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Financial Regulations and Compliance in the British Virgin Islands (BVI)
The British Virgin Islands (BVI) has implemented various regulations to ensure compliance with financial standards. This article highlights key points related to sanctions orders, electronic transactions, industry participant reviews, conjunction of unregulated and regulated products and services, and the impact of Anti-Money Laundering (AML) and Sanctions rules.
Electronic Transactions and Transfers
The BVI has introduced several laws to recognize electronically created and retained records. These include:
- Electronic Transactions Act 2021: This act provides statutory recognition for electronically created and retained records.
- Electronic Transfer of Funds Act 2021: This act requires the use of electronic signatures, which are recognized as valid subject to meeting certain criteria.
- Electronic Filing Act 2021: This act allows for the filing of documents electronically.
Review of Industry Participants by Parties Other than Regulators
Industry participants must conduct regular reviews to ensure compliance with regulations. These include:
- Auditors and Accounting Firms: Auditors and accounting firms must review VASP (Virtual Asset Service Provider) activities, reporting any insolvency, compliance issues, or significant weaknesses in internal controls.
- Service Providers: Service providers, including independent directors, legal advisers, registered agents, and authorized representatives, review their activities for alignment with contractual obligations, regulatory requirements, and industry standards.
- Industry Associations: Industry associations like BVI Finance and the Virgin Islands Virtual Assets Association promote best practices and a collaborative approach to maintain the BVI’s competitive global advantage.
Conjunction of Unregulated and Regulated Products/Services
It is possible for one entity to provide both regulated and unregulated products/services. However, in practice, this is often done through separate entities due to additional review and approval requirements for regulated services.
Impact of AML and Sanctions Rules
The BVI has implemented strict rules to combat money laundering and sanctions:
- AML Regs: The AML Regs apply to relevant persons, including virtual asset service providers, if transactions involve virtual assets valued at USD1,000 or more.
- Fintech Companies: Fintech companies providing virtual asset services must comply with the BVI’s AML/CTF regime by adopting policies and procedures for identifying money laundering risks, maintaining records, reporting suspicious activities, and appointing a money laundering officer.