British Virgin Islands: International Comparative Legal Guide Business Crime 2018: BVI

Last Updated: 14 September 2017
Article by Arabella di Iorio and David Welford

Most Popular Article in British Virgin Islands, September 2017

1 General Criminal Law Enforcement

1.1 What authorities can prosecute business crimes, and are there different enforcement authorities at the national and regional levels?

There is no bar on private prosecutions for the vast majority of criminal offences; therefore, in theory, any authority or private party may prosecute. Section 59 of the Virgin Islands Constitution provides that the Director of Public Prosecutions ("DPP") shall have power, in any case in which he or she considers it desirable to do so, to take over and continue any criminal proceedings that have been instituted by any other person or authority, and is ultimately responsible for criminal prosecutions across the Territory. In practice, the DPP and Crown counsel prosecute offences in the BVI as opposed to any other authorities, albeit they are assisted by agencies such as the Financial Investigation Agency ("FIA") and the Financial Services Commission ("FSC").

1.2 If there is more than one set of enforcement agencies, how are decisions made regarding the body which will investigate and prosecute a matter?

This depends on the nature of the offence and the identity of the accused. Generally speaking, the police will investigate the majority of offences. However, the FIA has specific responsibility for the investigation and receipt of disclosures made in relation to money laundering. Additionally, the FSC will assist in investigating contraventions of the FSC Regulatory Code and other offences related to financial services.

1.3 Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat?

Yes, civil/administrative enforcement is available for contraventions of the FSC Regulatory Code and other financial regulatory crimes. Enforcement is mainly entrusted to the FSC.

2 Organisation of the Courts

2.1 How are the criminal courts in your jurisdiction structured? Are there specialised criminal courts for particular crimes?

The Magistrates' Court has jurisdiction to try summary offences only, i.e. offences which are triable either way and which have not been committed up to the High Court for trial. The High Court, which usually sits to hear criminal matters three times a year, is the superior court of record for indictable offences where the defendant has been committed up for trial. There are no specialised criminal courts for particular crimes.

Criminal appeals are to the Court of Appeal of Eastern Caribbean Supreme Court and then, ultimately, to the Judicial Committee of the Privy Council.

2.2 Is there a right to a jury in business crime trials?

The right to trial by jury arises only in respect of crimes triable on indictment. If the particular offence is triable on indictment and committed for trial before the High Court, the right to a jury trial will arise.

3 Particular Statutes and Crimes

3.1 Please describe any statutes that are commonly used in your jurisdiction to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:

Securities fraud

Sections 217 to 219 of the Criminal Code create offences in respect of fraud generally and, as such, fraud and misrepresentation in connection with the sale of securities may be prosecuted pursuant to those Sections.

Section 217 provides that any person who, by any deception, dishonestly obtains property belonging to another with the intention of permanently depriving the other of it, commits an offence. Obtaining property is defined as obtaining ownership, possession or control and includes obtaining for another or enabling another to obtain or retain.

Section 218 makes it an offence for any person who, by deception: (1) dishonestly secures the remission (in whole or in part) of any existing liability to make a payment, whether his own or another's; (2) with intent to make permanent default (in whole or in part) on any existing liability to make a payment, dishonestly induces a creditor to wait for payment or to forgo payment; and/or (3) dishonestly obtains any exemption from or abatement of liability to make a payment.

Under Section 219, it is an offence for any person to, by deception, dishonestly obtain for himself or another any pecuniary advantage or any services from another.

In addition, the Securities Investment and Business Act 2010 ("SIBA") specifically creates securities fraud-related offences under Section 91 (market manipulation and misleading statements). Liability arises where any person induces another to enter into or refrain from entering into an arrangement constituting securities business or dealing by: (1) making or being reckless as to making a statement that is false, misleading or deceptive; (2) dishonestly concealing facts; or (3) his general conduct in creating a misleading or false impression as to the market, price or value of an investment.

