBLIGATIONS

NPOs are required to undertake due diligence in their dealings with applicants for business. This includes:

  • Identifying the source of donations
  • Conducting background checks on donors and recipients
  • Reporting suspicious transactions or activities

Enhanced due diligence may be warranted in cases where there is a higher risk of money laundering or terrorist financing, such as dealing with politically exposed persons or individuals from high-risk jurisdictions.

STAFF TRAINING AND RECORDS MAINTENANCE

Under Section 47-49 of the AML Code, all members/volunteers are required to receive annual training in anti-money laundering and countering the financing of terrorism. NPOs must also maintain records as outlined in Schedule 4 of the AML Code, with a minimum retention period for retaining such records.

By adhering to these regulations, NPOs can ensure that they remain compliant with both regional and international standards, maintaining transparency and accountability within the Territory.