the registration duty, estate, and vat authority (aed) has clarified that all alternative investment funds (aifs), including unregulated aifs and not limited to raifs only, are required to comply with the anti-money laundering and countering the financing of terrorism (aml/cft) reporting obligations. these requirements go beyond reserved alternative investment funds (raifs) and apply broadly to all aifs under aed supervision. the aed has also provided guidance on determining if an entity meets the definition of an aif and therefore falls within scope of the luxembourg aml law of 2004. this guidance can be found on the aed’s website. here's what you need to know to meet your obligations effectively. key reporting requirements unregulated aifs must prepare and submit the following key documents for the 2024 reporting period by 30 june 2025: aif rc and rr identification form confirms the appointment of both a responsible for compliance (rr) and a responsible for control (rc). submit the original excel format to aed by email. ensure supporting governing body documents (eg, board minutes) are included. aif aml/cft questionnaire 2024 provides a comprehensive overview of your fund’s aml/cft compliance framework, with data as of 31 december 2024. the questionnaire must be submitted in the original excel format by the rr (or rc, if delegated). annual rc report a signed, pdf-format document summarising aml/cft activities and compliance measures implemented by the rc as of 31 december 2024. where to access the documents detailed instructions and required forms are available on the aed website: aif rc rr identification form and faq guidance here. aif aml/cft questionnaire 2024 and completion guidelines here. information on preparing the annual rc report here. compliance is mandatory even if you do not receive a formal reminder, all aifs must submit these documents in line with articles 4(1) and 5 of the aml/cft law. non-compliance can result in regulatory consequences, so ensure submissions are accurate, complete, and timely. for any questions, aifs can contact aed directly at aed.finvehicles@en.etat.lu. for further information, the official publication can be found here.

on 31 march 2025, the cayman islands department for international tax cooperation (ditc) published to the official gazette its updated lists of common reporting standard (crs) participating jurisdictions and reportable jurisdictions for 2025. reportable jurisdictions list - new addition: armenia, senegal, uganda, saint kitts and nevis, rwanda, and morocco participating jurisdictions list - new addition: armenia, georgia, kazakhstan, moldova, and ukraine the crs established by the organisation for economic co-operation and development (oecd), serves as the international benchmark for the automatic exchange of information (aeoi). under the crs framework, jurisdictions are required to collect financial account details from their “financial institutions” and automatically exchange this data annually with partner jurisdictions. many jurisdictions have committed to implement the crs. the crs list of participating jurisdictions and reportable jurisdictions can be found here.

on 7 march 2025, the bermuda monetary authority (bma) amended rule 14 of the insurance account rules 2016 to account for ifrl filers following the adoption of ifrs 17 - insurance contracts. this update introduces important changes for commercial insurers preparing financial statements under international financial reporting standards (ifrs). effective 26 february 2025, eligible commercial insurers can use the amended schedules for their 2024 year-end reporting and beyond. this applies to those filing condensed general purpose financial statements and adhering to ifrs accounting principles, including the implementation of ifrs 17. importantly, insurers no longer need prior approval from the bma to submit under this updated framework. however, insurers reporting full financial statements or using generally accepted accounting principles (gaap) are not impacted by this change. this amendment underscores the bma’s commitment to modernising regulatory standards and supporting the insurance industry’s transition to ifrs 17 compliance. to support this transition, the reporting forms and guidelines for: notes to condensed consolidated general purpose financial statements (ifrs basis) condensed general purpose financial statements are available on the bma's website at bma reporting forms and guidelines. bma’s notice can be accessed here.

on 21 february 2025, the financial action task force (fatf) released significant updates regarding jurisdictions under increased monitoring and high-risk jurisdictions subject to a call for action. these updates highlight global efforts to improve anti-money laundering (aml), combating the financing of terrorism (cft), and counter-proliferation financing (cpf) measures. below are the key updates on jurisdictions under increased monitoring and high-risk jurisdictions: philippines removedthe philippines has successfully strengthened its aml/cft framework and is no longer under fatf's increased monitoring. nepal and lao pdr addedthese countries are now monitored as they address deficiencies in their aml/cft systems. high-risk jurisdictionsthe fatf calls for countermeasures against democratic people's republic of korea and iran for their failure to address systemic risks, while myanmarremains under scrutiny, requiring enhanced due diligence. maintaining vigilance in financial systems the fatf’s updates highlight ongoing efforts to strengthen global financial integrity, urging member states to balance rigorous compliance with the unimpeded flow of legitimate humanitarian and financial activities. these measures ensure a risk-based approach while minimising disruptions to non-profit operations, remittances, and relief efforts. these developments underscore the critical need for concerted global efforts in combating financial crimes. institutions operating in affected jurisdictions must remain informed and compliant, ensuring robust risk management strategies in line with international standards. fatf publications can be accessed here and here.

