Friday, February 29, 2008

BVI FSC Supplements Anti-Money Laundering Legislation

On 25 February, BVI FSC published 3 new documents related to Anti-Money Laundering legislation. The documents were gazetted on February 22, 2008. The largest document, including 127 pages, is Anti-Money Laundering and Terrorist Financing Code of Practice, 2008. It is divided into 8 parts and 2 schedules and covers such important topics as:

  • general duties of Financial Investigation Agency and the Financial Services Commission;
  • information on establishing internal control systems, i.e. duties and responsibilities of Officers and employees, reporting on suspicion, etc.
  • requirements on customer due diligence, general verification, verification of legal person, requirement for certified documentation;
  • prohibition of shell banks and restrictions on corresponding banking relationships;
  • wire transfers, requirements on record keeping and on employee training.
  • information exchange between public authorities and with private sector, application of counter-measures, guidance on the types of suspicious activities and transactions, etc.
Schedule 2 of the above document includes the list of offences and administrative penalties for failure to execute this code of practice. For example, failure to keep records of full originator information on payer is punishable with $3,500 penalty both to Corporate body and Individual, but failure to review and keep up-to-date customer due diligence information in the required manner will be punished with $1,500 penalty for individual and $2,500 penalty for corporate body.

Non-Financial Business (designation) notice, 2008 is the shortest one from three Anti-Money laundering documents published on the BVI FSC site and it clarifies that any person engaged in the business of buying and selling high-valued goods and accepting/making cash payments in the amount more than $15,000, or equivalent in another currency, “is designated as an entity vulnerable to activities of money laundering and terrorist financing, and shall comply with the requirements of the above-named Code of Practice. This document complies with the newly adopted Anti-Money Laundering/countering the financing of terrorism (AML/CFT) regime, extending coverage of anti-money laundering measures to high-end goods dealers.

The third document is Anti-Money Laundering Regulations, 2008 and it includes identification procedures in relation to new and continuing business relationships, exceptions to identification procedures, maintaining record of transactions and reports, maintaining register of money laundering reports and inquiries, duty to appoint Money Laundering Reporting Officer, due diligence audit, establishment of procedures in relation to suspicious transactions, etc.

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