Friday, February 20, 2009

BVI FSC Makes Changes to BVI AMLTF Code

The BVI FSC has amended the BVI’s Anti Money Laundering and Terrorist Financing Code of Practice which has an impact upon all BVI-registered entities and professionals. The current changes also changed Code’s effects on BVI offshore mutual funds, their managers and administrators. These amendments are the first of a series of changes to the Anti Money Laundering and regulatory regime of the British Virgin Islands. They are effective from February 5, 2009, and will be subject to active enforcement by the FSC from February 22, 2009.

The changes were implemented as a result of financial industry consultations and the recent CFATF report of the BVI, and many of them are expected to be of great practical significance. The Commission produced the list of countries and territories which are acknowledged as “recognized jurisdictions” equivalent to the BVI for anti money laundering purposes. Also, now it is accepted that a BVI entity (including a mutual fund) may outsource many of its Anti Money Laundering Compliance functions to other persons or entities both inside and outside the BVI.

The FSC accepted that an administrator from a recognized jurisdiction from the list, observing its local Anti Money Laundering and know-your-customer regime for a BVI fund, is compatible with that BVI fund’s own obligations under the Code. The Commission removed the presumption that enhanced customer due diligence should be applied in cases of non face to face business, and introduced the Wire Transfer Test to assist the verification of customer due diligence.

Among the new obligations there are: the requirement to have written outsourcing agreements with service providers which set out how Anti Money Laundering compliance is achieved, and the requirement to introduce an independent audit function for Anti Money Laundering and know-your-customer regime compliance.

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