on 25 february 2024, the british virgin islands international tax authority (ita) published its updated lists of common reporting standard (crs) participating jurisdictions and reportable jurisdictions for 2025. both lists were officially gazetted on 13 march 2025. reportable jurisdictions list - new addition: belize participating jurisdictions list - new addition: belize the crs, developed by the organisation for economic co-operation and development (oecd), is the global standard for automatic exchange of information (aeoi). under crs, jurisdictions have an obligation to obtain financial account information from their “financial institutions” and to exchange the information on an automatic annual basis with partner jurisdictions. a large number of jurisdictions have committed to crs implementation. the crs list of participating jurisdictions can be found here. the crs list of reportable jurisdictions can be found here.

on 13 march 2025, the bermuda ministry of justice issued aml-atf advisory 1/2025, highlighting the need for heightened vigilance when dealing with jurisdictions deemed high-risk for money laundering and terrorist financing. this advisory underscores the regulatory responsibility of aml/atf regulated financial institutions and other relevant persons under the proceeds of crime (anti-money laundering and anti-terrorist financing) regulations 2008 (poca regulations) to strengthen compliance measures in relation to high-risk countries. enhanced due diligence (edd) as per the poca regulations, businesses must apply enhanced customer due diligence in cases where transactions or clients are tied to jurisdictions identified as high-risk. this requirement is rooted in two key provisions: regulation 11(1)(aa): edd must be applied to business relationships where a person or a transaction is from or in a country flagged by the financial action task force (fatf) or its regional bodies as high-risk. regulation 11(1)(ab): edd is necessary where a person or transaction is from or in a country which represents a higher risk of money laundering, corruption, terrorist financing, or international sanctions. role of fatf fatf, as the global standard-setter for anti-money laundering (aml) and counter-terrorist financing (cft), routinely publishes updates on countries with inadequate controls. the february 2025 fatf public statements identify jurisdictions requiring heightened scrutiny. two categories emerge: high-risk jurisdictions (black list): countries posing serious risks, such as north korea, iran, and myanmar. apply counter measures and edd measures in accordance with the risk. jurisdictions under increased monitoring (grey list): nations actively working to improve but still falling short, including algeria, nigeria, and south africa. take appropriate actions to minimise the associated risks, which may include edd measures in high risk situations. the advisory reminds entities to consult these fatf assessments regularly to guide their risk-based approach and take appropriate steps to reduce exposure. countries of concern the advisory points to a list of jurisdictions requiring edd, which includes countries like kenya, vietnam, syria, and yemen, among others. special focus is placed on jurisdictions where international sanctions are also in effect, demanding additional compliance measures as outlined in the international sanctions regulations 2013. call to action financial institutions and regulated entities must: assess the risks linked to these jurisdictions diligently. implement robust edd processes for high-risk cases. consider fatf’s findings and incorporate these into their compliance strategies to safeguard against financial crime. this advisory supersedes previous notices and reiterates bermuda's commitment to upholding global aml/cft standards. for further details, the ministerial advisory 1-2025 can be found here and the fatf statements here and here.

on 14 march 2025, the european commission issued an alert on the high risk of circumvention identified with respect to imports of plywood originating in russia or belarus. more specifically, the european union has previously imposed sectoral sanctions in respect of plywood and plywood-related products originating from russia and belarus. this includes prohibitions on the purchase, import, or transfer of such products, as well as restrictions on related services like brokering, logistics, and warehousing. these measures target a significant revenue source for both countries, alongside individual sanctions placed on oligarchs linked to the wood industry. circumvention tactics in the alert, the commission flags that to bypass these restrictions, russian and belarusian producers frequently use third-country companies to disguise the origin of their plywood. these schemes involve falsified or misleading documents such as invoices, certificates of origin and proof of harvest locations. goods are often relabelled, repackaged and transported through deceptive routes by road, rail, or sea. the importance of due diligence the alert reiterates that enhanced due diligence is critical for eu market participants, including importers, intermediaries, and end-users. key steps include verifying the true origin of plywood and looking out for red flags such as birch plywood linked to regions with trade ties to russia or belarus, economically unjustifiable processing operations, or suspicious logistical routes. legal and financial risks eu operators bear legal responsibility for breaching sanctions, whether by intent or negligence. failing to conduct due diligence can result in reputational harm, financial penalties, and even criminal charges. voluntary self-disclosure may act as a mitigating factor, but offenders remain exposed to investigations and sanctions enforcement. compliance starts with awareness operators should stay informed through resources such as the european commission’s notices and expert guidance. comprehensive due diligence not only protects against sanctions violations but also positions businesses as responsible participants in the eu market. european commission’s alert can be found here.

