The British Virgin Islands (BVI) has enacted useful enhancements to its anti-money laundering and counter-terrorist financing regime to enable the reliance on electronic innovations to expedite the verification of customers' identity.
The Anti-Money Laundering and Terrorist Financing (Amendment)
(No. 2) Code of Practice, 2018 (the AMLR Amendment) became
effective on 1 August 2018. It has given service providers the
ability to conduct verification by digital, electrical, magnetic,
optical, electromagnetic, biometric and photonic means. The AMLR
Amendment also contains guidance on what is considered sufficiently
extensive, accurate and reliable means of electronic or digital
verification, as well as an enhanced explanation of additional
measures that can be adopted by persons in compliance in order to
detect and deter money laundering, terrorist financing and other
such criminal conduct. This may include the use of proprietary
software or independent source documentation, data or
information.
This is a timely enhancement as the use of technology in creating
more efficient and cost-effective methods of conducting business is
growing exponentially. These changes ensure that the BVI remains
apace with our increasingly sophisticated operational landscape and
that as a jurisdiction, it is equipped to meet FinTech and RegTech
needs.
New and enhanced Limited Partnership Act
The BVI has also revamped its Limited Partnership regime by enacting a new BVI Limited Partnership Act, 2017 (LPA). The LPA enacted in 2018 is specifically targeted at private equity funds to provide a platform for subscription finance transactions. It is an alternative to the BVI Business Company with particular appeal where it's important to maintain the terms of a commercial relationship confidential and a flexible structure.
BVI will implement important changes to Segregated Portfolio Companies
The BVI has made a significant enhancement to the BVI Business Companies Act in relation to segregated portfolio companies (SPCs). Previously the use of SPC structures was restricted only to regulated insurance companies and regulated funds. The amendment, which comes into force on 1 October 2018, will broaden the uses of SPCs to also enable non-regulated companies and closed ended funds to segregate their assets into different portfolios in order to better manage and reduce their liability. The amendments also enable a segregated portfolio of an SPC to enter into contracts or agreements with other segregated portfolios in the same SPC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
