Regulatory Alerts2024-11-19
Effective Enhanced Customer Due Diligence Measures
Issued by the Virgin Islands' Financial Services Commission and Financial Investigation Agency, these guidelines mandate that financial institutions and designated non-financial businesses implement robust Enhanced Customer Due Diligence (ECDD) procedures for higher-risk customers and transactions. Licensees must differentiate ECDD from standard due diligence by verifying beneficial ownership, confirming the source of wealth and funds, applying senior management approval for high-risk relationships, and maintaining dynamic risk assessment frameworks that trigger ECDD upon changing circumstances. The guidance provides concrete examples of high-risk scenarios, including politically exposed persons, complex ownership structures, citizenship-by-investment programmes, and emerging technologies, ensuring licensees can effectively mitigate money laundering, terrorist financing, and proliferation risks.