Anti-Money Laundering and Terrorist Financing (Amendment) Code of Practice, 2022

Summary

This is an amending code that makes extensive changes throughout the BVI Anti-Money Laundering and Terrorist Financing Code of Practice, Revised Edition 2020. It updates definitions (including beneficial owner, PEP, high risk countries, financial group and NPO), revises requirements for non-profit organisations, inserts new provisions covering virtual asset transfers, and replaces the schedule of administrative penalties with updated fine amounts for specific breaches.

Main areas of change

• Definitions updated: New or revised definitions inserted for terms such as control, country, financial group, money laundering, NPO, proliferation financing, terrorist financing, applicant for business, beneficial owner, high risk countries and politically exposed person (PEP).
• NPO obligations expanded: Section 4A is substituted so that non-profit organisations (NPOs) must conduct customer due diligence on donors above a stipulated threshold, adopt measures to prevent funds being diverted to terrorist or criminal use, and report suspicions of money laundering, terrorist financing or proliferation financing to the Financial Investigation Agency and act on any direction given.
• Proliferation financing added: References to money laundering and terrorist financing throughout the Code are extended to also cover proliferation financing, reflecting the Proliferation Financing (Prohibition) Act, 2021.
• Virtual assets provisions inserted: A new Part VA and section 41A are inserted dealing with virtual asset transfers, with these specific provisions delayed in commencement until 1 December 2022.
• Schedules revoked and substituted: Schedule 1 (relating to identification/verification requirements) and Schedule 4 (administrative penalties) are revoked and replaced; Schedule 2 is revoked outright.
• Administrative penalties revised: The substituted penalty schedule sets out specific fine amounts (ranging roughly from $60,000 to $100,000, and higher for repeat or corporate breaches) for failures such as inadequate customer due diligence, failure to train employees, failure to maintain transaction records, failure by correspondent banks to conduct due diligence on respondent banks, and failure to report suspicious activity.
• Numerous sections amended: Sections 2 through 56 of the principal Code, along with several explanatory notes, are amended, revoked, or substituted to update obligations relating to due diligence, reporting officers, record keeping, training, outsourcing of records, third party reliance, and correspondent banking relationships.

The Code took effect on 29 August 2022, except for the provisions specifically relating to virtual asset transfers, which came into force on 1 December 2022. Entities and professionals subject to the principal Code, including NPOs, correspondent and respondent banks, and payment service providers, must comply with the amended and inserted requirements and are subject to the revised administrative fines for non-compliance.

Key obligations

• NPOs must carry out customer due diligence and record keeping measures on donors whose donations exceed the stipulated threshold, whether made in cash or otherwise, and including anonymous donors.
• NPOs must adopt measures to ensure funds or assets received, maintained or transferred are not diverted to terrorist, criminal or proliferation financing activity.
• NPOs that suspect a donation is linked to money laundering, terrorist financing or proliferation financing must report the suspicion to the Financial Investigation Agency and act in accordance with any direction given.
• Correspondent banks must satisfy themselves regarding the customer due diligence measures undertaken by respondent banks, subject to an administrative fine for failure to do so.
• Entities and professionals must comply with the amended due diligence, enhanced due diligence, ongoing due diligence, record keeping, training, reporting officer, and third-party reliance/testing requirements set out in the amended sections of the Code, each backed by a specified administrative fine for non-compliance.
• Entities and professionals conducting virtual asset transfers must comply with the newly inserted Part VA and section 41A requirements from 1 December 2022.

Applies to

entities and professionals subject to the Anti-Money Laundering and Terrorist Financing Code of Practice, non-profit organisations (NPOs), correspondent banks and respondent banks, payment service providers/intermediary payment service providers, virtual asset service providers (in relation to virtual asset transfers), reporting officers

Deadlines

• 29th day of August, 2022: General commencement date for the Amendment Code of Practice, 2022.
• 1st day of December, 2022: Commencement date specifically for the provisions of the Code relating to virtual asset transfers.

Related documents

• This document is made under Proceeds of Criminal Conduct Act (Revised Edition 2020)