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2016.10.27 - BVI – Anti Money Laundering Regulations 2015 coming into force

 

The Anti Money Laundering (Amendment) Regulations 2015 (Statutory Instrument 2015 No.74) adopted in 2015 in the British Virgin Islands, comes into full force on December 31, 2016.

The aforesaid enactment complements the existing BVI AML regulations (adopted in years 2008, 2009, 2010, 2012).

The most significant aspect of AML Regulations 2015 is - to oblige BVI registration agents to have at their own disposal the information on beneficial owners of BVI legal entities served by them.

In practice, also before in most cases BVI agents required the information on the owners of the legal entities they serve - however to date the law formally admitted that BVI agents may rely on data kept by third parties - e.g., intermediaries / advisers directly communicating with end users of companies. Now, the regulations clearly state that the information on company owners must be in possession of the BVI agent, and reliance on third parties is no longer sufficient.

Apart of the aforesaid requirement, the new law prescribes also other changes to the AML Regulations existing before (in the new law they are named as “the Principal Regulations”).

Regulations 7A and 7B are now extended and provides more conditions regulating the relationships between BVI agents and third parties. Particularly, a third party cooperating with a BVI agent must be a professionally regulated person whose activities are based on FATF recommendations and other AML requirements. Furthermore, the regulations obliges BVI agents to perform regular tests on business relationship with third party, to examine its conformity to the requirements of the law.

A cooperation agreement with a third party must be concluded in written form and contain a clause that it continues to be in effect for a period of 5 years after the discontinuation of actual business relationships between both parties.

The term “beneficial owner” is now determined in Regulation 2 more thoroughly if compared to the preceding AML Regulations.

Furthermore, Regulation 17 lays down the procedure for imposing penalties on BVI registered agents who fails to fulfil the new Regulations. The level of the penalty is determined in accordance with the BVI Financial Services Commission Act, and may reach up to 50.000 USD.

To ensure BVI agents had adequate time to correspond with all the aforesaid clauses, AML Regulations 2015 provide a transitional period, which ends on December 31, 2016. Before that date BVI agents must comply with the new Regulations, particularly they must have in their own possession the information on the owners of all companies served by them.

Comments by INTERNATIONAL OVERSEAS SERVICES:

By the end of the transitional period, BVI agents are forming their databases containing data on the owners of the companies they serve. In practice, BVI agents with a little number of clients may choose to keep this information in paper form, while some agents serving a larger number of legal entities have created electronic portals technologically suitable for keeping the information as required.

With introducing of BVI Anti Money Laundering Regulations 2015, the jurisdiction of BVI confirms its status as one of the leading jurisdictions in regard of Due Diligence and Anti Money Laundering legislation.

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