on 15 march 2025, the eu published in the official journal of the european union, council implementing regulation 2025/527 which removes four russian citizens from the list of designated persons provided under annex i of eu regulation 269/2014 (the eu sanctions list). the european union decided to entirely remove mikhail vladimirovich degtyaryov, vladimir valerievich rashevsky, viatcheslav moshe kantor, and gulbakhor ismailova, high profile russian individuals, from the eu sanctions list. this is understood to have taken place following pressure applied from hungary to block the renewal of eu sanctions targeting over 2,400 russian and belarusian citizens in response to the war in ukraine. the reasons for removing mikhail vladimirovich degtyaryov, viatcheslav moshe kantor, and gulbakhor ismailova from the eu sanctions list have not been disclosed to the public yet. by contrast, vladimir valerievich rashevsky has been involved in a number of cases seeking his delisting. most recently, on 10 july 2024, the general court of the court of justice of the eu (cjeu) has decided in cases t-309/22 and t-739/22 rashevsky vs council to annul: council decision (cfsp) 2022/1530 of 14 september 2022 amending decision 2014/145/cfsp; council implementing regulation (eu) 2022/1529 of 14 september 2022 implementing regulation 269/2014 (regulation 269); council decision (cfsp) 2023/572 of 13 march 2023 amending decision 2014/145/cfsp; implementing regulation (eu) 2023/571 of 13 march 2023 implementing regulation 269; decision (cfsp) 2023/1767 of 13 september 2023 amending decision 2014/145/cfsp; and council implementing regulation (eu) 2023/1765 of 13 september 2023 implementing regulation 269, which included the name vladimir valerievich rashevsky in the list of designated persons of regulation 269 for the period 14 september 2022 to 13 september 2023 (the relevant acts). the general court decided to annul the relevant acts, on the basis that the council of the european union failed to demonstrate that the restrictive measures imposed to vladimir valerievich rashevsky were justified. council implementing regulation 2025/527 can be found here. the official judgment of cases t‑309/22 and t‑739/22 rashevsky vs council (currently only available in french) can be found here.

the european commission recently updated its frequently asked questions on sanctions against russia and belarus. the updates 18 december 2024: the faqs were updated to include new faqs and responses on “no re-export to russia” clause set out in article 12g of regulation 833. these updates can be found here. 20 december 2024: the faqs were updated to include new faqs and responses on new restrictions on diamond trade set out in article 3p of regulation 833. these updates can be found here. 4 february 2025: the faqs were updated to include guidance for banks and their customers, in the context of regulation (eu) 2022/263 concerning the occupied areas of donetsk, kherson, luhansk, and zaporizhzhia oblasts. these updates can be found here. 11 february 2025: the faqs were updated to include new faqs and responses on donetsk, kherson, luhansk, and zaporizhzhia oblasts related matters concerning sanctions adopted following russia’s military aggression against ukraine. these updates can be found here. 14 february 2025: the faqs were updated to include new faqs and responses on sanctions against russia and belarus, with focus on the following provision: article 5n of council regulation (eu) no 833/2014. these updates can be found here. 12 march 2025: the faqs were updated to include faqs on sanctions against russia and belarus, with focus on the following provisions: articles 3m and 3n of council regulation (eu) no 833/2014 and oil imports concerning sanctions. these updates can be found here. 20 march 2025: the faqs were updated to include faqs on sanctions against russia and belarus, with focus on the following provisions: article 5ae of council regulation (eu) no 833/2014 on infrastructure transaction ban. these updates can be found here. 24 march 2025: the faqs were updated to include faqs on sanctions against russia and belarus, with focus on the following provisions: article 3r of council regulation (eu) no 833/2014.) no 833/2014 on liquefied natural gas (lng) transshipments. these updates can be found here. the consolidated version of the faqs can be found here.

