Industry Circular 45 of 2025 - FSC highlights risks associated with the misuse of BVI Business Companies

THE FSC HIGHLIGHTS RISKS ASSOCIATED WITH THE MISUSE OF BVI BUSINESS COMPANIES

Road Town, Tortola - The BVI Financial Services Commission (the Commission) today published a two-part informational video outlining key Money Laundering, Terrorist Financing, and Proliferation Financing (ML/TF/PF) risks associated with BVIBCs and how BVIBCs may be misused for ML,TF and PF purposes as identified in the Virgin Islands' 2025 Legal Persons and Legal Arrangements Risk Assessment.

The first video highlights, in particular:

• Money laundering risks arising from complex corporate structures, global operations, third-party introducers, and the involvement of politically exposed persons;
• Terrorist financing risks linked to BVIBCs operating as non-profit organisations or engaging in virtual asset activities

The second video focuses on:

• Proliferation financing risks, including sanctions evasion and the trade in prohibited or dual-use goods.

In the videos, financial institutions (FIs) and Designated Non-Financial Businesses and Professionals (DNFBPs) are also reminded of the importance of maintaining strong internal systems and controls, including:

• Applying a risk-based approach to customer due diligence and ongoing monitoring;
• Maintaining accurate beneficial ownership information;
• Monitoring for unusual or complex transactions; and
• Submitting timely, high-quality suspicious activity reports.

The videos also touch on recent regulatory measures aimed at strengthening the Virgin Islands' framework for mitigating ML/TF/PF risks. These include the filing of beneficial ownership information with the Registrar of Companies, the registration of Virtual Asset Service Providers, the issuance of sector-specific guidance, and enhanced risk-based supervision of the higher-risk TCSP, Investment Business and VASP sectors.

The Commission encourages all FIs and DNFBPs to review these informational videos, which can be found below, incorporate the contents into their AML/CFT/CPF training programmes, and ensure that staff are made aware of and understand the contents. FIs and DNFBPs should also familiarise themselves with the 2025 ML/LA Risk Assessment report and ensure continued compliance with their AML/CFT/CPF obligations as part of the Territory's ongoing effort to safeguard the integrity and reputation of the Virgin Islands' financial system

Queries related to this Circular should be directed to [email protected]