Consultation on BVI Business Companies Act begins journey to meet FATF recommendations

Thursday, 25 April 2024
The British Virgin Islands (BVI) Financial Services Commission (FSC) has begun a consultation on further amendments to the BVI Business Companies Act, aiming to meet recommendations contained in the Financial Action Task Force's (FATF’s) recent assessment of its anti-money laundering (AML) regime.
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Several of the reforms relate to FATF Recommendation 24 concerning legal persons. These primarily concern tighter restrictions on the use of nominee shareholders and nominee directors, as well as the uniform filing of registers of members with the registrar. The FSC regards this as the most viable long-term option for reform to meet the demands of Recommendation 24. In addition to keeping a register of members, every company will also have to provide the names and addresses of nominee shareholders and their nominators, the date of cessation of a person as a nominator and the date on which a nominee shareholder ceased to be a member. Corresponding duties are created in relation to foreign companies, which must now keep a register of members, a copy of which must be filed with the registrar containing specified information.

The current regime, whereby a company opts to file its register of members for registration by the registrar is being phased out. Instead, every company will have to file a copy of its register of members with the registrar.

Other measures change the rules for collection, keeping and maintaining of certain key information, reduction in the period for appointment of first directors of incorporated companies, obligation of companies to cooperate with competent authorities in the performance of their statutory duties and ensuring that penalties provided are sufficiently dissuasive and proportionate.

A new section requires a company to collect, maintain and keep up-to-date beneficial ownership information, which should be filed with the registrar either at the time of incorporation of the company or within 14 days thereof. A similar requirement applies in relation to a company that is continued in the BVI or a foreign company, except that the permissible 14-day period does not apply.

The penalties regime is being overhauled, repealing the specific offences and penalties provisions in the Act and replacing them with a more streamlined contraventions regime. This regime will impose fixed penalties, administrative penalties and offences triable and punishable criminally. Provision is also made for late penalty payments in certain cases. Representations can be made to the registrar before any administrative penalties can be imposed. Provision has also been made to enable the FSC to require the filing of returns by companies.

Transitional provisions are being provided for existing companies and companies that have been struck off and dissolved. However, all companies that are incorporated, registered or continued after the commencement date will have to comply with the obligations of filing their register of members and beneficial ownership information as provided in the amendments.

A consultation deadline of 6 May 2024 has been set for comments.

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