Transcript Slide 1

Analysis of the Thematic Inspections on
Introduced Business and Beneficial
Ownership Information
April 28th, 2015
Presented by
Kimberly Copaceanu & Natoya Frett
Policy Research & Statistics Division
Objective of Thematic Inspections
• The Compliance Inspections Unit was asked to assess the
level of compliance of BVI regulated persons in collecting
and maintaining beneficial ownership information and the
level of reliance on introduced business.
Participants in Thematic Inspection
• Forty-nine (49) thematic inspections were carried out by the
Compliance Inspection Unit (CIU) from July 2014 to December
2014 on beneficial ownership and introduced business,
primarily on Class I Trust, Class II Trust, Class III Trust and
Company Management licensees.
• The CIU deployed 2-4 regulators for each inspection according
to the size of the licensee. The compliance inspection lasted
approximately three (3) days.
Areas Reviewed
Licensees were assessed and rated on the following areas:
a) Introduced Business
b) Requirements of CDD
c) Requirements to update CDD
d) Requirements of ECDD
e) Requirements of Certified Documents
f) Records, Record Keeping and Retrieval
Compliance Ratings
• The areas assessed were assigned a rating of
– Non-Compliant
– Partially Compliant
– Largely Compliant
– Compliant
• This is in line with FATF rating system.
Demographics
Type of Licensee
# of
Total # of
Thematic
Inspections
Inspections
in 2014
in 2014
% of
Inspected
Licensees in
2014
Selected for
Thematic
Review
Total # of
Licensees
as at 4Q
2014
% of All
Licensees
Selected for
Thematic
Review in
2014
Class I Trust
37
48
77.08%
69
53.62%
Class II Trust
1
1
100.00%
31
3.22%
Class III Trust
6
7
85.71%
14
42.85%
Company Management
5
8
62.50%
21
23.80%
Total
49
64
76.56%
135
36.30%
Lines of Business
Yacht Registrations
1
Secretarial Services
1
Private Fund
1
Private Trust Companies
1
Asset Management
1
Prepare Financial Statements
1
Authorised Custodian Services
1
Nominee Director Services
20
Registered Agent/Office Services
No. of licensees
2
Shareholder Services
24
Director Services
12
Post Incorporations
46
BC Incorporations
46
Trust
30
0
10
20
30
40
50
Percentage of Introduced Business
Type of Licensee
Companies
under
Management
Active
Inactive
Trust
Class I
518,192
256,323
261,869
1,533
% of
Business
Derived
from
Introduced
Business
53.93%
Class II
-
-
-
13
-
Class III
23,863
16,894
6969
N/A
48.52%
Company
Management
2,326
1,760
566
N/A
45.4%
Percentage of Introduced Business (Cont’d)
% of
Business
Derived
from
Introduced
Business
0-20
21-40
41-60
61-80
81-100
Total
Class I
Class II
Class III
Company
Management
Total
9
6
4
5
13
37
1
0
0
0
0
1
2
1
0
2
1
6
1
1
2
0
1
5
13
8
6
7
15
49
“Eligible” Introducers
Type of
Licensee
Class I
Class II
Class III
Company
Management
Total
# of
Introducers
#of
Introducers
Reviewed
# of Eligible
Introducers
7141
N/A
791
207
N/A
24
142
N/A
14
# of
Introducers
that did NOT
provide
Benefical
Owner
Information
24
N/A
1
8
8
4
1
7940
239
160
26
JURISDICTIONS OF INTRODUCERS IDENTIFIED IN FILES REVIEWED
Africa
Mauritius
Seychelles
Americas
Argentina
Bahamas
Barbados
Belize
Bermuda
Brazil
BVI
Canada
Cayman Islands
Curacao
Dominican Republic
Nevis
Panama
USA
Europe
Cyprus
Estonia
Gibraltar
Jersey
Latvia
Liechtenstein
Guernsey
Luxembourg
Ireland
Isle of Man
Malta
Monaco
Russia
Switzerland
UK
Other: Western
European Countries
Asia/Pacific
China
New Zealand
Taiwan
Hong Kong
Singapore
Other: Asian
Countries
Top 6
Jurisdictions
Switzerland
Hong Kong
USA
Cyprus
UK
Singapore
Frequency of
Licensee
Observations
20
17
14
11
9
8
Middle East
Bahrain
Israel
Lebanon
UAE
Introducers from Non-recognised Jurisdictions
Country/
Jurisdiction
Assessing Body
FATF – strategic ML/TF
deficiencies with agreed
action plan in place
Conclusions
in Last
Follow-up Report
Bahrain
MENAFATF
N/A
-
Belize
CFATF

(CFATF)
CFATF in May 2014 recognised that
Belize
has made
significant
progress in addressing its AML/CFT
deficiencies and continues to work
with them.
