AML/CFT compliance for BVI regulated entities

Recently the BVI Financial Services Commission (“FSC”) has been taking a more active approach in monitoring compliance with the BVI’s anti-money laundering and counter terrorist financing regime. The regime, consisting amongst others of the Anti-Money Laundering Regulations 2008 and the Money Laundering and Terrorist Financing Code of Practice 2008 (the “Regulations”), is applicable to all BVI investment funds and investment managers.  

Under the Regulations, all applicable entities have the obligation – including but not limited to – establish and maintain an AML/CTF system of internal controls (the “AML policy”) in order to forestall and prevent money laundering and terrorist financing. One of these internal controls is the appointment of a money laundering reporting officer (the “MLRO”). In addition to the FSC’s approach, the BVI Financial Investigation Agency (“FIA”) has issued a public notice requesting to submit a notification form reflecting the appointed MLRO.

The MLRO fulfills an independent role within the entity and has access to all relevant information and material in order to oversee the internal controls of the AML Policy. Part of this role is to determine, on receipt of an internal report by the entities’ staff, whether it is necessary to submit a suspicious activity report to the FIA. By means of regular trainings, the MLRO will ensure awareness with the entities’ staff of its responsibilities under the Regulations, the AML Policy and the entity’s internal reporting procedures in case of a suspicious activity. In light of this, the MLRO will act (on behalf of the entity) as liaison to the FSC and FIA concerning the aforementioned MLRO duties.

AML Policy        
Besides the appointment of an MLRO, the AML policy shall at a minimum reflect client identification and verification procedures, internal reporting procedures regarding suspicious transactions, record keeping procedures and the performance of an independent audit in order to ensure a proper and adequate testing of compliance with the Regulations.      

Taking the above into account, an entity’s non-compliance could entail administrative penalties of up to USD 75,000 depending on the nature of the offence.

Circle Partners is as fund administrator able to provide a tailor-made solution in relation to the appointment of an MLRO and the drafting and implementation of the AML policy. If you wish to know more, please contact Gerben Oldekamp, Nick Neri, Joris Groot or your usual Circle Partners contact.