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Amendments to the Anti-Money Laundering (AML) regime largely affect ‘Eligible Introducer' arrangements. Historically BVI agents could rely on their professionally regulated clients in approved jurisdictions (known as eligible introducers) to risk-rate their clients and collect and hold the necessary due diligence. Under the new regime the correctly certified due diligence documents (passport and proof of address) can still be held by the regulated client, but now the agent is required to collect and hold all information needed to risk-rate the entity in the BVI – this includes the beneficial owner's identity details, the activity of the BVI company and the geographical location of its business.
Existing eligible introducers have the calendar year of 2016 to furnish their agent with the necessary information. Jordans has developed a ‘company profile' that will need to be completed for every company in 2016 . Completing the company profile in 2016 will enable us to continue to provide services to thecompany in 2017 and ensure our client company will remain compliant and in good standing.
Post-2016 there are ongoing monitoring obligations placed on the agent and its professional introducer to ensure the information held by the agent remain current and correct.
In terms of amendments to the BVI Business Companies Act many of the amendments are designed to offer legal flexibility for particular transactions and will not affect the day to day running of most BVI companies, but there are a couple of areas that every company will need to attend to in order to comply with the new legislation:
Record Keeping requirements
Record keeping requirements are largely unchanged – every company must supply its agent with a copy of various documents: register of directors, register of members, register of charges, impression of seal, each director's letter of consent to act, all documents filed at the registry by the agent, and a confirmation of the location of the original company books and records, including accounting records.
Under the amendments the record keeping requirements have changed slightly, but this change has a large administrative effect – now, the name of the individual responsible for keeping the accounting records must be named in the company's written confirmation of the location of its books and records. In practice this means that every single BVI company will have to write to its registered agent, or pass a resolution to name the person responsible for keeping the accounting records at the address it should already have specified. Existing companies have the calendar year of 2016 to comply with this new obligation.
After 1 January 2017 any company who has not supplied the registered agent with the statutory records will face a substantial fine in the event of the FSC becoming aware of the breach (in a spot check situation for example). We already have a system in place showing whether each company in our portfolio is compliant in terms of its statutory obligations under this point. If you would like to check what documents we're missing for your companies, please don't hesitate to contact me.
Register of Directors
Significant changes have been passed in terms of the register of directors. It is clear that every BVI company will have to file particulars on the current directors of every BVI company through its registered agent. These details will be held in the registry's electronic system (‘VIRRGIN') and will be accessible to the authorities. These provisions are not effective until 1 April 2016. After the effective date companies will have one year to comply.
There is some speculation within the industry that the exact nature of the information required to be included on the register of directors may be changed before implementation. In their current form the register of directors requirements under s118A do seem quite onerous, and create a significant administrative headache for the agents and users of the half a million active companies in the BVI who will have to obtain and supply details that were not necessarily previously held. We hope that there will be some further news on the possibility of a further amendment in this area in the next couple of weeks. Everyone is very conscious that clarity is needed in terms of what information is necessary and how it will need to be collected before we can start obtaining the required information from our clients, and amending our software to hold the information collected.
As soon as there is further information in this area I will be releasing an update.
The new filing requirements for the register of directors and the need to collect profiles of the beneficial ownership of BVI companies are a proportioned compromise to the demands of the OECD and the G-20 countries. Neither the director nor beneficial ownership information is open to public view, thus safeguarding the confidentiality of legitimate users.
Rights of inspection have been limited to the authorities, the company and its registered agent rather than a publicly accessible system.
These new provisions will allow the BVI to balance the needs of users of BVI companies with the international pressures to comply with changing standards in terms of transparency and accessibility of information.
If you have any queries or would like to discuss anything further, please do not hesitate to contact me.
The information provided in this publication are put forward for further consideration only and are not intended to be acted upon without independent professional advice. Neither Jordans Trust Company Limited nor its associated group companies , nor any employees or directors of these companies can accept any responsibility or liability for any loss occasioned to any person no matter howsoever caused or arising as a result of or in consequence of action taken or not taken in reliance on the contents of this publication.