Requests for information
Execution of requests
Permissible uses of information
Undertaking of inspection visits
On May 8 2017 the BVI Financial Services Commission (FSC) signed a multilateral memorandum of understanding between members of the Group of International Financial Centre Supervisors (GIFCS). The objective of the memorandum is to ensure clarity and effective regulatory cooperation between the authorities responsible for supervising the banking sector in signatory jurisdictions.
The memorandum is another way that the authorised competent authorities in participating jurisdictions can cooperate regarding the exchange of information. Under the memorandum the various competent authorities of participating jurisdictions agree to provide mutual assistance and exchange of information to enable them to perform their duties and functions effectively according to the domestic laws and regulations of their home jurisdictions. It includes a framework of the roles and requirements of such authorities in order to achieve effective regulation and supervision, and to make provision for confidentiality rules regarding the sharing and exchange of information.
Participating jurisdictions include Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Guernsey, the Isle of Man, Jersey and all other GIFCS members.
The memorandum does not affect the abilities of competent authorities to obtain information from persons on a voluntary basis, provided that the proper procedure is followed in each jurisdiction. Where a request is made under the memorandum, the requesting authority can request assistance or information by electronic communication, attaching a scanned original signed document addressed to the FSC's contact, referred to in Appendix C. The FSC may ask for the original signed request to be sent by post. If the request complies with Paragraph 5, then any request for the original should not delay the commencement of work on it. The request to the FSC under the memorandum should contain:
- a description of the subject matter of the request and the purpose for which the assistance or information is sought;
- a description of the assistance, documents or information sought by the requesting competent authority;
- any information in the possession of the requesting competent authority that might assist the requested competent authority (ie, the FSC) in identifying the person believed to possess the information sought, or where such information may be obtained;
- the legal provisions concerning the subject matter of the request and the relevance of the requested assistance or information to the specified laws and regulations; and
- the names of any third parties to which the requesting competent authority is bound to or expects to release the requested information.
Where a party (ie, a natural person, body corporate, partnership or unincorporated association, government or political sub-division, agency or government instrumentality) receives a request under the memorandum, such a party can deny the request under the following grounds, as set out in Paragraph 10:
- The request would require the requested competent authority to act in a way that would violate the law and regulations of the jurisdiction of the requested competent authority;
- The request is not in accordance with the provisions of the memorandum;
- Corresponding assistance would not be given in the country or territory of the requesting competent authority; or
- There are public interest grounds to do so.
Notwithstanding the above, the applicable rule of law must be followed in participating jurisdictions. Where a party which has received a request under the memorandum feels that its rights may be infringed, there is always recourse to the courts to seek a remedy at law.
Where the requested competent authority is satisfied that assistance should be given, it will provide the information held in the files of the requested competent authority or use its powers to seek information from financial institutions (ie, trust and corporate service providers regulated by the FSC). Under the memorandum, the requests are assessed on a case-by-case basis. An urgent response can be provided by telephone, fax or other electronic means and, if requested, the original signed document should be sent to the requesting competent authority's contact within five business days.
Where one competent authority has information that will assist its sister competent authority, the former may provide such information fully and freely to the extent permitted under the laws and regulations of its jurisdiction, even though no formal request was made.
Permissible uses of information
Assistance provided under the memorandum must be used only for the purpose of enabling the requesting competent authority to exercise its regulatory functions under its domestic law. Any confidential information (ie, identity, assets, liabilities transactions or accounts of a financial institution) that is provided by the requested competent authority to the requesting competent authority should not be used for any other purpose unless the requested competent authority has given written consent. Where information is to be shared with third parties, the requesting competent authority must seek the consent of the requested competent authority which, if it deems fit, will give written consent to the information being shared with, or used by, the third party.
Undertaking of inspection visits
A competent authority may request to visit a financial institution in the jurisdiction of the requested competent authority where relevant and necessary to fulfil its obligations. The requesting competent authority should give at least 30 days' notice to the requested competent authority of the time and scope of the inspection, and should provide the requested competent authority with a list of names of individuals who will conduct the inspection (the inspection team). The requested competent authority has the right to accompany the requesting competent authority on any inspection visit. Before any on-site inspection is commenced, the requesting authority should discuss the scope of the inspection and any other matters of interest with the FSC at its office, and all members of the inspection team should give an undertaking to comply with the confidentiality provisions of the legislation in the British Virgin Islands.
The competent authorities will keep confidential:
- any request for assistance or information pursuant to the memorandum;
- the contents of any requests made pursuant to the memorandum;
- any information received or provided pursuant to the memorandum; and
- any matter arising during the operation of the memorandum, including consultations and unsolicited information.
The requesting competent authority should not provide to any person information provided to it by the requested competent authority, unless that person agrees in writing or is legally obligated to maintain the confidentiality of the information. This confidentiality continues after any competent authority ceases cooperation under the memorandum. Where a competent authority is legally compelled by legislation or court order to disclose to a third party information that has been provided under the memorandum, the competent authority should inform the other competent authority indicating what information it is compelled to release. The competent authorities should work together to ensure that reasonable steps are taken to protect the confidentiality of the information that is subject to the disclosure.
For further information on this topic please contact Aki Corsoni-Husain or Mirza Manraj at Harneys by telephone (+1 284 494 2233) or email ([email protected] or [email protected]). The Harneys website can be accessed at www.harneys.com.