The British Virgin Islands has taken significant steps to combat money laundering and terrorist financing, and to improve financial transparency in international money movement. The National AML/CFT Coordinating Council (NAMLCC) is the key agency responsible for implementing these measures.
The BVI has implemented robust anti-money laundering (AML) and counter-terrorist financing (CTF) legislation, in line with international standards. This includes the Proceeds of Crime Act and the Anti-Money Laundering Regulations, which provide guidelines for reporting suspicious activity. The BVI has also introduced the Beneficial Ownership Secure Search System Act (BOSS), which mandates companies to disclose their beneficial owners to authorities.
The BVI works closely with international organizations like the Financial Action Task Force (FATF), the Caribbean Financial Action Task Force (CFATF), and the European Union to ensure that its regulatory framework is compliant with global AML standards. The BVI is regularly reviewed for compliance and updates its laws to meet international requirements.
The BVI has made efforts to strengthen the regulation of its offshore financial services sector, which includes the incorporation of companies and trusts. They have introduced measures for more transparency, particularly regarding beneficial ownership, aimed at preventing anonymous entities from facilitating money laundering or tax evasion.
The BVI has also signed up for international information exchange agreements, such as the OECD’s Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) with the United States.
While the BVI has faced criticism for not having a public register of beneficial ownership, it has adopted a system of secure information sharing with law enforcement agencies. The BOSS system allows the BVI to provide information on beneficial owners to law enforcement agencies, but the information is not available to the general public.
The financial institutions in BVI are required to implement enhanced customer due diligence (CDD) processes. They must assess and report suspicious transactions, and maintain thorough records on customers, especially those considered high-risk.
Firms and individuals that do not comply with the BVI’s AML regulations face significant penalties. The authorities have increased the enforcement of fines and penalties for non-compliance, ensuring that businesses operating in the territory take their obligations seriously.
The BVI government and regulatory bodies provide ongoing training and awareness programs to financial institutions and other entities to ensure they understand and comply with AML/CTF requirements.
These measures are part of the BVI’s commitment to maintaining its reputation as a well-regulated financial jurisdiction while balancing its position as a popular offshore financial center. However, there is continued pressure on the BVI to adopt even more stringent transparency measures, including a fully public beneficial ownership register, to further combat illicit financial activities.
In 2021, NAMLCC introduced the Virgin Islands’ inaugural National AML/CFT Policy and a three-year Strategy, aimed at mitigating ML and TF risks. These foundational documents were designed to address the ML/TF risks outlined in the Virgin Islands’ 2016 National Risk Assessment (NRA) and ensure compliance with international standards.
As a result of these findings, NAMLCC approved an updated National AML/CFT/CPF Policy and accompanying Strategy for 2024-2026 in June 2024. These updates are in line with FATF Recommendation 2, which requires that AML/CFT policies be informed by regularly reviewed risk assessments. The updated documents will provide a clear and focused approach to mitigating the distinct risks associated with ML, TF, and PF.
Speaking on the importance of this initiative, Premier Dr. Natalio Wheatley, Chairman of NAMLCC, stated: "As we continue to face the ever-evolving threats of money laundering, terrorist financing, and proliferation financing, it is essential that the Virgin Islands remains agile and proactive in our response. The revised Policy and Strategy are critical steps forward in safeguarding the Virgin Islands’ financial system and ensuring compliance with international standards. We are committed to working closely with all stakeholders to implement these strategies effectively, and to ensure that the Virgin Islands remains a safe and secure jurisdiction for legitimate business."
Conclusion
The British Virgin Islands has made significant progress in combating money laundering and terrorist financing, and in improving financial transparency in international money movement. The National AML/CFT Coordinating Council has played a crucial role in implementing these measures, and the updated National AML/CFT/CPF Policy and Strategy for 2024-2026 will provide a clear and focused approach to mitigating the distinct risks associated with ML, TF, and PF.
FAQs
Q: What are the key measures taken by the BVI to combat money laundering and terrorist financing?
A: The BVI has implemented robust anti-money laundering (AML) and counter-terrorist financing (CTF) legislation, strengthened the regulation of its offshore financial services sector, and introduced measures for more transparency, particularly regarding beneficial ownership.
Q: What is the role of the National AML/CFT Coordinating Council (NAMLCC) in combating money laundering and terrorist financing?
A: NAMLCC is the key agency responsible for implementing measures to combat money laundering and terrorist financing, and for ensuring compliance with international standards.
Q: What are the penalties for non-compliance with the BVI’s AML regulations?
A: Firms and individuals that do not comply with the BVI’s AML regulations face significant penalties, including fines and penalties for non-compliance.
Q: What is the status of the BVI’s public register of beneficial ownership?
A: The BVI has adopted a system of secure information sharing with law enforcement agencies, but the information is not available to the general public.
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