The BVI's response to the UK government's call to the Overseas Territories for greater transparency in beneficial ownership has been incorporated in recent changes to BVI legislation. These are designed to achieve compliance with the Financial Action Task Force's Forty Recommendations and are intended to ensure that the identity of the ultimate beneficial owners of BVI companies can be provided to the BVI regulator and other competent authorities in the BVI upon request. Most of these changes came into force on 1 January 2016.
First, there have been amendments to the BVI Business Companies Act, 2004 ('BCA') which provide for the filing for registration by the Registrar of Corporate Affairs ('Registrar') of copies of a company's register of members and register of directors. Under the previous s.231 BCA, filing of both the register of members and the register of directors was optional. That section has now been repealed. Under the new s.43A BCA, the filing of the register of members is optional. A company may elect to file, but if there are any changes to its members, it must file an amended register. It may later elect to cease filing its register of members and can subsequently elect to file again. If it elects to file again, it must file all changes that occurred during the period when it was not filing its register of members.
Filing of the register of directors is mandatory; under s.118B BCA, coming into force on 1 April 2016, a company is required to file for registration by the Registrar copies of its register of directors. If there are any changes to the register of directors, the company must file an amended register within 30 days of the change. The register of directors as filed is not a public document. It can only be made available pursuant to a Court order, or on the written request of a competent authority acting in the exercise of its powers as a regulator of financial services business, tax administrator or law enforcement agency, or pursuant to the competent authority's obligations to a mutual legal assistance request received or made or to be made by it. The only other people who can access the filed register of directors are the company, its registered agent and/or any other person authorised in writing by the company.
In addition, the new s.98 BCA now imposes an explicit obligation on the registered agent of a company, upon request from the Financial Services Commission ('FSC') or other competent authority in the BVI, to request and obtain the records and underlying documentation from the company; failure to comply is an offence, which carries a fine of $50,000.
There is a transition period until 31 March 2017 for all existing companies to comply with the requirements of s.118B. A company can request an extension of up to 6 months if it has taken steps to comply and the delay in complying is due to its registered agent's inability to file its register of directors because of the large number of filings that it has to undertake or for some other good reason acceptable to the Registrar. Failure to comply with the deadline or any extension granted results in a penalty being payable.
Secondly, there have been important changes to the Anti-money Laundering and Terrorist Financing Code of Practice, 2008 and the Anti-money Laundering Regulations, 2008, which impact the eligible introducer regime. The general rule is that a BVI registered agent is responsible for obtaining and keeping the beneficial ownership information for BVI companies. Under the eligible introducer regime, a BVI registered agent relies on a third party to obtain, verify and keep records of the identity of a client. Under the new changes, beneficial ownership information is to be held and kept up to date by registered agents, while eligible introducers may continue to hold detailed customer due diligence materials.
There is an exemption from verification of identity where the registered agent is satisfied that the introducer (or third party, as they are now known) has a business relationship with the customer and has taken steps to comply with BVI Anti-money Laundering laws or their equivalent in the third party's jurisdiction. The third party must have a system for monitoring any change in the level of risk of the customer (it must assess the customer and assign a risk-rating) and must review and update customer due diligence every 4 years for a low-risk customer and every year for a high-risk customer. This arrangement hinges on there being a written agreement between the registered agent and the third party, which must contain an undertaking on the part of the third party to provide copies of all identification data and documentation whenever required by the BVI Financial Investigation Agency, the FSC or other competent authority in the BVI. The information must be provided without any delay and, in any case, within a period of forty-eight hours, but not exceeding seventy-two hours (calculated from the time of dispatch of the request). But from 1 January 2018, a request must be responded to within 24 hours.
Even though the BVI has made various changes to its companies' legislation and anti-money laundering provisions, the details of directors and shareholders (past, present and future) of BVI companies will not become publically available as a result of those changes. In the light of the recent requirement in the UK for UK companies to keep a 'Register of People with Significant Control', the BVI remains a desirable jurisdiction for the incorporation of companies.
 The Financial Action Task Force ('FATF')
Recommendations set out an international standard of comprehensive
and consistent framework of measures which countries should
implement in order to combat money laundering and terrorist
financing, as well as the financing of proliferation of weapons of
mass destruction. – see www.fatf-gafi.org
 'competent authority' for the purposes of s118B of the BCA, means a competent authority or central authority so designated, recognised or appointed under an enactment – s118B(10)(b)(i) BCA.
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.