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The Anti Money Laundering Code of Practice, 1999 [the Code] outlines the identification procedures relevant in relation to introduced persons. It provides1 that where an applicant for business is introduced to a relevant person2 by a third party referred to as the Introducer, the relevant person must establish and maintain identification procedures which as soon as reasonably practicable after the introduction require the production by the Introducer of satisfactory evidence of the identity of the applicant or the taking of measures as will produce satisfactory evidence of the identity of the applicant.

The requirement stipulated above does not apply where there are reasonable grounds for believing that the Introducer is3 :

  1. A regulated person4; or
  2. An authorised financial institution in a country or territory which is a member of the FATF or CFATF and which has anti-money laundering laws and procedures that are at least equivalent to those of the BVI; or
  3. An attorney-at Law or an accountant where the relevant person is satisfied that the rules of the applicant’s professional body embody requirements equivalent to the Code; or
  4. The relevant person and the applicant for business are bodies corporate in the same group. The term “group” in relation to a body corporate means that body corporate, any other body corporate which its holding company or subsidiary and any other body corporate which is a subsidiary of that holding company and “subsidiary: and “holding company” are to be construed in accordance with section 2 (2) of the Banks and Trust Companies Act.

The relevant person is also not required to obtain verification of the identity of the applicant from the Introducer after introduction if there are reasonable grounds for believing that:

  1. The Introducer acts in the course of a business in relation to which a regulatory authority outside the Territory exercises regulatory functions; and
  2. The Introducer is based or incorporated in or formed under the law of a country or territory outside the territory which is a member of the FATF or CFATF and in which there are in force anti-money laundering laws and procedures that are at least equivalent to those of the BVI; and
  3. The Introducer will comply with terms of business made in accordance with the Code.5

The written terms of business6 referred to above places an obligation on the Introducer:

  1. To verify the identity of all applicants for business introduced to the relevant person sufficiently to comply with the requirements of the Act, any Regulations made thereunder and the Code.
  2. To maintain a record of the evidence of verification of identity and records of all transactions for at least five years from the date
    1. when all activities relating to a one off transaction7 or a series of linked transactions were completed;
    2. when the business relationship was formally ended; or
    3. where the business relationship was not formally ended when the last transaction was carried out.
  3. To supply to the relevant person forthwith upon request evidence of the verification of identity in any particular case; and
  4. To inform the relevant person specifically of each case where the Introducer is not required or has been unable to verify the identity of the applicant.

Please note that the Code stipulates that procedures comply with the forgoing if they require that when satisfactory evidence of identity is not obtained or produced the business relationship and transactions shall not proceed any further.

The Anti-Money Laundering Guidance Notes [the Guidance Notes] provide that regulated financial institutions in the countries and territories listed below are recognized and may be treated as institutions which adhere to a standard of anti-money laundering regime which is at least equivalent to that of the BVI.

Aruba Austrailia Barbados
Bermuda Belgium Canada
Cayman Islands Denmark Finland
France Germany Gibraltar
Greece Guernsey Hong Kong
Iceland Ireland Isle of Man
Italy Japan Jersey
Luxembourg Netherlands & Netherland Antilles New Zealand
Norway Portugal Singapore
Spain Sweden Switzerland
United Kingdom United States

1 Section 6(1)

2 A relevant person is a person carrying on banking business or trust business; insurance business; company management business; business of a mutual fund or providing services as a manager or administrator of a mutual fund; any activity involving the remittance of telegraph money order; any activity involving money transmission services or cheque encashment facilities; any activity in which money belonging to a client is held or managed by an attorney; an accountant or a person who in the course of business provides accountancy services; the business of acting as company secretary of bodies corporate.

3 Section 6(2)

4 A regulated person means any person carrying on the type of business referred to in footnote 2.

5 Section 6(3)

6 Section 6(6)

7 “One off transaction” means the transaction other than a transaction carried out in the course of an established business relationship formed by a relevant person.