The 40-year anniversary of the BVI Business Companies Act is an important legislative milestone for both the BVI and its financial services sector. Not only did it usher in a wave of innovation, it was a catalyst for establishing a whole new financial ecosystem in the BVI. And for the last twenty years, since its foundation, the Financial Investigation Agency (FIA) has played a critical role in this ecosystem, safeguarding our financial services sector - a cornerstone of the Territory’s economy.
MATCHING THE DEMAND OF AN EVOLVING FINANCIAL SERVICES SECTOR
Over the years, to match the expansion and evolution of the financial services sector that have followed the IBC Act, the Agency has seen tremendous growth and change - both from a human as well as technological perspective. The FIA grew from a team of three when it first started to its current complement of 32, and this is set to increase further next year given the increase in demands on the Agency’s resources. We’ve also witnessed the core functions of the FIA evolve. For example, when the FIA came about it 2004, no one had in mind that it would be given a supervisory mandate to supervise Designated Non-Financial Business and Non-Profit Organisations sector. Neither did anyone envision fintech becoming so imbedded in the local financial services sector; we now have several BVIBCs being associated with various virtual assets trading platforms providing virtual assets related services to millions across the entire globe. This evolution has result in the FIA having to invest heavily in staff training and development, as well as investing in sophisticated investigative tools to enable it to do its work.
EMPOWERED BY LEGISLATIVE CHANGE
We have also seen the development and evolution of legislation to strengthen the Agency’s role.
For example, in 2021, Financial Investigation Agency Act – the principal legislation which guides the Agency’s operations - was amended to give the FIA supervisory powers over Designated Non-Financial Businesses and Professions (DNFBPs) for antimoney laundering, counter the financing of terrorism (CFT) and proliferation financing (PF). The amendment also empowered the FIA to impose administrative fines for regulatory breaches. Following this, the Agency has significantly increased the volume of fines imposed over the last two years against regulated entities for their failure to response to our requests for information within the statutory timeframe. Our preference has and will always be for regulated and supervised entities to comply with the laws but the FIA will continue to take the steps to ensure regulated and supervised entities fulfil their AML/CFT/PF obligations.
Steps have also been taken to strengthen the Agency’s collaboration with the FSC resulting in several initiatives being undertaken jointly, all of which had national implications. For example, the 2020 Territory Financing Risk Assessment, the 2022 Money Laundering Risk Assessment and 2022 Proliferation Financing Risk Assessment. All of these assessments would have highlighted the risks posed to the local financial services sector by legal persons and arrangements, including BVIBCs.
GLOBAL IMPACT AND BEST PRACTICE
Over the last 20 years, the FIA has played an increasingly important role in the global financial system too. We both contribute to combating financial crime, and ensure we are adhering to global standards.
One of the FIA’s main functions is to assist foreign law enforcement agencies through enforcement of international cooperation frameworks such as the Egmont Group of Financial International Units. Frameworks such as this allows the FIA to exchange vital information, including beneficial ownership and other similar types of information involving corporate structures. This happens in instances where such matters are brought to the FIA’s attention through suspicious activity reports or other avenues. Through a series of agreements, we have also strengthened our collaboration and reciprocal information sharing with domestic as well as international agencies to counter financial crime.
Our workload has rapidly grown as a result. To give an example, back in 2003 the Agency dealt with very few requests for information on BVIBCs. Now we easily average over 300 requests for information on BVIBCs annually.
We are constantly reviewing and upgrading our standard operating procedures to ensure our international cooperation framework is in line with global standards.. The work of organisations, such as CFATF, is extremely important since it feeds into the FIA’s internal processes and procedures to ensure compliance with global AML/ CFT standards.
TECHNOLOGY AND THE DEMANDS OF THE FUTURE
As we look ahead, the FIA will continue to evolve as it has for the last two decades. This is the only way it will be able to achieve and maintain effectiveness. Just as the type and scope of financial crime will continue to evolve over the coming decades, so will the global AML/CFT/PF standards.
Technology is clearly a driver of change too. Using virtual assets businesses as an example, the FIA invested heavily over the years in investigative tools to assist in analysing complex data relative to virtual assets suspicious activity reports. Hence, it was and still is necessary for the FIA to have the right technology or innovative products at its disposal to deal with these very complex matters. As things change, the FIA will need to continue to adapt by incorporating the use of innovative products into its day-to-day operations. For example, we are now exploring ways to automate some of our analysis functions by using AI which could have tremendous benefits for the Agency such as increased efficiency and improved productivity.