Beneficial Ownership Obligations Under the AML Regime

Summary

This is guidance jointly issued by the BVI Financial Services Commission (FSC) and the Financial Investigation Agency (FIA) explaining how licensees under the AML/CFT/CPF regime must determine, identify, verify and maintain information on the beneficial owners (BOs) of applicants for business and customers. It does not create new law but interprets and consolidates existing obligations under the AML Regulations, the AMLTFCOP, the Regulatory Code, the FIA Act and the FSC Act.

• Who must comply: Licensees supervised by the FSC (financial institutions such as banks, trust companies, insurers, company managers, investment/fund businesses, TCSPs, money services and financing businesses, VASPs) and by the FIA (DNFBPs such as legal practitioners, notaries, accountants, real estate agents, precious metals/stones dealers, high value goods dealers, vehicle and boat dealers, and gaming/betting businesses meeting stated thresholds).
• Determining BOs: Guidance sets out how to identify beneficial owners of companies (limited by shares, guarantee, unlimited), partnerships, segregated portfolio companies, and legal arrangements involving trusts, using direct and indirect ownership/control tests (generally a 10% threshold or exercise of control).
• Identification and verification: Licensees must identify and verify the BOs of every applicant for business and customer, including when and how this should occur for both legal persons and legal arrangements such as trusts.
• Record keeping: Licensees must maintain adequate, accurate and up to date BO information and documents, and ensure this information is accessible and can be provided promptly to the FSC, FIA or other competent authorities and law enforcement on request.
• Reliance on introducers/third parties: Guidance addresses conditions under which licensees may rely on introducers or third parties for BO due diligence while remaining responsible for compliance.
• Red flags and reporting: Licensees must assess indicators of concealed beneficial ownership (e.g. complex structures, bearer shares, nominee arrangements, uncooperative customers) and determine whether a suspicious activity report should be filed.
• Penalties: Failure to comply with BO collection and maintenance obligations may result in administrative penalties under Schedule 4 of the AMLTFCOP, fines under the FSC Act, and/or imprisonment under the Proceeds of Criminal Conduct Act.

The guidelines are explicitly stated not to constitute legal advice, and licensees are cautioned not to rely on them exclusively to determine their obligations under the AML/CFT/CPF regime.

Key obligations

• Licensees must identify and verify each applicant for business and customer, including their underlying beneficial owners.
• Licensees must determine beneficial owners of companies, partnerships, segregated portfolio companies and trust-related legal arrangements using the ownership/control criteria set out in the guidance.
• Licensees must maintain adequate, accurate and up to date beneficial ownership information and supporting documents.
• Licensees must ensure BO information and documents are accessible and can be provided promptly to the FSC, FIA or other competent authorities and law enforcement agencies upon request.
• Licensees relying on introducers or third parties for BO due diligence remain responsible for ensuring compliance with BO identification and verification requirements.
• Licensees must assess red flag indicators of concealed beneficial ownership and determine whether a suspicious activity report should be filed.
• Licensees must remain diligent and maintain a compliance framework that allows continual improvement of AML/CFT/CPF measures relating to beneficial ownership.

Applies to

banking business, trust business, insurance business and insurance intermediaries, company management businesses, investment business, mutual funds and private investment funds, trust and company service providers (TCSPs), money service businesses, financing businesses, virtual asset service providers (VASPs), legal practitioners, notaries public, accountants, real estate agents, dealers in precious metals and stones (DPMS), high value goods dealers, vehicle dealers, boat dealers, gaming and betting businesses