Foreward by Andrew Chilvers
When the 5th Anti-Money Laundering Directive was introduced into law by the UK and EU in January 2020, for many professionals it was a much needed addition to legislation that would significantly help business transparency and combat money laundering. In essence, it was good for business and for public and professional confidence.
All jurisdictions signing up to the 5th Directive will build and maintain UBO registries that will be publicly available at any time. UBO registries will also be set up for bank accounts and trusts, although these latter two will not be publicly available but be accessed by the relevant authority such as financial intelligence units and legal advisors looking into money laundering. Investigative journalists who can show a legitimate interest in the case can also have access, which is vital if another Panama Papers (see below) is to be uncovered. Across the UK and EU national UBO registers will be set to connect through a central European platform by April 2021.
Please provide a brief overview of the UBO Register in your jurisdiction and its history?
The BVI’s Beneficial Ownership Secure Search system (BOSSs) is a cutting-edge electronic search engine that enables the relevant BVI Authorities to have a searchable database with information on BVI Companies and their beneficial owners. It was introduced pursuant to an agreement made between the governments of the British Virgin Islands and the United Kingdom by way of an Exchange of Notes in April 2016 for the provision and exchange of certain information relating to beneficial ownership.
Key Points Summary
1. Each registered agent maintains a UBO Database (via the BOSS system) containing information on the ultimate beneficial ownership information in relation to the entities to which it provides registered agent services.
2. Only designated persons have access to BOSS and the information maintained by a registered agent. Designated persons can conduct a search upon receiving a request from the BVI Financial Investigation Agency, the BVI Financial Services Commission, the BVI International Tax Authority or the BVI Attorney General Chambers.
3. Law enforcement authorities of designated countries that have entered into an agreement with the British Virgin Islands may, acting in furtherance of their functions only, through the BVI Financial Investigation Agency, the BVI Financial Services Commission, the BVI International Tax Authority or the BVI Attorney General Chambers request a search on BOSS. A search request made must be proper and lawful and in compliance with the legislation governing the affairs of the authority making the request and any international agreement administered by it.
Content of the UBO Database
The UBO Database will contain the following prescribed information:
1. for each company, the name, including alternative names, the incorporation number or its equivalent, the date of incorporation, the status of the company and the registered address;
2. for each beneficial owner of the company, his or her name, residential address, date of birth and nationality;
3. for each registrable legal entity, the details of the registrable legal entity as outlined for companies above at point 1, the jurisdiction in which the registrable legal entity is formed, the basis upon which the legal entity is designated as a registrable legal entity, where the registrable legal entity is a foreign regulated person, the name of the jurisdiction of regulation and the name of the foreign regulator or where the registrable legal entity is a sovereign state or a wholly owned subsidiary of a sovereign, the name of both the sovereign state and the wholly owned subsidiary thereof; and
4. exempt persons also file basic details and the basis or bases upon which they are exempt.
A beneficial owner is an individual who ultimately owns or controls a corporate or legal entity including an individual who holds directly or indirectly 25% or more of the shares or voting rights in the company or otherwise exercises control over the management of the company.
A “registrable legal entity” is any legal entity which would be the beneficial owner of the company if it were an individual; and one or more of the following applies to it:
• it is an exempt person (see below);
• it is a foreign regulated person; or
• it is a sovereign state or wholly owned subsidiary of a sovereign state.
Notable exceptions:
1. companies, the securities of which are listed on a recognised stock exchange and its subsidiaries;
2. companies holding a licence specified in Schedule 1 of the Regulatory Code, 2009, for example a licensed investment fund manager;
3. companies which are either recognised, registered or otherwise approved as a mutual fund under the Securities and Investment Business Act, 2010 including an approved fund, an incubator fund, a public fund, a professional fund and a private fund and their subsidiaries.
4. Partnerships and foreign companies
How can your firm ensure your clients are fully compliant with the new / existing requirements?
There is a duty to keep the beneficial ownership information up to date and applicable entities are obliged to inform the Registered Agent of any changes in the beneficial ownership or in the prescribed beneficial owner information within 15 days of becoming aware of such a change, indicating the date when such changes took place.
The Registered Agent is required to take all necessary steps for the updating of the BOSS System, within 15 days of being notified of these changes.
The government has set out strict penalties to be imposed on any person who does not comply with the requirements set in the new BOSS Legislation.
What changes can we expect to see emerging, are any new proposals expected?
The BOSS system was recently amended such that it is now able to allow for the filing of information relating to economic substance.
At present the matter of publicly accessible registers is under discussion. The BVI has committed to implementing publicly available registers and is working with the United Kingdom Government towards implementation of a publicly accessible register of beneficial ownership for companies in line with international standards and best practices as they develop globally. Key to this is the commitment of all jurisdictions (including the United States) to implement corresponding regimes.
What other information might be relevant?
A registered agent is not required to collect and maintain prescribed information for companies that ceased to be a corporate entity or have been struck-off the Register of Companies before 1 January 2016.
The Law requires that any person designated to access BOSS must do so from physically secure premises and a secure IT system. The designated persons must pass security vetting tests and are required to take an oath of confidentiality prior to being designated by order of the BVI Minister of Finance.
It is an imprisonable offence for any person other than a registered agent to maintain the Registered Agent Database and a person designated by the Law to access the information retained on the Registered Agent Database.
