Group Compliance: A Critical Component in Virgin Islands’ Anti-Money Laundering Efforts

The Financial Services Commission (FSC), a key regulatory body in the Virgin Islands, emphasizes the importance of group compliance in its anti-money laundering (AML) efforts. Relevant persons within a group are expected to implement robust customer due diligence and record-keeping programs that meet or exceed international standards.

Group Definition

For the purposes of these regulations, a “group” refers to a body corporate and its subsidiaries, including any holding company and subsidiary thereof. This definition is in accordance with Section 2 (2) to (6) of the Banks and Trust Companies Act.

Ultimate Responsibility

While the group may have internal procedures in place for ensuring compliance, the relevant person has the ultimate responsibility for verifying the identity of applicants for business and knowing the beneficial owner of such applicants.

Third-Party Business Relationship Agreements

To ensure effective implementation of AML measures, relevant persons are required to enter into written agreements with third parties before establishing a business relationship. These agreements must comply with regulations 7 (1) and (2) and the conditions stipulated in the Code.

Obligation to Test Business Relationships

Relevant persons are also obligated to test their business relationships with third parties through periodic reviews of customer due diligence measures. This review must satisfy itself that the requirements of regulation 7 (1) are being met and that the terms and conditions of the written agreement are being adhered to.

Record-Keeping Requirements

In accordance with regulations 8, 9, and 10, relevant persons are required to maintain records of verification of identity, transactions, and reports. These records must be established and maintained in the Virgin Islands for a minimum period of five years from the date of completion of transactions or termination of the business relationship.

Limitation Period for Retention of Records

The limitation period for retention of records is subject to certain exceptions. For instance, where a report has been made to the Anti-Money Laundering Reporting Officer or an investigation is ongoing, relevant persons are required to retain all relevant records until the investigation is complete.

Format and Retrieval of Records

Relevant persons must ensure that their records are capable of retrieval without undue delay and in accordance with the Code. In some cases, reliance may be placed on third-party records, provided that the third party is willing and able to produce copies of the required records.

Maintaining Register of Money Laundering Reports and Inquiries

Relevant persons must maintain a register of all reports made to the Agency and inquiries relating to money laundering. This register will serve as an important tool for tracking AML-related activities and ensuring compliance with regulations.

By implementing these measures, relevant persons within the group can help ensure that their businesses are compliant with AML regulations and contribute to the overall effectiveness of the Virgin Islands’ anti-money laundering framework.