Recent amendments to the BVI AML Regulations and AML Code of Practice (collectively “the legislations”) took effect on August 22nd, 2022, and August 29th, 2022, respectively. The primary objective of these revisions is to ensure the BVI’s compliance with the evolving international standards established by the Financial Action Task Force (FATF) and update and clarify the current application of the existing legislation.
While there were many changes, we will focus on expanding the definition of ‘relevant business’ to include virtual asset services and what this may mean for you. The amended AML Regulations provided the following meanings:
A “virtual asset” means a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes but does not include:
(a) digital representations of fiat currencies and other assets or matters specified by enactment or guidelines; or
(b) a digital record of a credit against a financial institution of fiat currency, securities or other financial assets that can be transferred digitally.
A “virtual assets service” means the business of engaging, on behalf of another person, in any VASP activity or operation (as outlined in the definition of “VASP”) and includes:
(a) hosting wallets or maintaining custody or control over another person’s virtual asset, wallet or private key;
(b) providing financial services relating to the issuance, offer or sale of a virtual asset;
(c) providing kiosks (such as automatic teller machines, bitcoin teller machines or vending machines) to facilitate virtual assets activities through electronic terminals to enable the owner or operator of the kiosk to actively facilitate the exchange of virtual assets for fiat currency or other virtual assets; or
(d) engaging in any other activity that, by enactment or guidelines, constitutes the carrying on of the business of providing virtual asset service, issuing virtual assets, or being involved in virtual asset activity.
A “VASP” (virtual asset service provider) provides, as a business, one or more of the following activities or operations for or on behalf of another person:
(a) the exchange between virtual assets and fiat currencies;
(b) the exchange between one or more forms of virtual assets;
(c) transfer of virtual assets, where the transfer relates to conducting a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another;
(d) safekeeping or administration of virtual assets or instruments enabling control over virtual assets;
(e) participation in and provision of financial services related to an issuer’s offer or sale of a virtual asset;
(f) perform such other activity or operation as may be specified by enactment.
As a relevant person, VASPs are required to comply with the AML Regime, which includes (but is not limited to):
Appointing a money laundering reporting officer (MLRO)
Establishing and maintaining a compliance manual
Complying with reporting requirements
Staff training
Complying with the travel rules for the transfer of virtual assets
The provisions related to virtual asset services have been in effect since December 1st, 2022, and it requires any person who owns or is associated (as a director, shareholder, or beneficial owner) with a BVI entity which undertakes virtual asset projects or business to comply with it.
Shall you require additional information, please do not hesitate to contact us at Contact@viss.com.hk.
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