What is an NPO?

The Non-Profit Organisations Act, 2012 (“NPO Act”) defines an NPO as a body of persons, whether incorporated or unincorporated, established solely or primarily for the promotion of charitable, religious, cultural, educational, social or fraternal purposes, or other activities or programs for the benefit of the public. It is further defined as a section of the public that raises or disburses funds in pursuance of its objectives primarily within the Territory of the Virgin Islands (“the Territory”).

NPOs are generally recognised for the vital role that they play in communities, within the Territory as well as around the world. However, they have also been globally identified as being vulnerable to activities of money laundering and terrorist financing and to a lesser extent proliferation financing. This means that criminals may try and use NPOs to move their funds through an NPO for the purposes of legitimizing those funds. Additionally, there is a risk that terrorists and/or terrorist organisations may exploit the NPO sector to raise and move funds, provide logistical support, encourage terrorist recruitment, support terrorist organisations and operations or participate in fraudulent fundraising activities for financial gains.  

This form of exploitation and abuse demoralises donor confidence and underpins the integrity of NPOs operating not only within the Territory but also globally. Therefore, the Financial Investigation Agency’s (“the Agency”) aim is to protect and preserve the NPO sector within the Territory from terrorists as well as money laundering abuse.

As such, NPOs operating within the Territory are subject to the laws relating to money laundering, terrorist financing and proliferation financing, and must ensure they remain in compliance with them.
The Financial Action Task Force (“FATF”) sets the international standard in relation to anti-money laundering and combating the financing of terrorism (“AML/CFT”). FATF Recommendation 8 and Immediate Outcome 10 refers directly to the NPO sector.

Very shortly, the Territory is expected to be assessed by the Caribbean Financial Action Task Force (“CFATF”) against the standards put forth by the FATF. This assessment will seek to test the Territory’s level of effectiveness in mitigating money laundering and terrorist financing risks. Therefore, it is of paramount importance that all NPOs understand their role and adhere to the relevant obligations placed on them.

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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