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New UK Police & Crime Bill could affect VI Offshore Financial Sector
It was on October 11, 2017 that the United Kingdom House of Commons or the British Parliament passed 'The Policing & Crime Act (Financial Sanctions) (Overseas Territories) Order 2017'.
The Order was primarily created to extend the powers afforded by Part 8 (Financial Sanctions) of the Policing and Crime Act 2017, to the British Overseas Territories which includes the Virgin Islands (VI).
What's in the Act?
Part 8 of the Act seeks to strengthen the enforcement regime for financial sanctions by increasing the maximum custodial sentence on conviction for breaching sanctions, expanding the range of enforcement options, including a new system of monetary penalties, and by providing for the immediate implementation of United Nations mandated sanctions.
EU financial sanctions Regulation and UN financial sanctions Resolution are resolutions passed by the European Union and the Security Council of the United Nations respectively to take measures that—
- impose prohibitions or obligations for one or more of the following purposes—
i.freezing funds or economic resources;
ii.preventing funds or economic resources being made available;
iii.prohibiting or restricting access to financial markets or financial services;
- make provision to supplement prohibitions or obligations of the kind mentioned in paragraph (a).
What does this mean for the VI?
Under the Act, when a UN Security Council Resolution is passed that designates a person or entity as being subject to financial sanctions, that designation can take effect automatically in the Virgin Islands i.e. would be read as if incorporated under the laws of the VI.
The Act via a temporary resolution may confer a power on the Governor, in relation to any function of granting, varying or revoking a licence to do something that would otherwise be prohibited by the Temporary Regulations; however, the Governor may not exercise that function without the consent of the Secretary of State in each case.
The temporary resolution may also confer a power on the Governor to impose a monetary penalty and where the Governor receives a monetary penalty, it is to be paid into the Consolidated Fund for the Territory or, where no such fund exists, into an equivalent public fund.
The maximum penalty on summary conviction is to be read as if a person guilty of an offence under any Temporary Regulations is liable on summary conviction to imprisonment for a term not exceeding 6 months, or a fine not exceeding £5,000 or its equivalent, or both according to the new law.
Impact on VI Financial Industry- Willock speaks
In an invited comment, former Permanent Secretary and Businessman Julian Willock, who often speaks to the international press on the offshore financial sector when asked about the impact, responded "it is too early to say". Mr Willock said firstly, "I am not a lawyer so I am only sharing my opinion from what I read and understand."
The political aspirant said "if you look at recent UN sanctions passed against the Democratic People's Republic of Korea, the UN has imposed sanctions on money transfers and aimed to shut North Korea out of the international financial system," however, this was after repeated nuclear testing.
Now with our open financial sector registry, any person who sets up an offshore account in the Virgin Islands that the UN or UK deems undesirable, "we can face as a country sanctions." However knowing our vigorous due diligence regime "I foresee no immediate significant impact on the private, voluntary or public sectors in the VI," Mr Willock told our newsroom.
Some parts of the new UK Policing & Crime Act (Financial Sanctions) (Overseas Territories) Order 2017 did not take effect until November 2, 2017.
See link to information on the [UK] Policing and Crime Act 2017:
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12 Responses to “New UK Police & Crime Bill could affect VI Offshore Financial Sector”
The UK already has the power to extend sanctions orders to the BVI, and does so (eg with certain Russian entities subject to sanctions). This is not sanctioning the BVI, but meaning that the BVI cannot facilitate or enter into specified activities or transactions with those entities. Most commonly this affects BVI companies which might be doing business with such people. However, this is a good thing, as the BVI does not want to be seen as a place where you could get around internationally agreed sanctions.