Anti-Money Laundering Regulations (Revised 2020)

Summary

This is the BVI Financial Services Commission's core Anti-Money Laundering Regulations, which set out the customer due diligence, record-keeping, reporting and internal control framework that all businesses carrying on relevant business in or from the Virgin Islands must follow to detect and prevent money laundering. It works alongside the AML/CFT Code of Practice and the Proceeds of Criminal Conduct Act, and remains in force as amended through S.I. 86/2019.

• Who is covered: Persons carrying on 'relevant business', including banking and trust business, insurance business, company management, investment business/mutual funds/private investment funds, trust or company service providers, remittance and money services business, legal practitioners, notaries and accountants doing specified client work, real estate agents, and dealers in precious metals/stones or casinos above stated cash thresholds
• Identification and verification: Relevant persons must establish and maintain identification procedures for applicants for business (regulation 4) and verification procedures for ongoing transactions (regulation 5), including risk assessment and enhanced scrutiny for non face-to-face relationships
• Reliance on third parties: Regulations 7, 7A and 7B govern when a relevant person may rely on a third party's introduction of a customer, including a written business relationship agreement and an obligation to test the business relationship
• Record keeping: Relevant persons must keep records of identity verification, transactions and reports (regulations 8 to 11), and maintain a register of money laundering reports and inquiries (regulation 12)
• Governance: Each relevant person must appoint a Money Laundering Reporting Officer (regulation 13), conduct due diligence audits (regulation 14), establish procedures for handling suspicious transactions (regulation 15), and provide staff training (regulation 16)
• Regulatory approval: Identification, record-keeping, reporting and internal control procedures must be submitted for approval to the Commission (if the person is Commission-regulated) or to the Financial Investigation Agency (if not)
• Enforcement: Breach of the Regulations is an offence subject to penalties under regulation 17

A Schedule containing transitional provisions required relevant persons with pre-existing third-party-introduced business relationships to obtain the regulation 7(1) due diligence information from third parties by a compliance date of 31 December 2016, subject to possible Commission-granted extensions, with failure to comply exposing the relevant person to proceedings under regulation 17.

Key obligations

• Relevant persons must not form a business relationship or carry out a one off transaction unless they maintain identification, record keeping, internal reporting and internal control procedures (regulation 3)
• Relevant persons must submit their identification, record keeping, reporting and internal control procedures for approval to the Commission (if Commission regulated) or the Agency (if not)
• Relevant persons must establish identification procedures requiring satisfactory evidence of identity of applicants for business, and must not proceed with a relationship or transaction until such evidence is obtained
• Relevant persons must establish verification procedures for transactions undertaken after a business relationship is established, and must halt the relationship/transaction if satisfactory verification is not obtained
• Relevant persons relying on third party introductions must satisfy themselves the third party has verified identity and beneficial ownership, and must comply with regulations 7A and 7B (business relationship agreement and testing obligation)
• Relevant persons must maintain records of identity verification and of transactions and reports for the retention period specified, in a retrievable format
• Relevant persons must maintain a register of money laundering reports and inquiries
• Relevant persons must appoint a Money Laundering Reporting Officer
• Relevant persons must conduct due diligence audits
• Relevant persons must establish procedures for handling suspicious transactions and report them as required
• Relevant persons must provide staff training on recognising and handling suspicious transactions and on relevant legal requirements
• Relevant persons with pre-existing third-party-introduced relationships had to obtain regulation 7(1) information from third parties by the compliance date of 31 December 2016, or any extended date granted by the Commission

Applies to

banking and trust business, insurance business, company management business, investment business, mutual funds and private investment funds, trust or company service providers, money services and remittance businesses, legal practitioners, notaries public and accountants, real estate agents, dealers in precious metals or precious stones, casino operators, regulated persons, foreign regulated persons

Deadlines

• 31st December, 2016: Compliance date by which relevant persons with pre-existing third-party-introduced business relationships had to obtain the due diligence information required under regulation 7(1), per the transitional provisions Schedule
• within 7 months of the compliance date: Benchmark for 'sufficient progress' (50 percent of applicants/customers) used by the Commission when considering an extension of the compliance date
• within 10 months of the compliance date: Benchmark for 'sufficient progress' (75 percent of applicants/customers) used by the Commission when considering an extension of the compliance date
• at least seven days: Minimum written notice the Commission must give a relevant person before carrying out an inspection under the transitional compliance provisions