The British Virgin Islands (BVI) issued revised Common Reporting Standard (CRS) Guidance Notes on February 19, 2019. Included in the revisions is a change in the definition of Controlling Person. The BVI will now use a 10% threshold for CRS reporting commencing in 2019.
Application of AML
The OECD advised that for purposes of determining Controlling Persons thresholds under CRS, a CRS jurisdiction must follow its own domestic anti-money laundering / know your customer (AML/KYC) legislation. As expected, the BVI adapted its CRS law to conform with its AML law. [See my blog August 17, 2018: CRS: Bahamas Changes Controlling Person Threshold – Who Is Next?].
The BVI will now use a 10% threshold for a controlling ownership interest of a legal person not 25%.
The BVI reminded Financial Institutions (FIs) that documentary evidence must be accurate and the FIs have a duty to confirm the reasonableness of self-certifications. The FIs must validate the self-certifications against any account holder documentation collected pursuant to the BVI AML law.
If the self-certification cannot be validated the self-certification must not be relied upon and a new self-certificate must be obtained. As part of the validation process, it is necessary for an FI to determine if it has sufficient information to determine any 10% Controlling Persons.
The BVI issued new self-certification forms which may be used as is or modified to suit the needs of a BVI FI. If a BVI FI has not collected and validated 10% Controlling Persons through its AML process, it should solicit new BVI self-certs from its Passive Non-Financial Entity (NFE) account holders.
Individual BVI self-cert: http://www.bvi.gov.vg/sites/default/files/individual_self_certification_form_final.pdf
Entity BVI self-cert: http://www.bvi.gov.vg/aeoi-crs (Link is midway down page.)
[See my blog March 2, 2017: CRS: What Does Controlling Person Mean for the Unsuspecting Executive?].
As part of the changes to BVI CRS law, BVI FIs must establish, implement and maintain written policies and procedures. BVI FIs must have policies and procedures in place by March 31, 2019.
Check your AML documentation to determine if you are able to identify 10% Controlling Persons.
Solicit new self-certifications from Passive NFEs that have not identified 10% Controlling Persons.
Train staff to ensure they are capturing 10% Controlling Persons when onboarding new account holders.
And finally, your long past-due assignment: draft policies and procedures! not 25%.