Accounting fraud

Accounting fraud is specifically covered by Section 221 of the Criminal Code, which makes it an offence for any person to dishonestly, with a view to gaining for himself or another or with intent to cause loss to another, destroy, deface, conceal or falsify any account, record or document made or required for an accounting purpose. In addition, it is an offence under this Section for any person who dishonestly, with a view to gaining for himself or another or with intent to cause loss to another, furnishes information for any purpose, produces or makes use of any account or any such record or document, which to his knowledge is or may be misleading, false, or deceptive. Any person who makes, or concurs in making, an entry in any account or other document which is or may be false, misleading or deceptive in a material particular, or who omits or concurs in omitting a material particular from an account or other document, is to be treated as falsifying the account or document.

It is also an offence, under Section 233 of the Criminal Code, for an officer or director of a company or unincorporated association (or a person purporting to act as such) to publish or concur in publishing a written statement or account or document which to his knowledge is or may be deceptive, false or misleading, with intent to deceive the members or creditors of the entity about the entity's affairs.

Insider trading

Section 88 of SIBA provides that an offence is committed when a person in possession of inside information deals or encourages another person to deal in price-affected securities or discloses inside information to another. There are a number of defences under Section 89 which include, for example, that the person: (1) did not expect the dealing to result in a profit; (2) believed the information to be widely disclosed; (3) would, in any event, have taken the same steps; (4) did not expect disclosure to result in dealing; or (5) had good faith in the course of business/employment. The defence of territorial scope of offence is also provided in Section 90.

Embezzlement

Embezzlement by a private individual may be prosecuted as a theft or fraud (see 'securities fraud' for the applicable provisions above). In addition, Section 81G of the Criminal Code provides that a public official who, in the discharge of his duties, commits any fraud or breach of trust against a private person (whether that fraud/breach of trust would have been criminal or not), commits an offence.

Further, pursuant to Section 81H, where a public official fails to give a satisfactory explanation for the significant increase in his assets when investigated for illicit enrichment, the significant increase in assets is deemed an illicit enrichment and the public official commits an offence.

Bribery of government officials

Sections 80 and 80A–E of the Criminal Code create various offences in relation to bribery of government officials. Section 80 makes it an offence for a public official to directly or indirectly solicit, accept or obtain a gratification for: (1) doing or abstaining from an act in the execution of his duties or facilitated by his functions or duties; (2) expediting, delaying, hindering or preventing the performance of an act by himself or another public official in the execution of that public official's duties; and (3) expediting, delaying, hindering or preventing another person in the transaction of business with a public body. Equally, it is an offence under Section 80A for a person to directly or indirectly offer a gratification to a public official in the foregoing circumstances.

Pursuant to Section 80B, it is an offence for a person to directly or indirectly solicit, accept or obtain a gratification in consideration for concealing an offence, not proceeding against any other person, and obtaining or endeavouring to obtain the withdrawal of a prosecution against any other person. This does not, however, extend to any lawful compromise as to civil interests resulting from the offence or lawful compromise arising out of mediation approved by a court or plea bargaining.

Section 80C makes the use of office by a public official for gratification an offence. Section 80D also makes it an offence for a person to bribe or offer to bribe a public official to influence the decision of a public body.

It is also an offence under Section 80E for a person who, in order to obtain or retain business or other undue advantage in relation to the conduct of international business, directly or indirectly gives or agrees to give or offer gratification to a foreign public official.

Criminal anti-competition

There is very little by way of criminal anti-competition offences in the BVI, and what does exist (i.e. offence of contravention of the Telecommunications Act which prohibits anti-competitive behaviour by public suppliers) only affects businesses licensed to trade in the domestic market.

Cartels and other competition offences

See the answer directly above.

Tax crimes

Save for in respect of businesses that are licensed to trade in the BVI, there are no applicable taxes in the jurisdiction. For businesses which are licensed to trade in the BVI domestic market, it is an offence to withhold payroll tax and social security contributions. By the International Tax Enforcement (British Virgin Islands) Order 2014, the BVI government agreed to greater spontaneous/automatic disclosure and sharing of tax information with the UK government, making it easier for the UK government to trace any proceeds of tax crime committed within its own jurisdiction.

