British Virgin Islands Financial Services Commission issues compliance alert on ongoing customer due diligence and transaction monitoring

The British Virgin Islands Financial Services Commission (FSC) published an industry circular reminding financial institutions and designated non-financial businesses and professionals that customer due diligence must be maintained on an ongoing basis, including transaction monitoring, once a customer relationship has commenced and where a customer’s circumstances, activities, or risk profile changes. The FSC set out that ongoing customer due diligence (CDD) comprises transaction monitoring, customer screening, and updating CDD information, and that out-of-profile behaviour should trigger an assessment of whether the customer’s money laundering, terrorist financing and proliferation financing (ML/TF/PF) risk has changed. Monitoring systems are expected to flag unusual activity for review, enable prompt senior management examination, and support appropriate action based on findings. Firms are also expected to screen customers (including beneficial owners) to detect politically exposed person (PEP) status, sanctions exposure, and links to criminal or higher-risk activity using sanctions lists and press and media releases, and to keep CDD information up to date on a risk-sensitive basis, including more frequent measures for higher-risk customers and on trigger events set by senior management. The circular points to the FSC’s CDD FAQs and a joint FSC–BVI Financial Investigation Agency guide on effective ongoing monitoring as supporting materials for firms to incorporate into their frameworks.