In an increasingly competitive and changing market, the British Virgin Islands ("BVI") continues to attract offshore finance and commerce and maintains its status as the leading offshore corporate domicile.
As of April, 2001 over 436,000 International Business Companies have been incorporated in the Territory, approximately 60,000 of which were incorporated in the previous year. Following the success of the Mutual Funds Amendment Act, the BVI is now considered a premier offshore jurisdiction for Mutual Funds with 1,930 Mutual Funds recognised or registered in the BVI. The BVI has also witnessed tremendous growth in the offshore insurance sector and now has 234 licensed Insurance Companies, comprising 150 Captive Insurance Companies, 54 Credit Life Companies and 30 Domestic Insurance Companies. In addition the Territory has 14 licensed Banks and 73 licensed Trust and Management companies.
To further enhance this reputation and play its part as a responsible financial center in the international fight against money laundering, the BVI recently enacted two pieces of legislation, designed primarily to assist regulators in combating money laundering.
Anti-Money Laundering Code Of Practice, 1999
The Anti-money laundering Code of Practice, 1999 (the "Code") came into force in December, 2000 and is intended to complement existing anti-money laundering legislation, particularly the Proceeds of Criminal Conduct Act, the Drug Trafficking Offences Act, the Criminal Justice (International Co-operation) Act and the Mutual Legal Assistance (USA) Act. Also published in December, 2000 were Guidance Notes on the Prevention of Money Laundering.
The function of the Guidance Notes is to offer guidance to Financial Services Providers, in the BVI, in complying with this far-reaching legislation. The Guidance Notes, although not mandatory, will be used by the Financial Services Department and possibly the BVI Courts, in determining whether or not a BVI Financial Services Provider acted diligently in preventing, detecting and reporting money laundering.
In order to fulfil its legal obligations under the Code and meet the standards laid down by the Guidance Notes, AMS is in the process of implementing a verification exercise for all its existing end-user and professional service clients. To this end, AMS will soon be contacting clients to request certain verification and due diligence information. All information is, of course, retained by AMS in the strictest confidence.
Financial Services (International Co-operation) Act 2000
This Act is designed to provide controlled and carefully considered assistance from the BVI Director of Financial Services, to recognised overseas authorities, for the purposes of carrying out their regulatory functions. It is worth noting that the definition of "regulatory functions" expressly excludes the functions of "assessing, imposing or collecting taxes".
The new legislation is further evidence of the BVI’s commitment to complying with established international financial regulatory standards, while at the same time remaining sensitive to the commercial concerns and objectives of the hundreds of thousands of companies, partnerships, high net worth individuals and investors who, in their international financial planning, have and continue to entrust and benefit from the Territory’s services and products. Responsible regulation will only help to ensure that the BVI continues to be a leader in providing complete offshore services and innovative products.
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