Regulators have warned Virgin Islands firms to prepare for major changes in British sanctions systems.

In the past, the territory has received praise for its work to enforce international sanctions, including the many linked to the Russian invasion of Ukraine in 2022.

In hopes of continuing this strong record, the Financial Services Commission has advised VI companies to be aware of a shake-up in the way Britain organises and announces its sanctions regime.

As of January 28, the Foreign, Commonwealth and Development Office took over various lists of those under sanction to become responsible for producing one authoritative, constantly updated dossier, according to the FSC.

“The shift to a singular list streamlines sanctions information, simplifies access to sanctions data and reduces screening and duplication of compliance work caused by maintaining separate sanctions lists,” the FSC said in a statement.

The system will boost effectiveness, according to the watchdog. “It will also strengthen consistency in sanctions screening and enhance the ability of persons to more effectively meet international standards,” the statement noted.

Updating procedures

VI companies were urged to update their procedures to comply with the new system.

“Financial institutions, designated non-financial businesses and professions, and non-profit organisations should take proactive steps to review and update internal policies and procedures to ensure compliance with the UK Sanctions List,” the FSC stated.

“Reporting systems should be updated to reflect the new identifier for UK sanctions targets.”

The watchdog added that screening of clients is essential.

“A key requirement is to ensure that effective systems and controls are in place to screen customers, including beneficial owners and directors, against the UK Sanctions List, both at the start of a business relationship and on an ongoing basis whenever updates to the sanctions list occur and according to the risk profile of existing customers and businesses,” the FSC stated.

VI praise

The territory’s recent work toward imposing financial sanctions during the Ukraine war drew praise in the official communiqué of last year’s Joint Ministerial Council, the annual summit of the UK government and British overseas territories in London in November.

“We recognise the efforts of the British Virgin Islands to strengthen their sanctions capability, including through the Virgin Islands Sanctions Unit,” the communiqué stated.