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What is Money Laundering (“ML”)?

 

Money Laundering is the act of concealing, retaining, converting, transferring or in any other way moving funds acquired, directly or indirectly, from an unlawful activity or otherwise from an unlawful source.

Money laundering is practically the process by which acquired illegitimate funds are integrated into the financial system to make it appear as though the funds originated from a legitimate source.

The three stages of the money laundering process are:

  1. Placement - getting the proceeds of crime into the banking system;
  2. Layering - moving the money through different transactions, accounts (layers) to complicate the tracking process; and
  3. Integration - using the money to purchase legitimate assets which effectively “cleans” the proceeds of crime.

More specifically, within BVI legislation:

“money laundering” means the act of concealing, retaining, converting, transferring or in any other way moving funds acquired, directly or indirectly, from an unlawful activity or otherwise from an unlawful source, and –

  • relates both to a primary offence and any ancillary offence;
  • includes any activity or offence prescribed as money laundering under the Proceeds of Criminal Conduct Act, 1997 or any other enactment; and
  • includes drug money laundering as provided in section 2 (1) of the Drug Trafficking Offences Act, 1992.

 


Any person that fails or refuses to provide information to the Agency that it considers relevant to the performance of its functions commits an offence and is liable on summary conviction to a fine not exceeding twenty thousand dollars or to imprisonment for a term not exceeding two years or to both.

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