British Virgin Islands: Law of Offshore
Table of Statutes
This is a non-exhaustive list of the main British Virgin Islands statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute, the legal regime it forms part of, or in some cases the text of the law.
Anti-Money Laundering Code of Practice (2008) - (see below)
Banks and Trust Companies Act 1990
British Virgin Islands Trustee Act
BVI Business Companies Act, 2004
Companies Act 1963
Financial Services (International Co-operation) Act 2000
Financial Services Commission Act 2001
Financial Services Commission (Amendment) Act of 2004
Financing and Money Services Act, 2009
Hotel Aid Ordinance
Insurance Act 2008
Insurance Regulations 2009
International Business Companies Act 1984
International Business Companies (Amendment) Act 1990
International Business Companies (Amendment) Act 2002
International Business Companies (Amendment) Acts of 2003 and 2004
Limited Partnerships Act 1996
Mutual Funds Act 1996
Pioneer Services and Enterprise Ordinance
Property (Miscellaneous Provisions) Act, 2003
Public Funds (Sub-Class) Regulations 1997
Securities and Investment Business Act 2010
Trustee Amendment Act 1993
Trustee (Amendment) Act, 2003
Trustee Ordinance 1961
Virgin Islands Special Trusts Act, 2003
The formation of the Financial Services Commission (FSC) saw the division of the marketing and regulatory functions within the BVI offshore financial services centre. In practical terms the formation of the FSC means maintenance of the clear regulatory standards set out in previous legislation such as the Anti-Money Laundering Code of Practice (2000) and the Financial Services (International Co-operation) Act 2000. The FSC's primary functions include:
- Protecting consumers by ensuring that all firms, individuals etc. authorised to provide financial services in and from the BVI are competent and financially sound;
- Promoting improvements in public understanding of the benefits and risks associated with financial products;
- Instigating and pursuing action, including the imposition of fines, and issuing "cease and desist" orders;
- Monitoring, detecting and preventing financial crime, as well as assisting in the prosecution of crime;
- Pursuing these objectives in a way that is economic and efficient and which ensures that costs and restrictions on firms are proportionate to the benefits of regulation;
- Facilitating innovation in Financial Services in the jurisdiction;
- The new FSC ensures that all BVI companies comply with the same standards. The regulator is required to do more than simply administer and enforce the law, it is relied upon to provide guidance within the financial services industry.
In 2008, the BVI updated its anti-money laundering and terrorist financing regime with the issuance of a new code of practice on 20th February, in accordance with powers granted under Section 27 of the BVI Proceeds of Criminal Conduct Act, 1997.
The Code replaces the Guidance Notes on the Prevention of Money Laundering, issued in 1999, and mandates that relevant businesses and professionals must take particular measures to prevent, deter and tackle money laundering and terrorist financing.
In a statement accompanying the announcement of the new code, the FSC explained that:
"To protect its integrity and reputation as a well-regulated international finance centre, the BVI has adapted to the changing global environment and taken necessary measures to deter and confront financial crime.
"This enhanced and improved regulatory regime complements the BVI’s current robust international cooperation framework and effectively provides a sufficient check against the activities of persons involved in financial crimes."
The BVI’s current legislative arsenal of protection from financial crime now includes the Drug Trafficking Offences Act, 1992, Proceeds of Criminal Conduct Act, 1997, Anti-Money Laundering Regulations, 2008, Anti-Money Laundering and Terrorist Financing Code of Practice, 2008 and the Non-financial Business (Designation) Notice, 2008.
In December 2008, the British Virgin Islands received praise in a Caribbean Financial Action Task Force Evaluation Report.
The report concluded that the BVI is largely compliant with the FATF 40+9 Recommendations and that, as a territory, it has maintained a robust public policy commitment to ensuring that it plays its part in the global fight against money laundering and the financing of terrorism.
According to the BVI Financial Services Commission, the CFATF report highlighted the efforts undertaken by the BVI since the last CFATF mutual evaluation of the Territory in 2002 to ensure compliance with established Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) principles and the Territory’s commitment to the establishment of standards in legal, law enforcement, regulatory and international cooperation matters.
The FSC has published details of its Approved Persons Regime, which entered into force on March 2, 2009, following approval by the Board of Commissioners on January 20 of that year.
The guidelines, which were published by the FSC on February 18, 2009, are designed to assist the regulator in "the consideration and approval of applications for the appointment of senior officers, including applications relating to the approval of actuaries, auditors and other independent officers pursuant to any financial services legislation."
The guidelines also outline senior officer duties and responsibilities and incorporate a set of rules governing the process and procedure for the approval of senior officers of a regulated person and actuaries, auditors and other independent officers.
According to the guidelines, a suitable candidate for a senior officer position must be "qualified and have appropriate experience." In order to be appointed as a senior officer, a candidate must also demonstrate "a high level of competence and integrity." Additionally, before granting approval of an application for a senior officer, the Commission must be satisfied that the candidate is "fit and proper" in accordance with the criteria established in the Commission’s 'Guidance Notes on Fit and Proper Test.'
The introduction to the guidelines states: "the Commission exercises judgement and discretion in assessing fitness and propriety and takes into account all relevant matters including honesty, integrity, reputation, competence, expertise, experience, capability and financial soundness. These criteria have equal application to the consideration of applications for the approval of actuaries, auditors and other independent officers, whose qualifications and experience are generally covered under their respective applicable financial services legislation."
In January, 2010, the Financial Services Commission announced the coming into force of the Financing and Money Services Act, 2009, which lays a legislative framework for the licensing, regulating and supervision of persons who engage in the provision of money or value transfer services. The Act will bring the BVI into full compliance with the Financial Action Task Force’s Recommendation 23, which inter alia requires that natural and legal persons who provide money or value transfer services or money or currency-changing services should be licensed or registered.
The Financing and Money Services Act established a transition period of six months from the date the Act came into force for existing business to make the required application for licensing to the Commission.