on 14 march 2025, the european union reinforced its stance on russia by extending restrictive measures against nearly 2,400 individuals and entities until 15 september 2025. these measures are part of the eu's continued response to russia's actions in ukraine. furthermore, three deceased and four individuals, namely viatcheslav moshe kantor, gulbakhor ismailova, mikhail degtyaryov, and vladimir rashevsky have now been removed from the asset freeze list under eu regulation 269/2014. on 12 march 2025, the european parliament adopted a resolution (2025/2528(rsp)) (the resolution) that calls for bold steps to escalate the pressure on russia. the resolution proposes confiscating frozen russian assets to support ukraine’s defence and reconstruction efforts. additionally, the resolution urges eu institutions and member states to enhance the effectiveness of sanctions through several key measures, including: banning or adding tariffs to russian imports to the eu to limit economic benefits extending sanctions to enabling states such as belarus, iran, and north korea sanctioning chinese entities supplying dual-use goods or military items to russia addressing circumvention issues by eu-based companies, third-party actors, and non-eu nations aiding sanction evasion calling for the next eu sanctions package to sanction shadow fleet tankers and their owners and for actions against sanctions circumvention of the russian shadow fleet broadening sanctions on russian and belarusian wood products imposing stricter entry limitations on russian and belarusian citizens entering the eu a white paper for european defence complementing these measures, the european parliament has on 12 march 2025, formally adopted a white paper on the future of european defence, signalling an important shift in eu security strategy (the white paper). the white paper calls for unified and ambitious efforts to address growing geopolitical threats, including russia’s aggression in ukraine and the increasing influence of non-european powers. it articulates the need for the eu to transform itself into a credible security and defence provider. key elements of the white paper comprehensive eu risk assessment: the white paper urges the development of an eu-wide risk assessment to identify potential cross-sector threats, including cyberattacks, hybrid warfare, and geopolitical destabilisation. this framework would provide strategic foresight and ensure the eu's preparedness for emerging challenges. integration of defence and security into eu policies: a horizontal approach is advocated, calling for security and defence to be integrated into key eu policies. this includes aligning financial tools, regulatory frameworks, and industrial strategies to reinforce defence readiness. european defence union: to safeguard europe’s territorial integrity, the white paper calls the implementation of the european defence union. it underscores the need for coordinated investments, streamlined procurement processes, and enhanced cooperation with existing frameworks like nato. a focus on strategic regions, such as the black sea and arctic, is highlighted as critical for preserving european security. enhanced defence industrial policy: recognising substantial capability gaps, the paper pushes for strengthened industrial collaboration and investment. it supports a more competitive eu’ defence technological and industrial base (edtib), the integration of the ukrainian defence industry into the edtib and prioritises the development of critical technologies like cybersecurity, drones, and space-based systems. transformational ambition: the paper stresses that current efforts must evolve into a cohesive, long-term defence strategy. specific actions include scaling up military readiness, meeting urgent needs in ukraine, and forming strategic partnerships to counter global threats. the white paper further emphasises the need to learn from ukraine’s wartime experience, recommending the integration of ukraine's defence industry into european efforts. a detailed roadmap provides both short and long-term priorities, reflecting the urgency and complexity of today’s threat landscape. by extending individual restrictions and targeting broader networks of support, the eu aims to increase its economic and strategic pressure on russia while ensuring proper enforcement mechanisms are in place. these updates reflect the eu's commitment to supporting ukraine and upholding the integrity of its sanctions framework. eu council decision (cfsp) 2025/528 can be found here and eu council implementing regulation (eu) 2025/527 here. european parliament resolution on continuing the unwavering eu support for ukraine, 2025/2528(rsp), can be found here. european parliament resolution of 12 march 2025 on the white paper on the future of european defence (2025/2565(rsp)) – can be found here.

