The Government of the British Virgin Islands has today announced that the independent regulator, the Financial Services Commission (FSC), has issued an enforcement action against Mossack Fonseca & Co (B.V.I) Limited that sees the firm fined $440,000 for its contravention of numerous sections of the Anti-Money Laundering and Terrorist Financing Code of Practice and BVI Regulatory Code.

The fine, which is the largest ever issued by the Financial Services Commission, relates specifically to failures in record keeping, risk assessment and adequate updating of customer due diligence. The full details of the enforcement action are available on the BVI FSC website.

Commenting, Premier and Minister of Finance, Dr. the Honourable D. Orlando Smith, OBE, said, “Today’s enforcement action clearly demonstrates the effectiveness of the Territory’s independent regulator, the seriousness with which it tackles any breaches of its code and, through the adjustments made to its Risk Assessment Framework, an on-going commitment to strengthening its regime to ensure this remains fit for purpose.”

Premier Smith added, “Achieving this outcome in the face of intense international scrutiny is testament to the FSC’s conviction, dedication and willingness to conduct such a thorough investigation whilst holding to account those who fail to comply with the territory’s structure and regulations. Throughout this time, the FSC has co-operated fully with any requests from other international law enforcement agencies who are conducting their own independent investigations and it will continue to do so as this befits its position as regulator of a leading finance centre."

He said, “The BVI remains an engaged participant in the international community and is fully involved in initiatives aimed at creating a global tax and regulatory framework that can be implemented consistently to create a level playing field upon which all countries can fairly compete.”

Premier Smith is also pleased to note that in addition to the enforcement action taken against Mossack Fonseca & Co (B.V.I) Ltd, the FSC has also made adjustments to its Risk Assessment Framework aimed at more consistently detecting potential concerns to reduce the risk of non-compliance whilst also devoting additional resources to assessing the full compliance of all BVI licenced corporate service providers.

The announcement follows an in-depth investigation into Mossack Fonseca & Co (B.V.I) Ltd, following the publication of the Panama Papers in April 2016 that included

a thorough six month on-site compliance inspection focused on reviewing specific aspects of the company’s anti-money laundering and risk management procedures; as well as the appointment of a qualified person approved by the FSC to advise on Mossack Fonseca & Co (B.V.I) Ltd’s business affairs and to provide recommendations on the corrective actions required to bring the licencee into full compliance.