FAQs

Licensees are strongly encouraged to consider alternative delivery methods for AML related staff training. Options which do not require persons to travel or be physically present in a classroom-type environment may be facilitated via online platforms, or through participation in webinars and other online learning modules. In-house training, which may be facilitated by your MLRO, compliance officer, or another qualified senior officer, should be considered to meet the staff training obligations. 

Licensees should document any instance where scheduled AML training is postponed or cancelled by the organiser or yourself, due to COVID-19 pandemic restrictions, and specify (a) the reasons for the cancellation, whether due to travel or other social distancing restrictions and (b) that attempts to source alternative arrangements were unsuccessful

Suspicious Transaction Reporting FAQs: Financial Institutions

Red Flags for Suspicious Transaction or Activities FAQs

Suspicious Transaction Reporting FAQs

Suspicious Transaction Reporting Filing Process FAQs

Suspicious Transaction Potential Examples

Customer Due Diligence (CDD), as defined by section 19 (1) of the Anti-Money Laundering and Terrorist Financing Code of Practice (AMLTF Code Practice), is the process undertaken by Financial Institutions (FIs) and Designated Non-Financial Businesses and Professionals (DNFBPs) to gather information about applicants for business or customers.

CDD is important because it aids in preventing money laundering (ML), terrorist financing (TF), proliferation financing (PF) and other financial crimes by facilitating an understanding of FIs’ and DNFBPs’ applicants for business, customers, their business and risk profiles, and supports the monitoring of their activities.

The initial CDD process includes the following key steps, as detailed in section 19 (3) of the AMLTF Code of Practice and the explanatory notes:

• Identifying the applicant for business or customer;
• Verifying the applicant for business or customer’s identity; 
• Obtaining details of the purpose or intended nature of the business relationship or transaction; and
• Understanding the applicant for business or customer and their circumstances (which includes gathering information on the source of wealth and funds, size and volume of the business, and expected nature and level of the transaction sought)

Source of funds refers to where the funds or assets that will be used for the business relationship or transaction were derived (e.g. income, business profits, investments, dividends, inheritance, property sale, business sale, etc.).

Source of wealth refers to how the applicant for business or customer derived his or her or its wealth, particularly in higher risk scenarios (e.g., income, business profits, investments, dividends; inheritance, property sale, business sale, etc.) and level of wealth (i.e. the total value of wealth).  

Source of wealth provides a snapshot of the overall financial profile of an applicant for business or customer, whereas source of funds is more narrowly focused and helps FIs and DNFBPs to verify the legitimacy of funds to be used for a specific business relationship or transaction. As an example, source of funds for an investment holding company may be proceeds of a property sale by the beneficial owner. Whereas the beneficial owner’s source of wealth may include employment and investment income.

In accordance with section 19 (4) of the AMLTF Code of Practice, CDD should be undertaken:

• when establishing business relationships;
• when processing one-off transactions;  
• when there is a suspicion of ML, TF or PF;
• when a business relationship or transaction presents any specific higher risk scenario;
• when the FI or DNFBP doubts the accuracy or adequacy of previously obtained customer identification data; and
• in the case of a trust or life insurance policy, where the beneficiary is identified or designated

In accordance with section 19 (4) of the AMLTF Code of Practice, CDD should be undertaken when processing one-off transactions involving:

• $15,000 or more;
• wire transfers of $1,000 or more;
• in the case of a Virtual Assets Service Provider, virtual assets of $1,000 or more; or
• $3,000 or more, or the equivalent in any other currency, for entities or professionals licensed or registered under the Virgin Islands Gaming and Betting Control Act, No. 14 of 2020.

The above thresholds include multiple transactions for smaller amounts that appear to be linked and should consider the specific risks presented. However, FIs and DNFBPs may establish lower thresholds than the ones specified.

In addition, CDD should be undertaken when:

• the transaction presents a higher risk scenario;
• there is doubt about the veracity or adequacy of previously obtained CDD information; and
• where there is a suspicion of ML, TF or PF, irrespective of any threshold.

In accordance with section 19 (4A) of the AMLTF Code of Practice, CDD must be performed:

• as soon as the beneficiary is identified as a specifically named natural person, legal person, or legal arrangement, by recording the name of the beneficiary; and
• as soon as the beneficiary is designated by characteristics or by class, by obtaining sufficient information about the beneficiary so that the FI would be able to identify the beneficiary at the time of payout.