British Virgin Islands: Guv okays bills to deter financial crime

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Six bills designed in large part to deter financial crime took effect recently after receiving assent from Governor John Rankin.

The Proliferations Financing (Prohibition) Act, 2021, passed in the House of Assembly on May 11, is designed to prevent the “proliferation of weapons of mass destruction.”

Based on recommendations from the United Nations Security Council, the law includes a lengthy list of punishable offences, with corporate bodies facing fines up to $500,000 for facilitating transactions to fund terrorism, while individuals could pay up to $250,000 and serve three years in prison.

Premier Andrew Fahie said when bringing the bill for a second reading that the UNSC resolutions require member countries to freeze the funds of individuals engaging in proliferation.

Besides ensuring international compliance, the bill should also help the VI police itself, he said. Mr. Rankin assented to the law and 11 others Gazetted on June 22.


Criminal code 

Also among them was the Criminal Code (Amendment) Act, 2021, which focuses on thwarting tax evasion.

For intending to defraud the government, the bill prescribes a maximum 10 years’ imprisonment and $500,000 fine.

Such fraud includes giving false revenue information to the public service, omitting required data, or obstructing the public service. The bill passed the HOA on May 11.


Drug trafficking 

Mr. Rankin also assented to the Drug Trafficking Offences (Amendment) Act, 2021, which the HOA passed on May 11.

The law empowers an investigating officer of the Financial Investigation Agency to explore whether certain drug trafficking offences also involved money laundering.

It also allows police or customs officers to seize cash suspected for use in drug trafficking or drug money laundering.

The Proceeds of Criminal Conduct (Amendment) Act, 2021, which also received the governor’s assent, similarly allows law enforcement to more broadly investigate money laundering and terrorist financing.

The National Anti-Money Laundering and Terrorist Financing Coordinating Council, chaired by the premier, will act as the territory’s focal point for making sure the VI complies with international enforcement standards.

Also getting the governor’s green light was the Customs Management and Duties (Amendment) Act, 2021, which aims to prevent travellers from carrying undocumented money in and out of the territory, among other provisions.

Mr. Fahie said the measure should help the VI avoid blacklisting during an upcoming Financial Action Task Force evaluation.


Economic substance

Mr. Rankin also assented to the Economic Substance (Companies and Limited Partnerships) (Amendment) Act, 2021, which was Gazetted on June 29.

The act, which the House passed on June 17, adds definitions for terms including “investment fund” and “investment fund business” to describe entities that aim to raise or pool funds to benefit the holder, excluding people licensed or registered under the Banks and Trust Companies Act 1990, Insurance Act 2008, Cooperative Societies Act 1979, or Friendly Societies Act 1928.

The 2018 Economic Substance Act stipulates that a legal entity carrying out “relevant activities” — such as business in banking, insurance, fund management, finance and leasing, headquarters, shipping, holding, intellectual property, and distribution and service centres — must comply with the economic substance requirements of the act.

The new amendment specifies that investment fund business doesn’t count toward “relevant activities.”


by Dana Kampa, July 9, 2021, published on The BVI Beacon

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