Guidance Notes on the Prevention of Money Laundering (BVI)

Summary

These Guidance Notes, issued by the Joint Anti-Money Laundering Coordinating Committee (JAMLACC), set out the British Virgin Islands anti-money laundering regime as it applies to financial institutions under the Proceeds of Criminal Conduct Act. They are described as not strictly mandatory, but the Financial Services Department (now the FSC) uses them as the benchmark for assessing whether a licensed service provider's systems and controls are adequate, and courts may consider compliance with them when assessing liability under the Act.

• Duty of vigilance: Institutions must maintain systems covering verification (know your customer), recognition of suspicious transactions, reporting of suspicion, record keeping, and staff training.
• Officers: All financial institutions should appoint a Reporting Officer as point of contact with the Reporting Authority, and may appoint a Prevention Officer to manage day-to-day vigilance systems.
• Manuals: Institutions should produce an instruction manual on entry, verification and records, and provide it to key staff as part of training.
• Group policy: BVI-headquartered groups should ensure overseas branches/subsidiaries observe these Guidance Notes or equivalent local standards, stay informed of group policy, and know their local reporting equivalents.
• Sector-specific guidance: Part III adds detailed guidance for banking, investment business, fiduciary business, insurance, and recognized foreign regulated institutions, to be read alongside the general Part II requirements.
• Suspicious activity reporting: Institutions and staff who report suspicions to the Reporting Authority are protected from being sued for breach of confidentiality under the Proceeds of Criminal Conduct Act.

The document also defines key terms (business relationship, one-off transaction, significant one-off transaction over 10,000 dollars, entry, termination, etc.) and includes appendices with model forms for verification requests, suspicious transaction examples, internal reporting, and disclosure to the Reporting Authority. It applies broadly across the BVI financial sector, both regulated and, in terms of the culture of compliance encouraged, unregulated institutions as well.

Key obligations

• Institutions should not enter into a business relationship or carry out a significant one-off transaction unless they have fully implemented verification, recognition, reporting, record-keeping and training systems.
• All financial institutions should appoint a Reporting Officer as the point of contact with the Reporting Authority for suspicious customers and transactions.
• All institutions should produce an instruction manual relating to entry, verification and records based on these Guidance Notes and provide it to key staff.
• Institutions should keep records for the prescribed period of time.
• Where a BVI-headquartered group operates branches or subsidiaries elsewhere, it should ensure they observe these Guidance Notes or at least equivalent local standards, keep them informed of group policy, and ensure each knows its local equivalent of the Reporting Authority and disclosure procedures.
• Institutions should ensure internal auditing and compliance departments regularly monitor the implementation and operation of vigilance systems.
• The FSD expects evidence on file that due diligence checks have been carried out on accounts acquired during the purchase of a new business, in whole or in part.

Applies to

banking institutions, investment business licensees, fiduciary business (trust companies and company formation agents), insurance institutions, recognized foreign regulated institutions, licensed service providers generally