IFC: What have been the biggest achievements of the BVI Financial Services Commission since its establishment 20 years ago?
KB: The BVI Financial Services Commission’s most significant achievement is its successful transition into an independent regulatory body that has developed and implemented regimes for the effective regulation of financial services business in and from within the BVI. In addition, and with the cooperation of other key stakeholders of the Government, the BVI’s level of compliance with international standards, as demonstrated in reports of reviews and assessments conducted by standard-setting bodies such as the IMF and CFATF, has also been a tremendous achievement over the years.
Some other key achievements of the Commission include:
IFC: What strategies does the Commission employ to combat money laundering and the financing of terrorism?
KB: In combatting money laundering and terrorism financing, the Commission has implemented an AML/CFT strategy geared towards the protection of the financial services industry and the advancement of the BVI as a secure and well-regulated international financial centre. The Commission’s strategy focuses on meeting defined objectives in four key strategic areas of Supervision, Enforcement, Promotion of Cooperation and Stakeholder Awareness and Outreach. In utilising this strategy, the Commission, along with relevant stakeholders such as industry participants, competent authorities, government representatives and government departments with a nexus to AML/CFT are engaged and can work cohesively to ensure that an effective framework that considers all the relevant ML/TF risks to the BVI is appropriately implemented.
IFC: Do you feel that offshore IFCs such as the BVI come under unequal levels of regulatory investigation compared to their onshore counterparts?
KB: As a reputable international finance centre, there is an expectation that the BVI will be scrutinised. However, the Commission consistently demonstrates its ability to comply with international standards, which provide a framework for a level playing field globally that requires all jurisdictions to demonstrate their level of compliance.
IFC: To what extent are current regulatory pressures from the EU and OECD affecting the BVI’s ability to innovate and respond to client demands?
KB: The presence of regulatory pressures from international bodies and standard setters is a continuing reality for any financial regulator. As the financial services landscape continues to evolve, the Commission’s approach of engagement with relevant stakeholders aids the jurisdiction’s development of new and emerging products and services in a manner that falls in line with standards requirements. Innovation is at the heart of financial services in the BVI. As the sole regulator of financial services in the jurisdiction, the Commission’s ability to innovate is critical to our success and it has not been slowed by regulatory scrutiny from the EU and OECD.
IFC: The recent Pandora Papers leak has attracted a great deal of negative media attention, when in fact, the BVI entities mentioned in the data are fully legal and compliant. What are your thoughts on the leak and do you see it having an impact on the BVI in any way?
KB: The Commission has developed a financial services framework aimed at preventing criminals from utilising BVI products and services for nefarious activities. Through the regulatory regime and engagement with the financial services sector, the BVI continues to employ mechanisms that ensure compliance with international standards and validate the BVI’s position as a reputable international finance centre. The Commission does not condone the use of BVI entities for illegal purposes. The establishment of BVI entities is subject to the highest levels of scrutiny, vigilance and accountability through the BVI’s regulatory regime, therefore ensuring that BVI entities are established for legitimate purposes. The Commission’s use of supervisory and enforcement powers compel adherence to the BVI’s regulatory standards. The Commission welcomes any opportunity to foster a better understanding of what it does as the regulator of all financial services activities conducted in and from within the BVI.
IFC: As a British Overseas Territory, how has the BVI’s financial services sector been affected following the end of the Brexit transition period; and how does the BVI plan to maintain a relationship with the EU?
KB: The BVI’s aim is always to ensure the operation of its financial services sector in conformity with the requirements of all international standards are continuously met. This would include maintaining a relationship that allows for cordial dialogue on issues of concern to gain a common understanding of the BVI’s financial services activities and the EU’s requirements to achieve cooperation.
IFC: The BVI continues to foster FinTech innovation through the recent introduction of a regulatory sandbox. Does the Commission have any further plans to regulate this sector and provide support for new companies?
KB: Entities that have successfully tested the regulatory sandbox will be allowed to become licensed by the Commission. The Commission will aid in transitioning such entities to meet requirements for licensing. In addition, the Commission plans to bring legislation on stream to supervise Virtual Assets Service Providers and ensure operation in accordance with international standards.
IFC: Where can we expect the Commission to focus its efforts in 2022?
KB: During 2022, the Commission intends to:
IFC: Do you have anything else you would like to add?
KB: The Commission continues to be robust in implementing its regulatory and supervisory regimes while balancing the importance of flexible business transactions and the need for cooperation to keep financial crime at bay and deny a haven to persons otherwise bent on abusing the legitimate structures of business.
Mr. Kenneth Baker
Chief Executive Officer and Managing Director