BVI Strengthens AML/CFT/PF Policies for 2024-2026 to Combat Financial Crimes

In June 2024, “The British Virgin Islands” (BVI) updated its “ money laundering, terrorist financing, and proliferation financing  policies and strategies for 2024-2026” to protect its ‘financial sector from financial crimes such as money laundering and terrorist financing.’

“The Financial Action Task Force (FATF) and the European Union” have enforced rules and applied global influence to push for enhanced measures to promote financial transparency. BVI has demonstrated its dedication to engaging in that struggle.

Strategic Update of National AML/CFT Coordinating Council (AMLCFTCC)

In the BVI, the main agency is “The National AML/CFT Coordinating Council (AMLCFTCC)” for safeguarding the financial system from illicit activities, referred to as financial crimes

which include “money laundering, terrorist financing, and proliferation financing.”

Definition of Proliferation financing

“To facilitate the manufacturing, development, or purchasing of weapons of mass destruction (WMDs) or means of transferring those weapons, the financial services or the funds provided are known as proliferation financing.”
Weapons of mass destruction include different types of weapons, like “Nuclear, chemical, or biological, and missiles.”

Strategies for counter-proliferation financing

Rules and regulations are established to enforce measures to prevent the proliferation of financing. The following are common strategies:

• Freezing Assets
• Detecting and reporting suspicious transaction
• Implementing global sanctions

Inquiries by AMLCFTCC

Many investigations have been conducted by the Anti-Money Laundering and Countering the Financing of Terrorism Compliance Controls (AMLCFTCC) to establish a financial system free from financial crimes and improve the efforts to combat financial crimes.

Policy and Strategy Updates

• Following the results, in June 2024, the National AML/CFT Coordinating Council (NAMLCC) accepted the amended “National AML/CFT/CPF Policy and related strategies for 2024-2026.”
• These revisions comply with FATF Recommendation 2, which states that AML/CFT policies should be established by periodically reviewing risk assessments and updating the AML/CFT policies based on those findings to ensure they remain relevant to risks.
• Purpose: The revised material will deliver a clear understanding of ways to reduce specific risks linked with certain financial crimes such as “Money Laundering (ML), Terrorist Financing (TF), and Proliferation Financing (PF).”

Statements of Dr. Natalio Wheatley

Chairman of NAMLCC, “Premier Dr. Natalio Wheatley,” has highlighted the significance of this move by stating, “As we continue to face the ever-evolving threats of money laundering, terrorist financing, and proliferation financing, it is essential that the Virgin Islands remains agile and proactive in our response.”

The updated strategy aligns with international AML/CFT guidelines and highlights major shifts in efforts to safeguard the Virgin Islands’s financial system.

“We are committed to working closely with all stakeholders to implement these strategies effectively and to ensure that the Virgin Islands remains a safe and secure jurisdiction for legitimate business,” He added.

Key Measures of Strategy for 2024-2026

AML/CFT Legislation and Regulatory Framework

AML/CFT legislation in BVI has been established in accordance with the recommendations of the Financial Action Task Force (FATF). The following are the key points:

• Acts such as “the Proceeds of Crime Act and the Anti-Money Laundering Regulations are laws that help to provide regulations for reporting suspicious activity in financial institutions.”
• BVI passed the “Beneficial Ownership Secure Search System Act (BOSS)” in 2017, which instructs financial organizations to announce their financial authorities to maintain the transparency of the financial ecosystem of foreign countries,
• The Financial Investigation Agency (FIA) investigates financial crimes such as money laundering and terrorist financing.

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Collaboration with Global Organisations

• BVI collaborates internationally with organizations such as “FATF, the Caribbean Financial Action Task Force (CFATF), and the European Union” to align the regulatory AML framework with international AML/CFT guidelines.
• Audits, risk assessments, and reviews of AML compliance periodically are conducted to keep the laws upto date and comply with international guidelines to combat financial crimes in BVI.

Preservance of Transparency in Financial Services

• BVI has implemented improved AML/CFT regulations for foreign financial services and established rules for companies and trust setups in the market.
• They have mandated guidelines and practices to preserve transparency in the financial systems, especially about beneficial ownership, and prevent financial crimes such as “money laundering or tax evasion” from unknown entities.
• Recently, BVI has agreed with international information exchange programs, which involve the “OECD’s Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) with the United States.”

Public Beneficial Ownership Register

• BVI has no public access to the Beneficial Ownership Register, but it shares the data with law enforcement agencies and other officials securely for the exchange of information for supervision.
• BVI provides data through the BOSS system, but the public is restricted from accessing it.

Enhanced Due Diligence and Suspicious Transaction Reporting

• Financial organizations must conduct “customer due diligence (CDD) and enhanced due diligence (EDD)” processes in BVI, particularly for high-risk transactions of individuals and high-risk countries.
• They must undergo different processes such as “identifying and evaluating the risks, reporting suspicious transactions, and keeping records of all transactions and client-related data for specific periods.”

Penalties for Non-Compliance with AML/CFT Regulations

• Failure to comply with AML/CFT regulations leads to financial institutions facing severe penalties as recommended by BVI’s authorities.
• To avoid penalties, AML compliance with international guidelines is important. Financial organizations must ensure that they fulfill their obligations seriously.

Training and Awareness

• To make sure the regulatory bodies and financial institutions are aware of AML/CFT requirements, ongoing training is conducted by BVI’s government.
• BVI’s government and AML regulatory bodies arrange training workshops on anti-money laundering (AML) and counter-terrorist financing (CFT) for financial institutions to ensure robust AML/CFT compliance.

Virgin Islands AML/CFT Strategy Combats Financial Crime

• The BVI shows a strong commitment to preserving the reputation of a well-organized offshore financial center. Moreover, there is enough stress for a more transparent financial system and having a proper “public beneficial ownership register.”
• NAMLCC proposed the “Inaugural National AML/CFT Policy and a three-year Strategy of the Virgin Islands for reducing risks related to money laundering and terrorist financing risks.”
• As the “National Risk Assessment (NRA) of the Virgin Islands 2016” report has been created to explain and comply with international AML/CFT guidelines, money laundering and terrorist financing risks are mentioned.
• These documents were created to explain the ML/TF risks highlighted in the National Risk Assessment (NRA) of the Virgin Islands 2016 and ensure AML compliance with international AML/CFT guidelines.
• Since a chain of “ML, TF, and PF risk assessments” have been carried out.
• These actions, along with findings from the fourth “Round Mutual Evaluation Report (MER),” have given us a better understanding of the current and potential risks related to “money laundering (ML), terrorist financing (TF), and proliferation financing (PF) in the Virgin Islands.”

As highlighted in the National AML/CFT Policy and Strategy, BVI’s commitment to combating financial crimes and maintaining a transparent and secure financial ecosystem is evident, and it aligns with FATF’s recommendations to ensure international compliance.