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BREAKING: FSC Issues Notice to Financial Institutions, Settlor, and Trustees Amid Growing Concerns Over AML/ CFT Deficiencies

ROAD TOWN, Tortola - The British Virgin Islands Financial Services Commission (FSC) has issued a notice to all financial institutions, settlors, and trustees operating in the jurisdiction, demanding immediate action to address glaring deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CFT) controls.

Ramping up Efforts to Combat Money Laundering and Terrorist Financing

The move comes as the FSC ramps up efforts to combat money laundering and terrorist financing in the Territory. The notice highlights several key areas of concern, including:

  • Inadequate risk assessments
  • Insufficient customer due diligence
  • Failure to file timely and accurate statistical returns

Immediate Action Required

According to the notice, all financial institutions are expected to conduct a thorough review and adjustment of their policies, procedures, and internal controls within 24 hours. This includes:

  • Ensuring staff are properly trained on AML/CFT measures
  • Taking necessary measures to freeze any known assets

Implementing Institutional Risk Assessment Frameworks

The FSC has also emphasized the importance of implementing institutional risk assessment frameworks and maintaining internal controls that enable the identification and mitigation of ML/TF risks.

“We expect all regulated entities to take immediate action to address these deficiencies,” said a spokesperson for the FSC. “We will be closely monitoring their compliance with our regulations, and any failures to do so will be met with swift and decisive action.”

Specific Areas of Concern

The notice specifically highlights several areas of concern, including:

  • Banking: Ensure SARs are filed in a timely manner, and that institutions do not have AML deficiencies identified in compliance inspections.
  • Financing Services: Demonstrate understanding of client verification procedures, ensure timely submission of statistical returns, and train staff on identifying and reporting suspicious activities.
  • Money Services: Properly verify BO information on all transactions, ensure timely submission of statistical returns, and address deficiencies identified in compliance inspections.
  • TCSPs: Ensure timely submission of statistical returns, train staff to identify and report suspicious activities, and ensure third-party introducers understand their AML/CFT obligations.
  • Investment Business: Ensure entities operating outside the jurisdiction understand their AML/CFT obligations, including filing SARs. Authorised Representatives should take a more active role in ensuring entities are aware of all obligations.

Ongoing Efforts to Strengthen the Territory’s AML/CFT Framework

The FSC’s notice comes as part of its ongoing efforts to strengthen the Territory’s AML/CFT framework and protect the financial system from illicit activities.

“We remain committed to working closely with our regulated entities to ensure that they are equipped to effectively manage ML/TF risks,” said the FSC spokesperson. “We will continue to take a proactive approach in addressing these issues and protecting the integrity of our financial system.”