Dominican Republic
CFATF

(CFATF)
In May 2014 CFATF removed the
Dominican Republic from Enhanced
Follow-up and placed it in Regular
Follow-up.
Israel
MONEYVAL
N/A
-
Lebanon
MENAFATF
N/A
-
Monaco
St. Kitts & Nevis
MONEYVAL
CFATF
N/A

(CFATF)
-
Seychelles
UAE
ESAAMLG
MENAFATF
N/A
N/A
In
November
2014
CFATF
recognised that St. Kitts and Nevis
had made significant progress in
addressing their deficiencies and
was removed from the follow-up
process.
-
Access to Client Company Files and Beneficial
Ownership Information
Type of
Licensee
“Yes” to
Access
“No” to
Access
Class I
34
3
Class II
1
0
Class III
5
1
Company
Management
5
0
Total
45
4
Type of
Licensee
Evidence of
Files on Site
No Evidence
of Files on
Site
Class I
Class II
Class III
Company
Management
34
1
5
5
3
0
1
0
Total
45
4
Type of
Licensee
Data Source
Company No.
Location of
Introducers for
the Licensees
who had no
access
Where
information is
held
Class I Trust (1)
Class I Trust (2)
Class I Trust (3)
Class III Trust (4)
#3
#17
#41
#25
Panama, USA and
Switzerland
Hong Kong
Cyprus and
Panama
Hong Kong and
China
Panama
Hong Kong
Only senior
management has
full access to
database
Hong Kong
Testing of Introducer Relationships
Type of Licensee
Yes Testing
No Testing
No
Introduced
Business
Class I
25
10
2
Class III
3
3
0
Company Management
1
3
1
Licensees with Introduced Business
Rated
Largely
Compliant
or Above
% of
Inspected
Licensees
Rated
Largely
Compliant or
Above
Total
Licensees
Rated
57.78%
19
42.22%
45
25
51.02%
24
48.98%
49
Requirements to update
CDD
35
71.43%
14
28.57%
49
Requirements of ECDD
22
55.00%
18
45.00%
40
Requirements of
Certified Documents
28
57.14%
21
42.86%
49
Records, Record
Keeping and Retrieval
29
59.18%
20
40.82%
49
No of
Licensees
Rated
Below
Largely
Compliant
% of Inspected
Licensees
Rated Below
Compliant
Introduced Business
26
Requirements of CDD
Areas Reviewed
Licensees with Introduced Business
Introduced Business
Class I
Class II
Class III
Company Management
Total
Requirements of CDD
Class I
Class II
Class III
Company Management
Total
Requirements of Certified
Document
Class I
Class II
Class III
Company Management
Total
NC
PC
Requirements of ECDD
NC
PC
4
2
1
7
14
3
2
19
Class I
Class II
Class III
Company Management
Total
7
3
2
12
10
10
NC
PC
Requirements to update CDD
NC
PC
1
1
2
17
3
3
23
Class I
Class II
Class III
Company Management
Total
8
3
1
12
19
2
2
23
NC
PC
NC
PC
2
1
3
20
2
3
25
Records, Record Keeping and
Retrieval
Class I
Class II
Class III
Company Management
Total
2
2
21
3
3
27
Compliance Ratings Received by
Class I Trust Licensees
57%
Records, Record Keeping and Retrieval
Requirements of Certified Document
5%
38%
54%
5%
38%
3%
N/A
Requirements of ECDD
11% 19%
27%
22%
22%
Non-Compliant
Partially Compliant
22%
Requirements to update CDD
51%
22% 5%
Largely Compliant
Compliant
Requirements of CDD 3%
