Financial Crime World

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Compliance Risk Management in BVI Banks Gets a Boost

The British Virgin Islands (BVI) has taken a significant step forward in ensuring compliance risk management in its banking sector. The Financial Services Commission Act 2001, the country’s primary legislation governing financial services licensees, has been amended to allow corporate entities to provide compliance function services.

Historic Change in Approach

Traditionally, only individuals could be approved as compliance officers for financial services licensees in BVI. However, this approach was seen as outdated and restrictive. The recent amendments to the FSC Act have introduced a more modern and streamlined process, enabling corporate bodies to take on compliance duties.

Streamlined Approval Process

Under the new regime, the Financial Services Commission (FSC) will approve a body corporate to provide compliance function services after receiving a written application. No licensee is permitted to engage the services of an unapproved corporate entity, unless they have identified a senior officer who will oversee the compliance function and received prior approval from the FSC.

Key Requirements for Approval

To be approved, a corporate entity must meet specific criteria, including:

  • Incorporation under BVI Business Companies Act 2004: The company must be incorporated in accordance with the BVI Business Companies Act 2004.
  • Physical presence in the BVI: The company must have a physical presence in the BVI and not operate remotely.
  • Employee residency requirements: Employees of the company must be physically resident in the BVI, with no more than 90 days absence from the island.
  • Undertaking to deploy approved employees for compliance duties: The company must provide a written undertaking to only deploy approved employees for compliance duties.
  • Primary responsibility for providing compliance services: The company must demonstrate primary responsibility for providing compliance services to licensees based in the BVI.
  • Sufficient employees within 180 days: The company must have sufficient employees within 180 days to perform compliance officer duties, taking into account the number, nature, size, and complexity of the licensees.

Expert Guidance

Harneys, a leading law firm in the BVI, is well-equipped to assist corporate entities with their obligations under financial services legislation. Their team can prepare applications for approval, as well as provide necessary business plans to meet the requirements outlined above.

Get Ready to Comply

The introduction of this new regime marks a significant shift in compliance risk management in BVI banks. With expert guidance and support available, corporate entities are now better equipped to navigate the complexities of this legislation and ensure they remain compliant with regulatory requirements.