OFFSHORE COMPANIES – MONEY LAUNDERING TRENDS
The BVI Registry has reported in Public Statement No. 1 of 2012, more vigilant efforts to blacklist countries who are not, in their opinion, conforming to generally accepted principles of money laundering procedures. The report provides a detailed account of Jurisdictions that may be difficult for the formation of offshore companies.
According to the BVI company registry, the jurisdictions that are not complying and therefore should be blacklisted are Bolivia, Cuba, Ethiopia, Ghana, Indonesia, Kenya, Myanmar, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania, Thailand and Turkey. In addition the BVI Companies House has reaffirmed its blacklisting of Iran and the Democratic People’s Republic of Korea. Businesses looking to form offshore companies in these jurisdictions will come up against potential barriers.
The BVI Registry has once again reminded “the general public, including all regulated and other persons who are required to comply with the requirements of the anti-Money Laundering Regulations, 2008 and the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008, to note the concerns…with respect to the named jurisdictions and consider the money laundering and/or terrorist financing risks associated and apply appropriate or enhanced customer due diligence measures when dealing with customers or transactions involving any of the jurisdictions.
The BVI Company Formation, Company Registration and Maintenance Registry also noted that the following jurisdictions have committed to improve their money laundering procedures: Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei, Cambodia, Kyrgyzstan, Mongolia, Morocco, Namibia, Nepal, Nicaragua, Sudan, Tajikistan, Turkmenistan, Trinidad and Tobago, Venezuela and Zimbabwe. This is positive news for businesses looking to set up offshore companies in these jurisdictions but all improvements would need to be met by the country first.
Opening bank accounts for offshore companies who trade with any of the above companies or whose directors or shareholders are resident of those countries is going to be quite difficult. Individuals with ties to these countries should be aware of this when looking to set up an offshore company. An offshore company is definitely possible, but there should be a distance between the offshore company and the above countries.