BVI modernises AML requirements to recognise new technologies

Following consultation with the Joint Anti-Money Laundering and Terrorist Financing Advisory Committee (JALTFAC), the Anti-Money Laundering Code was amended on 19 July 2018 by means the Anti-Money Laundering and Terrorist Financing (Amendment) (No. 2) Code of Practice, 2018. The amendments came into force as of 1 August 2018.

The major amendments are as follows:

Electronic verification of identity

The BVI has positioned itself as a trendsetting financial jurisdiction in which cutting edge identification technology may be used. Specifically, a new sub-section, 6A, was inserted under section 23 to permit an entity or a professional to use such electronic or digital means as it considers appropriate to carry out the verification. Such means include the use of proprietary software and/or programme by a BVI institution to conduct electronic/digital verification – including verification by digital, electrical, magnetic, optical, electromagnetic, biometric and photonic form. Essentially, this means that a BVI entity or professional may either develop or use available ID Verification App Services to complete identification verification.

Additionally, a BVI entity or professional may outsource its customer verification function to another service provider where the selected service provider meets certain conditions as listed in the AML Code. A BVI entity or professional relying on this type of verification must ensure that it engages in a cyclical monitoring process at least every three years to keep track of any changes in the listed conditions or to satisfy itself as regards compliance or non-compliance with the conditions, and to act accordingly.

BVI Modernises AML requirements to recognise new technologies

Under the previous regime, a non face-to-face transaction and business relationship were required to be treated as high risk. The amendment clarified and changed this requirement whereby under the new regime a BVI entity or professional need not automatically treat a non face-to-face applicant for business or a customer as high risk. Such a customer may only be treated as high risk in circumstances where it is satisfied that the applicant for business or customer presents a high risk or is otherwise engaged in money laundering or terrorist financing.

Certified Documents

Under the old rules, KYC documents such as passports and utility bills had to be appropriately certified by a designated professional. Such certifiers would be required to attest, with specific words, that he has seen and compared the original document verifying the identity and that the photograph bears a true likeness to the individual to whom the certification.

The amendment has effectively eliminated the need for specific wording. This seemingly simple change paves the way for BVI entities and professionals to use electronic means to complete verification of identity.