Government-contracting fraud

Section 81A of the Criminal Code provides that it is an offence for a person to, directly or indirectly, agree to give or offer a gratification to another person or public official, or to cause a public official or another person to use his influence (real or fictitious) to obtain any work, employment contract or other benefit from a public body. It is also an offence under Section 81A for a person or public official to solicit, accept or obtain a gratification from another person for himself or another person to make use of his influence (real or fictitious) to obtain any work, employment contract or other benefit from a public body.

Section 81C also creates offences in relation to bribery for procuring contracts with public bodies, i.e. it is an offence for a person directly or indirectly to agree to give or offer a gratification to a public official in consideration of that public official giving assistance or using influence in promoting, executing or procuring a contract with a public body, in payment of the price provided for in the contract and/or obtaining an advantage under a contract for work or procurement. Similarly, Section 81C also makes it an offence for the public official to solicit, accept or obtain such a gratification in those circumstances.

Environmental crimes

Section 292 of the Criminal Code creates environmental offences where a person: (1) intentionally or negligently corrupts or fouls the water of any spring, stream, well or reservoir so as to render it less fit for the use of mankind or livestock; (2) intentionally or negligently vitiates the atmosphere in any place so as to render it noxious to the health or comfort of persons in the neighbourhood; (3) for any purposes makes loud noises or offensive smells in such place and such circumstances as to interfere with the comfort of persons in the exercise of their common rights; or (4) deposits offal or refuse at sea within 500 yards of the shore.

Campaign-finance/election law

Relevant offences are set out in the Elections Act 1994 (as amended). These cover: the conduct of the election officers; acts which are prohibited on polling day, such as: promotional party broadcasts; bribery and treating of voters; undue influence of voters; and personation. There are also offences in respect of the forgery, destruction or defacement of ballot papers, and infringement of secrecy by election officers and agents.

Market manipulation in connection with the sale of derivatives

Market manipulation is an offence under Section 91 of SIBA – see Section 1.

Money laundering or wire fraud

The British Virgin Islands has a well-developed anti-money laundering regime. The principle regulatory framework is contained in the Proceeds of Criminal Conduct Act 1997 ("PCCA") and the Drug Trafficking Offences Act 1993; however, there are a number of additional pieces of legislation that have some bearing. The primary secondary legislation in this area is the Anti-Money Laundering Regulations 2008 and the Terrorist Financing Code of Practice 2008.

The PPCA sets out the principle anti-money laundering offences in the territory, including use/possession of the proceeds of crime, concealment and tipping off.

Cybersecurity law

The Computer Misuse and Cybercrime Act 2014 details a number of offences in this area including: (i) unauthorised access to computer material; (ii) unauthorised use or interception of computer services; and (iii) unlawfully making available a device or data for the commission of an offence.

Any other crime of particular interest in your jurisdiction

There are a number of regulatory offences which are contained in the FSC Act and the FSC Regulatory Code with regard to FSC licensed entities and BVI licensees. Equally, there are a number of licensing offences contained in SIBA relevant to business crime. Under the money laundering legislation, offences including use/possession of the proceeds of crime, concealment and tipping off, exist.

3.2 Is there liability for inchoate crimes in your jurisdiction? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?

Section 316 of the Criminal Code provides that where a person intending to commit an offence begins to put his intention into execution by an act which goes towards the commission of an offence and which is not merely preparatory, but does not fulfil his intention to the extent that he does not commit that offence, is deemed to have attempted to commit an offence. It is immaterial (except in respect of sentencing) whether the offender does all that is necessary on his part to complete the commission of the offence or whether he is prevented or desists of his own motion, for an attempt to be committed.

To read this article in full, please click here.

This publication first appeared in the Global Legal Group's ICLG: Business Crime 2018, published in September 2017.

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.

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