the bvi international tax authority (ita) recently hosted a common reporting standards (crs) webinar, introducing substantial updates to crs compliance and upcoming regulatory requirements for financial institutions (fis). these changes, coupled with key filing deadlines for 2025, highlight the heightened focus on regulatory compliance within the bvi. changes to crs reporting – effective june 2025 the webinar underscored important alterations to the crs reporting framework, set to take effect from june 2025. these updates demand careful preparation and proactive policy reviews by all reporting and non-reporting fis. introduction of a new crs form effective june 2025, fis will be required to complete the new crs form annually via the bvifars reporting portal. this comprehensive form requires detailed accounts of how crs obligations are being fulfilled. separate sections for reporting and non-reporting fis further tailor the form’s requirements. while the submission deadline is yet to be formally announced, it is expected to follow the 31 may crs reporting deadline. crs risk assessment and enforcement activities the bvi ita revealed its new crs risk assessment system, aimed at improving compliance enforcement and oversight. fis will be assigned one of three risk ratings based on submitted data, crs responses, and additional ita queries: low risk: reviewed approximately every five years unless specific triggers necessitate earlier action. medium risk: reviewed every one to two years due to moderate risk factors. high risk: reviewed annually until compliance is consistently achieved. fis identified as medium or high risk may undergo compliance inspections. these can be desk-based (remote reviews of submitted data) or onsite (either physical or virtual). inspections will focus on all aspects of crs compliance or specific risk-prone areas, depending on the findings from the risk assessment. updating crs policies and procedures the ita emphasised the importance of reviewing crs-related policies to align with the expanded reporting obligations. institutions must ensure consistent application of these policies to avoid administrative fines or enforcement actions. key regulatory deadlines for 2025 alongside the crs updates, financial institutions should note the following deadlines to ensure full compliance with annual regulatory requirements. 31 march 2025 compliance report: a mandatory submission for licensed entities summarising their compliance efforts for the prior calendar year. investment business annual return: requires reporting on business operations for the calendar year ending december 2024. aml/cft return: outlines adherence to anti-money laundering and countering the financing of terrorism regulations. 30 june 2025 audited accounts: funds and licensees with 31 december fiscal year-ends must file audited financials by this date. unaudited accounts: approved and incubator funds, as well as approved managers, must submit their non-audited accounts. mutual fund annual return: this return provides a detailed summary of financial performance, operational updates, and governance information. with changes to crs reporting and ongoing regulatory requirements, fis must take deliberate steps to ensure readiness: review and update crs policies and procedures in line with the ita’s new expectations. prepare for compliance reviews based on the crs risk assessments and assigned ratings. meet submission deadlines to avoid penalties and maintain regulatory standing. for further details and assistance, the bvi crs webinar and a comprehensive q&a section can be found here.

on 7 march 2025, the british virgin islands financial services commission (bvi fsc) issued an update through industry circular 12 of 2025 regarding the implementation of beneficial ownership (bo) filing requirements. this blog post outlines the key changes under the bvi business companies and limited partnerships (beneficial ownership) regulations, 2024 and provides guidance on the phased implementation. from 2 january 2025, all bvi business companies and limited partnerships must file their beneficial ownership information through the virrgin system. this regulatory development aligns with international transparency standards and is a significant move toward strengthening corporate compliance within the jurisdiction. key elements of the implementation plan the bo filing regime is being rolled out in phases to ease the transition process for stakeholders. below are the essential components and timelines to keep in mind. key dates: 2 january 2025– filing requirements officially commenced 31 march 2025– schema for batch or bulk filings to be released, facilitating filings for entities handling higher volumes 17 april 2025– batch/bulk filing functionality to become operational the incremental approach provides companies and their agents ample time to adapt to the new system. functionality and filing practicalities to address industry concerns, several aspects of the new system have been clarified: batch/bulk filing feature:highly anticipated by agents managing large-scale filings, this feature will streamline multi-entity data submissions interdependency of registers:information for registers of directors, members, and beneficial owners can be filed independently and in no specific order supporting documentation requirements: documentation is only required if data anomalies, such as missing names or dates of birth, occur common queries addressed in the circular the bvi fsc has provided additional details to clarify some of the recurring concerns raised by stakeholders: exemptions:entities that are subsidiaries of publicly listed companies are exempt from certain bo filing requirements. however, at this time, the filing function in virrgin is not yet available. please refer to the schedule of timelines/dates for the release of all functions accessible through the schedule included in the circular. technical issues: errors in virrgin (ie, 505 error page and 500 error page) could be related to the internet browser being used by the user. chrome and firefox are recommended browsers for optimal performance. the bvi fsc recommends clearing your cache, try using a different browser, and submit your request again. if the problem continues, the bvi fsc requests to send an email with the error message to support@bvifsc.vg or bo@bvifsc.vg. penalties for non-compliance:if attempts to file a transaction are made and the function is not available in virrgin, the company will not incur penalties if the registry is notified of the attempt to file a transaction. a list of entities and the reasons for their non-filing should be submitted to the registrar, and a penalty fee will not be charged to these entities. future updates: updated faqs to address additional concerns are expected to be published shortly and periodically thereafter. for assistance, the bo unit may be contacted by emailing queries to bo@bvifsc.vg or through the help desk at support@bvifsc.vg. the fsc emphasises the importance of adhering to deadlines as outlined in the updated timeline. agents and corporations are advised to monitor the fsc site regularly for updates. circular 12 can be found here. find our in-depth guide here, offering comprehensive insights into the latest developments on bvi's bo regulations.

