New policies to govern NPOs in BVI

Minster for Social Development Marlon Penn has, on behalf of the government, proposed several changes to the Non-Profit Organisations (NPOs) Act to better govern NPOs in the territory to prevent them from exposure and abuse by terrorist networks.

Speaking at yesterday’s sitting of the House of Assembly (HOA), Penn said the Non-Profit Organisations Act (2022) provides for registration, supervision, and monitoring of NPOs operating in the Virgin Islands.

“Its fundamental purpose was to create a modern regulatory framework to ensure NPOs are vetted, certified, and supported in providing vital support to our community while protecting our non-profit sector from exposure and abuse by terrorists on terrorist networks. Since the implementation of the act, 366 NPOs have been registered with 80 being current at present. This bill before us today (the Non-Profit Organisations (NPO) Amendment Act, 2022) seeks to further enhance the effectiveness of the principal act by aligning its provisions with international regulator practice for the non-profit sector as they have evolved over the last decade,” Penn said.

“Members would be aware that the Financial Action Task Force (FATF) is the body that sets international standards on global money laundering and terrorist financing. The FATF understands that not all NPOs are exposed to the same risks of abuse from terrorist entities and recommend that a risk-based approach should be considered in domestic laws that are designed to protect these organisations. Concerns have also been expressed that certain languages in our legislation lead to overregulation and inappropriate restrictions on NPOs which may hamper their legitimate and essential work,” the Social Development Minister said.

He noted the bill seeks to ensure the laws still adequately protect NPOs from misuse for the financing of terrorism while at the same time respecting their legitimate activities.

Penn added that the amended legislation seeks to ease administrative challenges related to the registration and renewal of NPOs, as well as their monitoring and supervision and ensure that overall, the legislation is not unduly onerous on the non-profit sector.

Clauses one to five

“Clause one set out the short title. Clause two will amend Section 2 of the principal Act by inserting new definitions that will reflect the risk-based approach to registration and replacing the definition of relevant legislation. Clause three will amend Section 3 of the principal act by providing for a Deputy Secretary in the Ministry to attend meetings of the boards in absence of the Permanent Secretary,” Penn said.

“Clause four would amend Section 4 of the principal act by providing for the board to co-opt persons to assist or advise on specific matters, where necessary, including the director of the Financial Investigation Agency or his or her nominated representative. Clause five would amend Section 6 of the act by providing for ex officio members to be excluded from voting at meetings where the decision relates to the approval or refusal of the application,” the Minister added.

Clauses six to seven

He noted that Clause six will amend Section 12 of the Act which deals with the submission of application for registration including constitutional documents. Penn explained that Section 12.3(e) requires that the NPOs constitutional document includes the duties and powers of the governing body.

“This amendment would provide for organisations that are unable to comply with Section 12.3(e) to submit an amended constitutional document within 30 days of submitting a declaration to the board,” he added.

“Clause seven will replace Section 13 of the principal act by providing for extending the renewal of registration for organisations but also provide for application for renewals to be made in a new form, and for ‘B’ in schedule one for the annual financial statement to be submitted with the applications for renewal,” the Social Development Minister said.

Clauses eight and nine

Clause eight would amend Section 14 of the Act by providing for categories of organisations to be set to be specified in a new Schedule 5, specifically, churches or religious organisations, youth organisations, service clubs and associations, sporting organisations, performing arts companies/groups, community organisations, foundations, and national, or country associations. He added the amendment to Section 14 will also provide for the Minister to hear and decide appeals from the decision of the board within a specified time.

“Clause nine will amend Section 15 of the principal act by providing an organisation to … apply for a renewal of its registration within 30 days of the expiration of that message registration, but also provide for the registration organisations to be restored to the register and payment,” Penn said.

Several other amends were made to the principal act and these include empowering the FIA to make on-site and off-site inspections. The amendments also give the FIA the discretion to determine the level of supervision required for each NPO based on a risk-based approach and whether to exempt an NPO from active supervision.

New clauses were also introduced and these will require organisations to provide staff training related to laundering, terrorist financing and other criminal financial activities.

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