Financial Crime World

Comprehensive Framework Against Money Laundering, Terrorism Financing, and Fraud in the British Virgin Islands

The British Virgin Islands (BVI) has established a robust framework to combat money laundering, terrorism financing, and fraud. This comprehensive approach involves defining these offenses, imposing penalties and plea agreements, and providing defenses for relevant parties.

Defining Money Laundering and Associated Offenses

  • Money Laundering: Defined by reference to various offenses under the Proceeds of Criminal Conduct Act 1997 and the Drug Trafficking Offences Act 1992.
  • Terrorism Financing: Considered a serious offense involving providing or collecting funds for terrorist activities, although it is not expressly defined in the BVI.

Penalties and Plea Agreements

  • A person committing an offense under the Proceeds of Criminal Conduct Act 1997 or the Drug Trafficking Offences Act 1992 is liable for:
    • Up to 14 years’ imprisonment
    • A fine of up to $500,000
    • Both on conviction on indictment

Defenses and Record Keeping Requirements

  • Defenses: A party may have a defense if it disclosed the act concerned to the Financial Investigation Agency (FIA) before performing it and performed the act with the FIA’s consent and in aid of a law enforcement function.
  • Record Keeping and Disclosure Requirements:
    • Relevant persons are required to verify a person’s identity
    • Maintain records indicating the nature of the evidence obtained, comprising a copy of the evidence, or containing such information as would enable a copy of the evidence to be obtained

Compliance Measures for Companies

  • Establish internal systems and controls
  • Effect customer due diligence measures
  • Practice good record keeping
  • Provide employee training

Private Actions Against Money Laundering and Associated Offenses

  • Any private person with standing can file an action based on a cause of action for damages in the BVI courts.
  • Damages are calculated to put the aggrieved party in the position that it would have been in had the breach not occurred.
  • Other equitable remedies may be awarded to successful claimants, including:
    • An injunction
    • An account of profit
    • Rescission
    • Rectification

Conclusion

The BVI has a robust framework for combating money laundering, terrorism financing, and fraud, with penalties and plea agreements in place to deter such activities.