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FSC ISSUES GUIDELINES FOR ANTI-MONEY LAUNDERING & COMBATING TERRORIST FINANCING FOR THE BANK SECTOR
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The BVI Financial Services Commission (FSC) has recently issued “Anti-Money Laundering & Combating Terrorist Financing Guidelines for the Banking Sector”, emphasises the role of banking institutions in preventing, deterring and combating Money Laundering (ML), Terrorist Financing (TF) and Proliferation Financing (PF).
The 33-page document, published on 1st July, 2020, provides guidance on the subject matter with practical advice on mitigating identified risks, customer due diligence, wire transfers, indicators and reporting of suspicious activities, record keeping, and employee screening and training.
An introduction to the guidelines published on the FSC website states: “Banks should use these guidelines as a tool to aid in compliance with AML/CFT obligations under the Territory's legislation, as well as the Recommendations of the Financial Action Task Force”.
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The FSC has issued these guidelines in line with its role as regulator and licensor of banks and other financial institutions in the Virgin Islands.
Click here to read guidelines.
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THE ECONOMIST: HOW RESILIENT ARE THE BANKS?
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WHEN FINANCIERS and governments redesigned the financial system in order to make it safer after the debacle of 2007-09, most of them imagined that a shock as bad as the subprime fiasco would be a generation away. In fact, it arrived only a decade or so later. Lockdowns have led to a savage recession that is expected to produce huge loan losses as firms and households suffer.
So, are too-big-to-fail banks really safer? The latest stress tests conducted by the Federal Reserve suggest the answer in America is “yes”. On June 25th the Fed released the results of its annual exercise, which compares banks’ buffers with the losses they would face in a downturn. In a pessimistic “u-shape” scenario, in which the economy faces prolonged social distancing and repeated outbreaks of the virus, the Fed reckons that banks would face total losses of over $700bn on their collective loan book. The hit is well above the worst case of $465bn that was envisaged in 2009, when the Fed did its first stress test. This year’s scenario implies cumulative losses on loans of about 10%, above the 7% loss rate actually experienced during the subprime crisis.
Happily, the Fed concludes, in this u-shape scenario the banking system’s total core-capital ratio would fall from the present 12% to a still-passable 8%. Some banks might have to limit the dividends they pay their shareholders in order to bolster their capital positions—indeed, on June 29th Wells Fargo said it would have to cut its payout. But this is a small price to pay.
One way to give yourself nightmares is to imagine that nothing had changed at the banks and they were still run with the skimpy capital levels they had at the end of 2008. The Economist has used the Fed’s data to make a rough estimate of the impact today’s loan losses would have had (see chart). If an unreformed banking system had faced this year’s u-shape scenario, its total core-capital ratio would have potentially dropped to 1.5%, with several big banks’ figures touching zero—ie, technical insolvency. Faced with this, depositors and counterparties would have fled, in a full-scale bank run. The taxpayer bail-out in this parallel universe might have been even bigger than in the financial crisis.
Instead, the banking system’s new resilience means that customers and investors did not rush to withdraw funds as in 2007-09. Banks were seen as safe. Lenders in turn have had the resources to extend overdrafts to firms in need.
Don’t sleep easy yet, though. Risky activities have migrated beyond the banking system. The result is that even though taxpayers have not had to bail out banks, they have once again been exposed to huge potential losses. The Fed has made purchases in, and extended implicit guarantees to, many markets—including those for junk bonds and exchange-traded funds—and is also lending directly to firms.
Another worry is that the banking system outside America is less solid. Most European banks have reasonable capital ratios but are far less profitable than American banks, because they are inefficient and face lower interest rates and fragmented markets. America’s stress tests revealed that about a quarter of the total buffers its banks possess to absorb losses come from their healthy profits (which can offset bad-debt provisions), rather than from their core capital. Many European lenders do not have that luxury. The boss of one of the largest warns that though the shock so far has been manageable, a second wave of covid-19 infections this year or next will be “a major test for the financial sector”.
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PAID TESTING EXTENDED TO TRAVELLERS
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The BVI Health Services Authority is expanding Covid-19 testing to include people needing a test for travel or elective procedures, but at a cost that was not disclosed.
Residents who want a test can now call the hotline at 852-7200 and request it a minimum of ten days in advance.
The decision marks a shift from recent weeks, when testing was focused mainly on identifying infected people, their close contacts and vulnerable populations.
“Identifying these persons and enforcing quarantine measures helped to stop transmission of the disease,” Director of Primary Health Care Dr. Natasha Frett explained on Friday. “The curfew restrictions also aided in control ling the movement of people and prevention of further transmission.”
Click here to read more.
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CAREY OLSEN ACTS IN BVI's FIRST MAJOR VIRTUAL TRIAL SINCE COVID-19 LOCKDOWN
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Lawyers from Carey Olsen's Singapore litigation team have acted in the first major trial to take place remotely before the Eastern Caribbean Supreme Court since the British Virgin Islands (BVI) introduced emergency court measures in late March in response to the global coronavirus (COVID-19) pandemic.
