The BVI Financial Services Commission (the FSC) and BVI Financial Investigation Agency (the FIA), have today, jointly issued Guidance on ‘Mitigating Risks with Introduced Business Relationships’ (the Guidance), for the benefit of their respective supervised entities. Photo: FSC

The Guidance is intended to serve as a reference for both Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBP) to assist them in mitigating the risks associated with the engagement of third-party introducers. Photo: FSC

The Guidance is intended to serve as a reference for both Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBP) to assist them in mitigating the risks associated with the engagement of third-party introducers.

According to a joint press release from the FSC & FIA on October 28, 2024, the Guidance highlights the importance of FIs and DNFBPs complying with reporting obligations outlined in local legislation, namely: Anti-Money Laundering and Terrorist Financing Code of Practice; Anti-Money Laundering Regulations; Regulatory Code; Financial Investigation Agency Act; and Financial Services Commission Act, and also calls for the application of a risk-based approach when applying measures to mitigate the risks associated with engaging with third-party introduced.

The Guidance

The Guidance, according to the press release, stems from the requirements set out in the Financial Action Task Force’s (FATF) Recommendation 17 - Reliance on Third Parties.

It is instructive as it relates to entities’ understanding of risks associated with the use of introduced business including responsibility for understanding ownership and control of introduced clients, and mitigating risks stemming from the introducer relationship itself.

The Guidance also outlines actions that should be taken in circumstances where it is necessary to terminate a third-party introducer relationship.

The FSC and FIA encourage FIs and DNFBPs to familiarise themselves with the Guidance and apply the information contained within, when engaging with third-party introducers, including the best practices listed at the end of the Guidance.

The FSC and FIA said they remain committed to enhancing the Territory’s capability for fighting financial crime and will continue to take steps to ensure that relevant tools are made available to supervised entities so that they can do their part in securing compliance.

The Guidance on Mitigating Risks with Introduced Business Relationships is available on the FSC's and FIA's website.