Financial Crime World

Financial Crime Prevention Strategies in the British Virgin Islands

As the global financial landscape continues to evolve, jurisdictions around the world are implementing robust measures to prevent financial crime and maintain transparency. The British Virgin Islands (BVI) is no exception, with new legislation set to come into force aimed at regulating virtual assets and preventing money laundering.

AML/CFT/CPF Compliance

From December 1, 2022, all Virtual Asset Service Providers (VASPs) operating in the BVI will be required to comply with the Anti-Money Laundering Regulations (AMLR) and related Anti-Money Laundering and Terrorist Financing Code of Practice. This includes having effective systems and controls in place to mitigate the risk of financial crime, such as:

Compliance Obligations

  • Appoint a Money Laundering Reporting Officer: Identify a person responsible for reporting suspicious transactions.
  • Establish policies and procedures for identifying and mitigating financial crime risk: Develop guidelines for monitoring and reporting suspicious activities.
  • Verify the identity of customers and prospective customers: Ensure proper identification and due diligence on all clients.
  • Risk rating products and services, customers, and delivery channels: Assess the potential risk associated with each product or service.
  • Implement effective sanctions screening and record-keeping practices: Monitor transactions against sanctions lists and maintain accurate records.
  • Provide staff training and testing: Educate employees on AML/CFT/CPF policies and procedures.
  • Establish a system for suspicious activity and transaction monitoring and reporting: Identify and report suspicious activities in a timely manner.

Registration with the Financial Services Commission

In the second phase, the BVI will establish a registration regime for VASPs under the Virtual Asset Service Providers Act. This is expected to come into force in December 2022 or early 2023. During this period, VASPs will be required to register with the Financial Services Commission (FSC) within six months of the new law coming into effect.

Transitional relief will be provided for VASPs to make their application to the FSC without having to stop their business, although full compliance with the AMLR and Code is mandatory during this time.

Conclusion

The BVI’s move to regulate virtual assets and prevent financial crime demonstrates its commitment to maintaining a transparent and secure financial environment. As the global landscape continues to evolve, it is essential for businesses operating in the BVI to understand their obligations under the new legislation and ensure compliance with the AMLR and VASP Act.

Specialist advice should be sought about specific circumstances, as the content of this article is intended to provide a general guide only.