It is understood to be the the first fully virtual trial of its kind ever to be held in the BVI, and saw submissions and cross-examination of witnesses take place via real-time video and audio conferencing facilities, with parties, witnesses and legal representatives located in BVI, Singapore, Hong Kong, Malaysia, South Africa, the UK and the US participating simultaneously.
Click here to read more.
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DELOITTE GIFTS EDUCATION MINISTRY WITH LAPTOPS
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Pictured: Ministry displaying laptops
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The Ministry of Education, Culture, Youth Affairs, Fisheries and Agriculture is the recipient of 15 laptops courtesy of the accounting and auditing firm Deloitte.
The laptops will go to students in need of devices for blended learning in the new academic school year.
Minister, Dr. the Honourable Natalio D. Wheatley said that the ministry is preparing for the new academic school year where students will be exposed to online and face-to-face learning.
Click here to read more.
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MORE MAPLE DONATIONS FOR ESHS MUSIC PROGRAMME
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Maples BVI has donated an additional $12,500 to the Ministry of Education, Culture, Youth Affairs, Fisheries and Agriculture to go towards the Elmore Stoutt High School’s (ESHS) Music Programme.
According to government, Minister for Education, Culture, Youth Affairs, Fisheries and Agriculture, Hon. Natalio Wheatley thanked Maples for their contribution which will be used to purchase new music instruments for the secondary school students of ESHS.
This contribution is the second donation that Maples BVI has made towards the ESHS Music programme through the Recovery and Development Agency (RDA).
Chief Executive Officer (Acting) of the RDA, Anthony McMaster said, “I am grateful that both the private and public sectors could work together for the benefit of the future of this Territory.”
As a community partner, Maples BVI previously donated $100,000 to the ESHS Music Programme which was used to build the music classroom and purchase musical instruments.
Managing Partner of Maples BVI, Richard May said that he is pleased to make the donation and thanked the RDA for identifying and facilitating a need in the community.
Click here to read more.
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HARNEYS LEADS ON CHAROEN POKPHAND FOODS INTERNATIONAL BOND ISSURANCE
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Leading capital markets experts Harneys represented CP Foods Capital Limited on its US$275 million bond issuance and listing on the Singapore Stock Exchange.
CP Foods Capital Limited is a newly incorporated British Virgin Islands subsidiary of Thai-listed Charoen Pokphand Foods Public Company Limited. Harneys delivered BVI advice on the issuance of exchangeable bonds due 2025 exchangeable into shares in Charoen Pokphand Foods Public Company Limited.
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Pictured: Ellie Crespi, Partner, Corporate, Banking & Finance, Harneys
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The Charoen Pokphand Group is one of the world’s largest conglomerates, headquartered in Thailand and with eight business lines covering 13 business groups, as well as investments in 21 different countries and an estimated US$63 billion annual revenue.
The Harneys team was led by Partner Ellie Crespi upon instructions from onshore counsel Linklaters, Singapore.
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FINES AMONG PENALTIES COMING FOR BREACHING COVID-19 MEASURES
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The Cabinet of the Virgin Islands has agreed and approve for the mandatory wearing of facemasks and physical distancing between individuals amid COVID-19.
Premier and Finance Minister, Hon. Andrew Fahie in a statement on Wednesday evening, June 8 said that the Ministry of Health and Social Development instruct the Attorney General to consider all relevant legislation, including the COVID-19 Control and Suppression (Miscellaneous Provisions) Act, 2020 for the purpose of enacting provisions to adhere to the social distancing measures, which include, but are not limited to the wearing of face masks/coverings by all individuals when in an indoor or outdoor public space; and the maintaining of the six feet of physical distance between individuals when in an indoor or outdoor space.
Further, that all businesses must ensure that employees and visitors (customers) wear face masks/coverings and adhere to all social distancing measures approved by the Government of the Virgin Islands.
Click here to read more.
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Pictured: Premier, Hon. Andrew Fahie
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FUTURE 'DATA-DRIVEN' FINANCIAL MARKETS
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7 TIPS TO ESTABLISH A HEALTHY MORNING ROUTINE TO BE MORE PRODUCTIVE
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A morning routine can be a dealbreaker for people who look forward to having a great and productive day. Since most of us have been working from home over the last few months, the routine in the morning seems to have gotten scattered, lost and distant. Young professionals and even young adults often have a hurried routine to either getting to work or attending college lectures often skipping on breakfast or going to the gym. Having a great morning routine can make a big difference in being productive and staying organised.
Creating a morning routine is not about accomplishing more tasks than others but it revolves around feeling good about yourself by accomplishing certain tasks, and starting your day with confidence, a positive attitude and setting the right tone for the rest of the day. It can be overwhelming when we’re chasing a bunch of tasks, often leaving us stressed or short of time even before the day has begun. Therefore, don’t hit the snooze button! Wake up early, preferably before sunrise to start off a healthy and productive day.
Click here to read 7 tips suggested by Sheryl Salis, dietician, certified diabetes educator and wellness coachmore.
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UPCOMING EVENTS
July
BVI Finance Breakfast Forum
Webinar | 21 July | 10:00 a.m
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