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Virgin Islands (British) seeks to Strengthen Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) Laws

On February 3rd, 2021, the Cabinet of the VI considered several pieces of legislation targeted at strengthening its national AML and CFT framework. The Cabinet considered the Bill entitled “Criminal Code (Amendment) Act, 2021”, which sought to amend the Criminal Code Act, 1997 to criminalise tax crimes as a predicate offence for money laundering (ML). The amendment aims to achieve technical compliance with FATF’s Recommendation 3, which focuses on the money laundering offence and predicate offences.

The Cabinet is further seeking to give remit to the Financial Investigation Agency (FIA) to take action against persons and activities that may be related to terrorist financing (TF) and ML through a Bill entitled the “Proliferation Financing (Prohibition) Act 2021”. The Proliferation Financing (Prohibition) Act 2021 seeks to repeal and replace the Proliferation Financing (Prohibition) Act, 2009 in order to meet the requirements of Recommendation 7, targeted financial sanctions related to proliferation.

Regarding its CFT efforts, the Cabinet has put forward a Bill entitled “Counter-Terrorism Act, 2021”. This law is intended to be used as a means of strengthening the current CFT legislative regime in a manner that satisfies the requirements of the FATF standards. Additionally, a Bill entitled “Criminal Justice (International Cooperation) (Amendment) Act 2021” was brought forward for discussion. The Bill facilitates the VI’s cooperation with other countries in criminal proceedings and investigations. Cabinet indicated that the first readings of each Bill will occur at the next convenient sitting.

Financial Investigation Division (FID) focus on Assets after Investigation into Lottery Scam

In December 2020, 35-year-old Jamaican national, Mr. Algrando Stewart, pleaded guilty to Possession of Identity Information and breaches of Jamaica’s Law Reform Act, which falls under schedule 2 offences of the Jamaica’s Proceeds of Crime Act. Property and cash have been forfeited and the accused has been ordered to compensate J$13 million to the Crown.

On August 26th, 2016, police officers from the St. James Proactive Investigation Unit conducted a search at Mr. Stewart’s residence and discovered a cellular phone that contained lottery scamming material. Cash in the amount of US$6,230 and J$116,000 was also uncovered. Mr. Stewart was subsequently arrested and charged under the Proceeds of Crime Act and the Law Reform Act. Schedule 2 offences of the Law Reform Act signifies that the convicted party leads a criminal lifestyle; it empowers the court to make assumptions that properties owned by, or transferred to, the guilty party came about as a result of their criminal lifestyle. It also allows the court to assume that his living expenses (utilities, groceries, and so on) were financed by the proceeds of crime, unless proven otherwise by Mr. Stewart.

The FID conducted a money laundering and asset forfeiture investigation based on a report of the case from the police. During the investigation, it was found that Mr. Stewart received millions in remittances from several persons in the United States, most of whom were elderly.  It was also revealed that Mr. Stewart acquired several assets using funds which were not commensurate to his known income as a carpenter. Mr. Stewart received over J$20million in remittances and millions more via intermediaries, which he partially used to purchase two residential lots in Trelawny valued at over J$7million. Additionally, he bought three motor vehicles valuing approximately J$8million over a four-month period. and possessed bank accounts with US$9,800 and J$2.9million.

The United States Postal Inspection Service (USPIS) was contacted and was provided with the names of the persons who remitted funds to Mr. Stewart. However, the USPIS was unable to obtain statements from the victims as many of them were in very poor health, lost their cognitive abilities or were deceased.

Mr. Stewart consented to forfeiture regarding residential lots located in Trelawny, valued at over J$7million and forfeiture of US$6,230 and J$116,000. He was also ordered to pay J$12million to the Crown; with J$3million to be paid within a month and the balance a 24-month period. In relation to the offence of Possession of Identity Information, he was further ordered to pay a fine of J$1 million or 12 months’ imprisonment, as well as 2 years’ imprisonment hard labour, suspended for 3 years.

Acting Principal Director of the FID, Mr. Keith Darien noted, “This case is still a big win for the Division despite the fact that not every part of the estate he would have acquired by his criminal activity was forfeited by his consent. The usual court proceedings around forfeiture can be extremely time consuming and resource intensive. Essentially, his guilty plea and consent to forfeiture, saved the court system quite a bit of time. Many of these cases can drag on for years with no guarantee that every asset the convict would have earned criminally would be forfeited to the crown.”

He added, “We are thankful to the police who sought our partnership in pursuing this matter and encourage them to continue in a similar vein when they recognize that a charge laid for one offence may include a financial crime.” He went on to state that the case served as a warning to criminals that Jamaican law enforcement authorities are capable of uncovering activities related to concealing or investing the proceeds of crime. He advised citizens to resist efforts to share or benefit from the proceeds of crime.

