BVI to be assessed on anti-money laundering policies

Ahead of an assessment of the territory’s anti-money laundering structure, Managing Director of the BVI Financial Services Commission (FSC) Kenneth Baker has said he anticipates the legislative process for this structure “will be complete” by year’s end.

Baker, who is also the FSC’s Chief Executive Officer, said the government has, over the years, taken several steps in amending its legislation to reduce financial crimes in the territory.

“The BVI has made significant progress, but we have some ways to go,” Baker stated earlier this month.

The territory’s progress in mitigating money laundering was highlighted during a live broadcast of an ongoing ‘What is Money Laundering?’ series being hosted by BVI Finance.

The assessment

He explained that a number of amendments have been made to local financial services legislation, all in preparation for the upcoming Caribbean Financial Action Task Force (CFATF) assessment, and in compliance with international regulatory standards.

The assessment determines the effective implementation of, and compliance with, the Financial Action Task Force’s (FATF) recommendations to prevent and control money laundering and to counter the financing of terrorism and proliferation of weapons.

Baker said the BVI’s role was to translate the FATF’s recommendations through domestic legislation or regulations.

“Those recommendations are the measures that should be in place to prevent money laundering. The CFATF assesses whether the jurisdiction has the right legislation in place, and the overall effectiveness”.

The FSC’s CEO said the last assessment was carried out in 2008 and the Virgin Islands received a fairly good assessment as the territory already had much of the required legislative framework in place to combat money laundering and other financial crimes.

He further said that since the last assessment, the FATF has revised the methodology used for testing and it added an effectiveness component which accounts for approximately 80-percent of the overall assessment score.

“A jurisdiction would have to demonstrate that you are identifying potential money laundering cases, you are investigating them, prosecuting where necessary, conviction and confiscation of the proceeds of the crime. If a jurisdiction can demonstrate those steps, you’re well on your way to have a good outcome in the assessment process,” Baker said in describing what determines the effectiveness of the legislation.

People outside financial services exposed to laundering

The FSC boss said people within and outside of the financial services industry may be exposed to some level of money laundering from time to time. But he said this can be avoided by asking questions, knowing the persons they are doing business with, and being suspicious when something does not feel right.

The CEO further said it is part of a bank’s legal requirements to ask questions about financial transactions.

“There are some international standards that require banks and financial services institutions to not only be able to identify clients, but to also know the source of funds, and monitor the transactions,” Baker said.

“If the amount you are depositing suddenly increases, the bank will inquire and if a proper explanation and documentation is not provided, they will likely file a suspicious activity report with the Financial Investigation Agency who will determine if something nefarious is happening,” he added.

Baker said the assessment stages of the effectiveness of the legislation include the dissemination and submission of questionnaires along with personal interviews with both private and public sectors to determine the level of understanding of the anti-money laundering regime.