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Anti-money laundering standards

The Caribbean Financial Action Task Force (CFATF) has published a mutual evaluation report on the British Virgin Islands' anti-money laundering and combating the financing of terrorism (AML/CFT) regime.

The report, published in December 2008, found that the BVI is largely compliant with international standards and that it has maintained a robust public policy commitment to the global fight against money laundering and the financing of terrorism. The report states that "Successive Virgin Islands governments have promoted policies to ensure that the jurisdiction can play its part to effectively combat cross-border financial crimes, maintain a reputation of being a clean jurisdiction and where it is found that the jurisdiction has been used by criminals to fully cooperate with the international community. This government commitment has led to the jurisdiction being in the forefront in the introduction of modern financial services legislation such as a licensing regime for trust and corporate service providers, immobilisation of bearer shares and the introduction of mandatory suspicious activity reporting obligations."

This was the third CFATF evaluation of the BVI and the first based on the methodology devised by the International Monetary Fund for the implementation of the FATF's 40 recommendations and nine special recommendations relating to money laundering and terrorist financing respectively. It identified several specific actions taken since the last evaluation in 2003, which strengthened the territory's AML/CFT regime. These include the following.

  • The amendment in 2006 of the Proceeds of Criminal Conduct Act 1997 to incorporate a system of mandatory suspicious transaction reporting.
  • The enactment in 2008 of the Anti-money Laundering and Terrorist Financing Code of Practice, which replaced the previous policy and provided a new and enhanced regime covering both money laundering and terrorist financing matters. Among other things, the Code of Practice extended the AML/CFT regime to designated professions and non-financial businesses, including yacht brokers, precious metal dealers, car and heavy machinery dealers and businesses leasing office equipment.
  • The amendment of the Drug Trafficking Offences Act and the Proceeds of Criminal Conduct Act to expand the definition of cash to include bearer-negotiable instruments.
  • The institution by the BVI Financial Services Commission (FSC) of on-site supervisions to ascertain whether financial services providers are implementing adequate anti-money laundering measures.
  • The establishment of a number of memoranda of understanding between the FSC and jurisdictions and entities including Canada, Jersey, Mexico, Panama, Puerto Rico, the BVI Financial Investigations Agency, IOSCO and Caribbean Regional Regulators.
  • Increased training for Royal Virgin Islands Police Force officers in the investigation of money laundering and terrorist financing, the acquisition of four dogs by the Customs Department and the increase of the number of undercover investigative operations.

The report looks forward to the impending passage of the Financing and Money Services Act, which outlines licensing requirements for money service businesses in the BVI. It recommends greater regulation of the non-profit sector, increased resource allocation for the FSC and the Royal Virgin Islands Police Force, increased monitoring by the FSC and enhanced customer due diligence and record-keeping requirements.

Richard Peters

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