on 7 march 2025, the british virgin islands financial services commission (bvi fsc) published its detailed timeline for the rollout of key functionalities related to beneficial ownership (bo) filings, as well as the management of registers of directors, registers of members, registers of limited partners, and registers of general partners. this phased approach aims to enhance compliance and operational efficiency for stakeholders. highlights of the timeline the implementation plan introduces various functionalities in a structured sequence, allowing entities to manage their statutory obligations effectively. below are the key features and their respective target launch dates: register of directors (rod) amendment to register of directors - single filing: 16 march 2025 batch filing for registration of directors: 3 april 2025 correction of directors - single filing: 4 april 2025 global change for director corrections: 16 april 2025 global change for director notices: 25 april 2025 register of members (rom) notice of change exemption: 3 april 2025 batch filing for member registration: 4 april 2025 single filing for member corrections: 4 april 2025 global change for member corrections: 20 june 2025 cease register of members and file exemption: 11 july 2025 beneficial ownership (bo) notice of change – cease bo and file exemption: 11 april 2025 notice of change exemption for beneficial ownership: 17 april 2025 batch filing for bo registration: 17 april 2025 single filing for bo corrections: 28 april 2025 global change for bo corrections: 4 june 2025 notice of change of bo (global change): 27 june 2025 register of limited and general partners (rolp/rogp) notice of change exemptions (limited & general partners): 3 april 2025 cease exemption and file of limited or general partners: 3 april 2025 batch filing for changes or corrections (global changes): 24 april 2025 notice of change limited or general partners (global changes): 22 may 2025 these functionalities reflect bvi fsc's commitment to fostering compliance with transparency standards and enhancing ease of filing for stakeholders. phased rollouts, including the introduction of batch filings and global change filings, ensure smoother operations for entities managing multiple filings. streamlining compliance processes the timeline also integrates features for exemptions, enabling firms to streamline their compliance processes while adhering to the updated requirements. these incremental updates underscore the importance of proactive adjustments by companies to avoid penalties and capitalise on operational efficiencies. next steps for stakeholders industry practitioners should familiarise themselves with this timeline and adjust their internal processes to accommodate these changes. with key deadlines rapidly approaching, prompt action will help maintain compliance while reducing administrative burdens. the bvi fsc’s bo implementation timeline can be accessed here. find our in-depth guide here, offering comprehensive insights into the latest developments on bvi's bo regulations.

the cayman islands monetary authority (cima) recently issued a warning notice citing significant breaches of the securities investment business act (sib act) and other key regulations. this guide outlines the key breaches, proposed actions, and valuable lessons for financial entities to ensure compliance. cima highlighted several violations, including: failure to file annual declarations - breach of section 5(4e)(a) of the sib act due to non-submission of declarations for 2024 and 2025. non-payment of annual fees and penalties - failure to pay fees and penalties for 2024 and 2025, contravening section 5(4e)(b). lack of proper directorship - breach of section 15(4)(a) for not maintaining a minimum of two individual directors or one eligible corporate director. non-compliance with cima directions - breach of section 34(17)(a) of the monetary authority act for failing to meet regulatory requirements and directions. failure to maintain a registered office - violation of section 50(1) of the companies act (2023 revision). these breaches indicate an alarming lack of compliance, governance, and communication. proposed enforcement action cima has proposed to revoke the registration of the securities - registered person under section 17(2a) of the sib act. justifications for this action include: failure to comply with statutory obligations. poor management and governance practices. non-adherence to lawful cima directives. lessons and best practices for compliance this enforcement action underscores the importance for financial entities to uphold stringent compliance standards. to avoid similar actions, entities should: implement robust governance - ensure directorship meets statutory requirements and actively monitor compliance. timely reporting - file all annual declarations and pay fees punctually to avoid penalties. maintain transparency - communicate promptly with regulators and respond to their inquiries. review internal controls - regularly assess compliance frameworks to identify and address gaps. seek expert guidance - engage legal and compliance professionals for ongoing advisory support. final takeaway non-compliance carries significant risks, from reputational damage to loss of operating rights. cima’s enforcement action serves as a compelling reminder of the critical need for rigorous adherence to regulatory obligations. institutions must treat compliance as an ongoing priority and as a foundation for trust and sustainability in this highly regulated industry. the cima’s warning notices can be found here.