RF Holdings to accept Digital Currency across Regional Network

RF Holdings Limited has entered into partnership with financial technology company, Bitt to facilitate the acceptance of digital currency transactions across its Caribbean network.

The partnership, which focuses on developing a platform based on Bitt's digital currency infrastructure, will allow for digital currencies, such as 'Sand Dollar' in The Bahamas, 'mMoney' in Barbados, and the Eastern Caribbean Central Bank's 'DCash', to be accepted and accessed across the investment banks’ products by a wider network of Caribbean clients. Digital currency is a form of currency that is available only in digital or electronic form, and not in physical form. It is also called digital money, electronic money, electronic currency, or cyber cash.

RF Holdings Limited, which is the parent company to a group of investment banks in The Bahamas, Barbados, and the Cayman Islands, indicated that this latest venture is expected to assist in providing added convenience to clients of the investment bank, and tocreate a more efficient business model. The platform will be able to facilitate payments from and between banks, individual consumers, and merchants.

Read the full article here: http://www.jamaicaobserver.com/business-observer/rf-holdings-to-accept-digital-currency-across-regional-network_212020?profile=42

The British Virgin Islands publishes its Money Laundering Risk Assessment Report 2020

The British Virgin Islands Financial Services Commission (BVIFSC) has published its “Money Laundering Risk Assessment 2020” report on December 10th, 2020. The report presents the findings of sectoral assessments for the period 2015 to 2019 and is a follow-up to the country’s 2016 National Risk Assessment report. Subsequent to the 2016 report, a “Progress Report on the Implementation of the Recommendations from the National Risk Assessment” was also published in 2017 by the Ministry of Finance. The BVI conducted its first national anti-money laundering/ counter terrorist financing (AML/CFT) risk assessment in 2014.

The Acting Managing Director of the BVIFSC, Ms. Jennifer Potter-Questelles noted that the 2020 report “critically reviewed the ML risks posed by each of the sectors under our supervisory remit, against the backdrop of the ML threats to which the Virgin Islands is exposed”. She further explained that the assessment enhanced the ability of regulated entities to identify specific ML risks within their respective sectors. Consequently, the BVIFSC and entities under their purview can employ appropriate measures to effectively mitigate and manage these and other emerging risks.

The full report can be read here.


The Bahamas passes Bill in the House of Assembly to Criminalize Financial Schemes

The Financial and Corporate Service Providers (FCSP) Bill 2020 was passed in the House of Assembly of the Bahamas on November 4th, 2020. The Deputy Prime Minister of The Bahamas, the Honourable K. Peter Turnquest stated that that the Bill has defined certain financial schemes as illegal. He explained that “these may take the form of pyramid schemes, Ponzi schemes and advance-fee schemes, among others, and many of them have plagued unsuspecting Bahamians for generations. Further, these schemes are fundamentally detrimental to investors and the public. The Bill criminalizes the promotion or marketing of these financial schemes and empowers the Securities Commission to dissolve them where circumstances so warrant. It also empowers the Commission to investigate and enforce against persons engaged in financial schemes.”

 Deputy Prime Minister Turnquest stated that the FCSP Bill is designed to give the Securities Commission oversight of non-bank financial services and corporate services to protect these from improper use and abuse. The Bill also makes specific provisions that empower the Securities Commission to take administrative and other actions to protect public interests. Additionally, he pronounced that the Financial and Corporate Service Providers Regulations, 2020 which has been drafted to support The FCSP Bill, expands on some of the standards that must be maintained by licensees.

 The proposed Regulations will place a duty on licensees to uphold the highest standards of professional conduct. Deputy Prime Minister Turnquest noted the protection of clients’ personal data in keeping with the Data Protection (Privacy of Personal Information) Act as well as measures to address the collection, storage and prevention of the unauthorized access to personal data are among the issues that the Regulations will focus on.

 The Honourable Deputy Prime Minister further elaborated that in order to protect the financial industry and the reputation of The Bahamas from the threat of money laundering (ML) and terrorism financing (TF), the FCSP Bill also requires licensees to comply with the Financial Transactions Reporting Act, 2018 and the Anti-Terrorism Act, 2018. Moreover, it will be necessary for licensees to possess sufficient financial resources, be solvent and obtain adequate insurance coverage suitable for their business operations. “These all work to protect investors, both by increasing the likelihood that operators are financially prepared for the activities they will engage in and may add some protective measures for aggrieved consumers” he added.