Monday, 18th January 2010Don’t be Duped about Internal Audit Requirements

Kyria AliYour Company is probably NOT exempt!

Do not dupe yourself into believing that the requirement of an Internal Audit Function does NOT apply to your Company!

Though the Regulatory Code, 2009 (the "Regulatory Code"), which is to be brought into force on 1 February 2010, names just three types of BVI Licensees for which internal audit is a requirement, it is important to note that this Regulatory Code does not incorporate the details of the Anti-money Laundering Regulations, 2008 and the Anti-money Laundering and Terrorist Financing Code of Practice, 2008 (as amended) (the "Code of Practice") within its scope.  The Regulatory Code was primarily developed by the Commission to provide guidance, through the provision of more detailed requirements, which would support the general framework established by the primary regulatory legislation.  The Explanatory Notes in the Regulatory Code expressly state that the "Regulatory Code has ... only incidental application with respect to the Proceeds of Criminal Conduct Act, 1997".

Should your Company be conducting relevant business as defined in the Anti-money Laundering Regulations, 2008, then you are NOT exempt from the requirements for internal audit.  Section 11(3A) of the Code of Practice states,  "every entity and professional shall establish and maintain an independent audit function that is adequately resourced to test compliance, including sample testing, with its or his written system of internal controls and other provisions of the Anti-money Laundering Regulations, 2008 and this Code."  There is no doubt, therefore that this is a statutory obligation imposed on each regulated entity.

For further information regarding internal audit or outsourcing of the function, please contact Kyria Ali.