As part of efforts to avoid international sanction, the House of Assembly last week passed five financial-services bills introduced by Deputy Premier Lorna Smith, left, and one introduced by Premier Dr. Natalio “Sowande” Wheatley, right. (Screenshots: HOA)

Six bills intended to combat money crime and terrorism financing were rushed through the House of Assembly last week in a bid to avoid international sanction.

Deputy Premier Lorna Smith said the measures, which were all passed on Sept. 4 and now await the governor’s assent, are “crucial” to bringing the territory in line with global standards.

“Strengthening our regulatory framework sends a clear message to the world that the BVI is committed to upholding the highest standards of transparency and integrity,” Ms. Smith told the HOA shortly before the bills passed.

The reform drive is part of the government’s bid to keep the territory off the so-called “grey list” of countries that require increased monitoring from the Paris-Based Financial Action Task Force. The threat arose in the wake of a scathing review by the FATF’s Caribbean branch regarding the territory’s performance in battling dirty money.

A February Mutual Evaluation Report by the Caribbean Financial Action Task Force found that the VI was doing badly in seven of 11 key areas it probed.

This assessment compared unfavourably with earlier reports about rival financial hubs such as the Cayman Islands, which was found lacking in five of the areas in its last review in 2019, and Bermuda, which was found wanting in just one field in 2020.

‘Reputable finance centre’

The six bills passed last week were designed to address several of the CFATF’s recommendations for reform, according to Ms. Smith, who is also the financial services minister.

“It is crucial to maintain the BVI’s standing as a reputable finance centre, and failure to address the Mutual Evaluation Report recommendations could lead to reputational damage and potential sanction,” she said.

Among the legislation the HOA passed was the Trustee (Amendment) Bill 2024, which brings in fines of $75,000 for entities that fail to keep an up-to-date record of beneficial owners, the deputy premier said.

“The amendments are crucial in fortifying the territory’s anti-money-laundering and countering-the-financing-of-terrorism regime, particularly in the trusts sector,” Ms. Smith said of the bill.

Also passed was the Banks and Trust Companies (Amendment) Bill 2024, which tweaked an act that Ms. Smith branded a “cornerstone” of the legislative regime governing the territory’s financial sector. These changes, she explained, did not amount to a “radical overhaul” of the act, but rather added “targeted enhancements” such as amending the definition of “trust business.”

Other additions, such as requiring new banking licence applications to provide proof of insurance in a specified timeframe, were designed to “safeguard” customers, she added.

Also passed Sept. 4 were the BVI Business Companies (Amendment) Bill 2024, the Insolvency (Amendment) Bill 2024, and the Insurance (Amendment) Bill 2004.

‘Significant inadequacies’

Besides the five bills introduced by Ms. Smith, the HOA also passed the Proliferation Financing (Prohibition) (Amendment) Bill 2024, which was introduced by Premier Dr. Natalio “Sowande” Wheatley.

Dr. Wheatley said the bill is of “critical importance” as it addresses the “significant inadequacies” within the VI’s current legislative framework.

“The bill reclassifies the liability for dealing with assets owned, controlled or held by or on behalf of designated persons or entities as a strict liability offence,” he said. “This means that any engagement with such assets will constitute an offence regardless of the intent or knowledge of the individual or entity involved.”

The premier added that the bill would aid watchdog agencies in the territory.

“The bill eliminates the current financial threshold of $10,000 for the mandatory reporting of financial transactions involving designated persons or entities,” he told the HOA.

This move, he added, is in line with international guidance.

“These measures are crucial for maintaining the integrity and reputation of our financial sector on the global stage,” he said.

Opposition Leader Ronnie Skelton, however, questioned whether abolishing the $10,000 minimum threshold was going “too far” as people would be obligated to report suspicions of wrongdoing involving as little as $1.

“The bill seeks to put all monies under suspicion,” he said. “Are we not taking it a bit far?”

‘Strategic imperative’

The six bills passed unanimously on the same day.

Ms. Smith told HOA members that the reforms were not just a “compliance exercise” but a “strategic imperative.”

“It is a demonstration of the territory’s resolve to uphold international standards and maintain its reputation as a leading financial centre,” she said.