British Virgin Islands Takes Proactive Approach to Financial Crime Risk Management
The British Virgin Islands (BVI) government has recently announced plans to implement new legislation aimed at mitigating financial crime risk in the territory. This significant move towards strengthening its financial regulations demonstrates the BVI’s commitment to maintaining a robust and secure financial system, aligning with international standards and best practices.
Incorporating FATF Standards on Virtual Assets
The Financial Action Task Force’s (FATF) standards on virtual assets and virtual asset service providers will be incorporated into BVI law. This marks a significant step towards international best practices and ensures that the BVI remains at the forefront of regulatory compliance in the financial sector.
Key Provisions of the New Legislation
- Registration with the Financial Services Commission (FSC): Virtual Asset Service Providers (VASPs) will be required to register with the FSC, ensuring they are subject to robust regulations and oversight.
- AML/CFT/CPF Compliance: AML/CFT/CPF compliance is mandatory for VASPs from December 1, 2022, with registration with the FSC expected within six months of the new VASP law coming into force.
- Anti-Money Laundering Regulations (AMLR): The AMLR will dictate that a VASP carrying out or providing virtual asset services must be compliant when a transaction involves virtual assets valued at $1,000 or more.
Mitigating Financial Crime Risk
The compliance obligations in the AMLR and the Anti-Money Laundering and Terrorist Financing Code of Practice (Code) are designed to mitigate financial crime risk, including:
- Money laundering
- Sanctions breaches
- Terrorist financing
- Proliferation financing
These obligations include having a Money Laundering Reporting Officer, establishing policies and procedures for identifying and mitigating financial crime risk, and implementing effective systems for customer identification, verification, and record-keeping.
Implementation Timeline
The new VASP Act is expected to be brought into force shortly after the AMLR comes into effect, with transitional relief provided for six months for VASPs to register with the FSC without having to stop their business. Although the exact go-live date of the new VASP Act has not been published, it is anticipated to be in December or the first quarter of 2023.
The BVI’s proactive approach towards financial crime risk management demonstrates its commitment to maintaining a robust and secure financial system, aligning with international standards and best practices. As the global landscape continues to evolve, jurisdictions must stay vigilant and adapt their regulations to address emerging risks and threats.