Introduced Business
46%
5%11%
0%
20%
35%
38%
40%
16%
32%
60%
80%
14%
100%
120%
Compliance Ratings Received by Class III Trust
Licensees
N/A
Non-Compliant
Partially Compliant
33%
Records, Record Keeping and Retrieval
Requirements of Certified Document
17%
17%
33%
50%
Requirements to update CDD
50%
Introduced Business
Compliant
50%
Requirements of ECDD
Requirements of CDD
Largely Compliant
17%
50%
50%
33%
50%
33%
17%
17%
50%
17%
17%
Compliance Ratings Received by Company
Management Licensees
Records, Record Keeping and Retrieval
60%
40%
Requirements of Certified Document
60%
40%
N/A
20%
Requirements of ECDD
40%
40%
Non-Compliant
Partially Compliant
20%
Requirements to update CDD
40%
20%
20%
Largely Compliant
Compliant
60%
Requirements of CDD
20%
Introduced Business
0%
40%
20%
20%
40%
40%
60%
20%
80%
100%
Compliance Rating Received by
Licensees with no Introduced Business
N/A
Non-Compliant
Partially Compliant
Compliant
Largely Compliant
Records, Record Keeping and Retrieval
50%
50%
Requirements of Certified Document
50%
50%
Requirements of ECDD
25%
25%
50%
Requirements to update CDD
25%
50%
25%
Requirements of CDD
25%
50%
25%
Compliance Officers
Type of Licensee
Yes Approved
Compliance
Officer
No Approved
Compliance
Officer
No Compliance
Officer
Exempted
Class I Trust
33
1
3
-
Class II Trust
1
-
-
-
Class III Trust
4
-
1
1
Company Management
4
-
-
1
Total
42
1
4
2
Compliance Officers – Unapproved Compliance Officer Results
Areas Reviewed
Data Source Company No.
Introduced Business
Requirements of CDD
Requirements to update CDD
Requirements of ECDD
Requirements of Certified
Documents
Records, Record Keeping and
Retrieval
Class I Trust (1)
#22
Partially Compliant
Largely Compliant
Partially Compliant
Largely Compliant
Partially Compliant
Partially Compliant
Licensees where a Compliance Officer was Non-existent
Areas Reviewed
Class I Trust (2)
Class I Trust (3)
Class I Trust (4)
Class III Trust
(1)
Data Source Company No.
#3
#31
#37
#13
Introduced Business
Compliant
Largely
Compliant
Partially
Compliant
Non-Compliant
Requirements of CDD
Largely Compliant
Partially
Compliant
Partially
Compliant
Non-Compliant
Requirements to update CDD
Largely Compliant
Partially
Compliant
Partially
Compliant
Non-Compliant
Requirements of ECDD
Largely Compliant
N/A
Partially
Compliant
Non-Compliant
Requirements of Certified
Documents
Partially Compliant
Non-Compliant
Largely
Compliant
Non-Compliant
Records, Record Keeping and
Retrieval
Largely Compliant
Partially
Compliant
Partially
Compliant
Non-Compliant
Introducer Agreements on File
Type of Licensee
Class I Trust
Class II Trust
Class III Trust
Number of
Introducers
Introducers
Reviewed
No. of Agreements
on File
7141
-
207
-
182
-
791
24
18
Company
Management
Total
% of
Agreements
on File that
were
Reviewed
87.92%
75.00%
87.50%
8
8
7
7940
239
207
86.61%