New response deadlines have been imposed for Financial
Investigation Agency (FIA) information requests.
The Financial Investigation Agency Act, 2003 (FIA Act) has
been amended, as of 2 December 2013, to require any entity or
individual subject to the FIA's jurisdiction to respond to
information requests within a new statutorily-imposed deadline.
Under the amendments responses from the private sector must be
submitted within five working days following receipt of the
information request.
Indications are that the timeframe is interpreted very rigidly by
the FIA and any requests for time extensions are likely to be
denied. Indeed, in contrast to many statutory timeframes, there is
no express provision enabling the FIA to agree to extend the
period.
What to do when a request is received?
The FIA typically issues requests for information in response to
requests for mutual legal assistance from overseas law enforcement
agencies pursuing persons involved, or perceived to be involved, in
money laundering, terrorist financing or other financial offences
anywhere in the world. Receipt of a request for information from
the FIA is therefore an important and serious matter to be dealt
with appropriately by all recipients.
Requests for information are subject to strict "anti-tipping
off" rules, meaning that the existence and details of the
requests must not be disclosed to any third parties, excluding
legal counsel.
Given the short timeframe for compliance, all businesses operating
in the financial services sector should review their internal
procedures to ensure that information can be delivered in time. In
particular, registered agents who operate with one or more
qualified introducer(s) should review the terms of their agreements
with introducer(s) so that AML information can be retrieved in a
very short timescale.
A further complication is that a carve out exists for information
subject to legal professional privilege. While, historically,
most requests have concerned information such as AML records which
are very unlikely to be subject to privilege there is nothing to
stop the FIA from making much more comprehensive requests which
does include material subject to privilege. Determining what
material is subject to legal professional privilege and what is not
can be a very difficult and time consuming exercise. One would hope
that the FIA is pragmatic should the request concern such
material. What is worse for the recipient of the request is
that anti-tipping off makes it difficult to seek a waiver of
privilege from the client and/or enable a fee to be charged for the
work that must be done in separating material that is or is not
subject to privilege.
What happens if a request is not complied with?
Under the FIA Act, a recipient which fails to comply with a request for information commits a criminal offence and is liable on summary conviction to a fine not exceeding US$20,000 or to imprisonment for a term not exceeding two years, or to both. In addition, firms licensed by the Financial Services Commission in the BVI may face serious repercussions from the regulator in the event that they fail to comply with any FIA request.
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.