New Anti-Money Laundering and Terrorist Financing Code of Practice, 2008

The BVI introduced the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008 (the “Code”) along with the Anti-Money Laundering Regulations, 2008 (the “Regulations”) in February of this year. The Code is issued pursuant to section 21 (1) of the Proceeds of Criminal Conduce Act, 1997 and is issued as subsidiary legislation thereto.

The objectives of the Code as highlighted by the Financial Services Commission (FSC) is to bring about a greater understanding and appreciation of the current legal, regulatory and regulatory and enforcement regimes with respect to compliance with anti-money laundering and terrorist financing measures. The aim is to assist persons in the law enforcement and regulatory and non-regulatory specific sectors of the economy to develop and implement systems that effectively combat activities designed to abuse the legitimate tools of business transactions through criminal conduct.

There are eight key sections to the Code:

• Duties of the Financial Investigation Agency and the FSC

• Establishing Internal Controls

• Effecting Customer Due diligence

• Shell Banks and Correspondent Banking

• Wire Transfers

• Record Keeping Requirements

• Employee Training

• Miscellaneous

The Code sets down minimum standards of compliance; however, those affected by the Code are free to adopt such additional measures they consider relevant and prudent to prevent their business from being caught up in unsuspecting acts of money laundering and terrorist financing. Included in this is enhanced customer due diligence where there is a potential higher level of risk or for certain single transaction situations.

Also covered in the Code is the eligibility of persons or entities introducing new business to the local service provider. The introducer must satisfy the requirements of the Regulations, and if a foreign introducer, it must be regulation to international standards (FATF). In the case of a professional introducer, the introducer must be governed by “established rules of professional conduce…” . Most importantly, the BVI service provider must always satisfy itself that relevant records relating to the identity and verification of the applicant are maintained by the originating entity.

The Regulations covers the following:

• General requirements to be met prior to entering into a business relationship

• The required identification procedures in relation to introduced business

• The establishment and the maintenance of records verifying client identity

• The maintenance of a complete record of transactions and of any reports made to the Financial Investigation Agency (FIA)

• The limitation period for the retention of records

• The format and ability to retrieve records including reliance on the records of a third party

• Maintaining a register of money laundering reports and enquiries

• The duty to appoint a qualified Money Laundering Reporting Officer

• Authority of the FIA to undertake due diligence audits

• The establishment of procedures in relation to suspicious transactions

• Staff training

• Offences and penalties for non-compliance

For more information contact us at mail@ccslbvi.com or visit the Financial Services Commission website www.bvifsc.vg