on 21 february 2025, the bvi financial services commission (fsc) released a series of three educational videos designed to develop understanding and bolster compliance regarding proliferation financing (pf). these videos serve as a valuable resource for licensed entities seeking to enhance their risk management strategies. covering essential topics, the videos explain what pf entails, provide illustrative examples of pf typologies, and outline the responsibilities of supervised entities. key areas of focus include the importance of ongoing monitoring, effective sanctions screening and accurate reporting procedures. the fsc urges licensees to not only review the material themselves but also encourage their teams to engage with these resources. familiarity with the guidance provided in these videos can help entities meet their obligations more effectively and adapt to the evolving risks related to money laundering, terrorism financing, and pf. vigilance remains critical. by implementing robust aml/cft/cpf measures, entities can enhance compliance efficiency and build resilience against emerging threats. the videos can be accessed here and the circular 11 can be found here.

on 7 february 2025, the central bank of cyprus (cbc) issued a warning to investors about the risks associated with crypto assets, for the purposes of protecting financial stability and consumer protection. while the application of blockchain technology holds great promise within the financial sector —particularly in payment systems and potential central bank digital currencies (cbdcs) — the cbc noted that crypto-assets remain highly volatile, speculative, and vulnerable to fraud. despite the introduction of eu regulation 2023/1114 on markets in crypto assets (mica regulation) which improved transparency and efficiency within the area of crypto assets, the area still suffers from important risks which include inadequate regulatory safeguards and financial crime exposure. the cbc clarified that crypto assets are unsuitable as reserve assets, and no cyprus bank invests in them. the cbc urges investors to exercise caution when they invest in crypto assets in order to avoid substantial financial losses and fraud. the official announcement of the cbc can be found here.

on 3 february 2025, the bermuda monetary authority (bma) launched a call for proposals to explore embedded supervision within decentralised finance (defi). this initiative aims to integrate regulatory oversight directly into blockchain-based financial ecosystems, ensuring compliance through automation. embedded supervision leverages technology to automate compliance and reporting, enabling real-time regulatory oversight within defi platforms. the bma’s approach is to enhance the effectiveness and efficiency of financial regulation in an increasingly decentralised world. objectives of the pilot project the initiative seeks to: understand defi risks and regulation: collaborate with industry stakeholders to develop adaptive, risk-based regulatory frameworks. assess technical feasibility and operational efficacy: identify key components for embedded supervision and evaluate automated compliance mechanisms. monitoring risk and develop best practices: monitor risk parameters, assess efficiency gains, and establish regulatory guidelines for defi oversight. why it matters defi is a transformative financial services ecosystem built on distributed ledger technology (dlt), aiming to enhance accessibility, transparency, and efficiency through decentralisation. key components include smart contracts, peer-to-peer networks, and protocols, which operate without traditional intermediaries. despite its benefits, defi presents unique regulatory challenges. key concerns include: decentralisation complexity: determining responsibility for compliance in distributed networks. aml/kyc challenges: adapting anti-money laundering and identity verification processes. global operations: navigating cross-border regulatory frameworks. rapid innovation: keeping pace with defi’s evolving technologies and governance models. potential pilot projects the bma encourages creative proposals, including: regulatory decentralised autonomous organisation (dao) implementation: testing a decentralised governance model with bma participation. smart contract compliance: embedding regulatory conditions into defi smart contracts. real-time compliance reporting: automating data collection and compliance checks in real-time. defi lending oversight: supervising lending platforms with embedded risk monitoring. the bma invites defi operators, fintech firms, protocol developers, digital asset businesses, academic institutions, and other industry stakeholders to participate in this initiative. interested participants must submit a proposal by 30 april 2025 via email to fintech@bma.bm. proposals should outline objectives, methodology, technological framework, risk assessment, and regulatory alignment. for full details, bma’s official consultation can be found here.

on 29 january 2025, luxembourg’s tax authority published circular l.i.r. n° 164/1, replacing the guidelines issued in 1998. this development modernises the rules for determining interest rates applicable to shareholder current accounts, introducing critical changes grounded in the arm’s length principle. what was changed? elimination of the fixed 5 per cent ratethe long-standing fixed interest rate of 5 per cent for shareholder current accounts is no longer valid. instead, interest rates must align with market conditions and reflect terms that independent parties would agree to, adhering to the arm’s length principle. simplified approach for individual shareholdersto ease compliance, companies may reference annual consumer credit rates published by the central bank of luxembourg. the average of monthly rates during the relevant financial period can serve as a benchmark, provided supporting documentation is maintained. clarification for associated enterprisesfor transactions between associated enterprises (eg, intercompany loans), the circular reiterates that interest rates must be determined on a case-by-case basis, factoring in elements such as currency, credit risks, refinancing rates, and loan maturity. implications for businesses and shareholders this shift calls for a proactive approach to compliance. luxembourg companies should review and align their position with the updated guidelines, ensuring proper documentation to substantiate arm’s length terms. individual shareholders should also reassess their tax positions to mitigate any risks. for guidance on implementing these updates, consult our tax experts. the circular l.i.r. n° 164/1 (in french) can be found here.

the european central bank (ecb) has issued decision (eu) 2025/222 of 27 january 2025 which grants non-bank payment service providers (psps) access to eurosystem central bank operated payment systems and central bank accounts (the decision). this move aims to enhance competition and innovation in the european payments landscape by creating equal opportunities between traditional banks and non-bank psps. the decision: outlines when a eurosystem central bank should provide access to its central bank operated payment systems for a non-bank psp; prohibits eurosystem central banks from offering or providing safeguarding accounts to non-bank psps or to crypto-asset services providers; lays out the maximum holding amounts by a non-bank psp; and sets out penalties in relation to non-compliance with the maximum holding amount limit or the requirements for access to central bank operated payment systems. the decision aims to reflect the ecb's stated commitment to fostering a diverse and competitive financial environment, ultimately benefiting consumers and businesses with more choices and improved payment services. the decision (eu) 2025/222 of the european central bank will apply from 9 april 2025 and can be accessed here.

on 21 february 2025, the bvi financial services commission (fsc) released its revised handbook on international co-operation and information exchange. this updated guide reflects the bvi’s commitment to international collaboration in tackling critical global issues, including money laundering, terrorism financing, and the proliferation of weapons of mass destruction. why international cooperation matters international cooperation plays a vital role in fighting organised crime, which often transcends national borders and relies on exploiting legitimate institutions to mask illicit activities. criminal networks use these means to fund further unlawful undertakings, making cross-border collaboration essential in the global fight against such threats. the bvi recognises that efficient crime prevention requires countries to work together in robust and multifaceted ways, ensuring no jurisdiction becomes a safe haven for those engaged in criminal activities. mechanisms such as mutual legal assistance and extradition exemplify how countries can collectively pursue justice. by facilitating the extradition of fugitives or sharing critical legal intelligence, jurisdictions can protect their communities and ensure the stability of their financial systems. over the past three decades, the bvi has prioritised these efforts by continuously refining its cooperation regimes to align with international standards and developments. the global nature of organised crime extends its reach into regulated markets, with examples such as tax evasion, securities manipulation, insider trading, and corporate abuse. these activities threaten the integrity of financial systems and undermine investor confidence. to counter this, the bvi's cooperation frameworks not only protect domestic interests but also contribute to safeguarding global economic stability. a testament to the bvi's commitment the handbook on international co-operation and information exchange serves as a vital resource for regulators, judicial officials and law enforcement. with structures designed to uphold the integrity of the territory's legal and financial frameworks, it showcases the bvi’s proactive and collaborative stance in combating crime across borders. by implementing such measures, the bvi bolsters its dedication to maintaining a secure and stable financial environment. the revised handbook offers a comprehensive guide to its methods of international cooperation and information-sharing protocols. the official press release can be found here and the handbook here.