ACT NO, 7960



BILL NO. 31-0489

THIRTY-FIRST LEGISLATURE OF THE VIRGIN ISLANDS



Regular Session



2016



An Act amending title 9 Virgin Islands Code, chapters | and 25, relating to the International

Banking Center Regulatory Act and title 29, chapter 12, providing for benefits for international

financial services entities

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Be it enacted by the Legislature of the Virgin Islands:

SECTION 1. Title 9 Virgin Islands Code, chapter 25. subchapter I is amended as follows:



(a) By striking “international banking entity” wherever it appears in the chapter and inserting

“international financial services entity”;



(b) By striking “Director” wherever it appears in the chapter and inserting “Board”.



(c) Section 715 by striking “The International Banking Center Regulatory Act”, wherever

it appears in the chapter and inserting “The International Financial Services Center Regulatory Act”:



(d) Section 716 is amended as follows:



(1) subsection (b) by striking “Director of Banking and Insurance of the Office of the

Licutenant Governor” and inserting “Virgin Islands Banking Board”;



(2) by re-designating the subsections accordingly and adding a new subsection (a)

that reads as follows:



“(a) “Affiliate” means a corporation partnership, limited liability company business

trust, or any other legal organization or entity that controls, is controlled by, or is under common

control with any other of these entities.”



(3) Subsection (e) by adding the following sentence at the end of the subsection to

read: “International financial services entities include international banking entities licensed

before December 14, 2016”.



(e) Section 717, subsection (a), paragraph (5) by striking “provided in section 749 of this

title”.

(f) Section 720 is amended as follows:

(1) subsection (a), paragraph (2) by striking “$10,000” and inserting “$50,000”.

(2) Subsection (b), paragraphs (3) and (4) by striking “10” and inserting “5”;



(3) subsection (b) by designating paragraph (6) as paragraph (7) and adding a new

paragraph (6) to read as follows: “(6) Proof of the international financial services entity's

registration with Financial Crimes Enforcement Network (FINCEN).”



(4) — subsection (c) by adding a paragraph (4) to read as follows: “(4) a Federal Bureau

of Investigations fingerprint-based background check of any person who, directly or indirectly,

possesses or controls or intends to possess or control 5 percent or more in the capital of the

proposed international financial services entity.”



(5) Subsection (ce) by striking “an immediate right” and inserting “15 days”.

(g) Section 721. subsection (b) is amended as follows:



(1) paragraph (2) by inserting “an initial fee of $75,000 and” at the beginning of the

paragraph; by striking “$5,000” and inserting “$75,000”; and by striking “IBE™ where it appears

and by inserting “IFSE™; and



(2) paragraph (5) by striking “sole”.



(h) Section 726, subsection (a), paragraph (3) is amended by inserting “including factoring”

after the word “undertakings” where it first appears and by re-designating paragraph (12) as paragraph

(13), re-designating the remaining paragraph accordingly and by inserting a new paragraph (12) to read

as follows: “(12) engage in advertising, selling, provision or performance, directly or indirectly, by any

consumer reporting agency as defined in 15 U.S.C. § 1681a (f) of the Fair Credit Reporting Act. 15

U.S.C. $§ 1681 ef seg., or any affiliate or subsidiary of such a consumer reporting agency. of any product

or service relating to:



(1) consumer credit, including, without limitation, maintaining information related to

the credit history of consumers, providing to consumers credit reports, credit scores. credit

monitoring, credit education, credit enhancement, consumer education and advice for any

purpose. including, without limitation, to improve a consumer's credit records. credit history or

credit rating:



(2) identity theft and fraud protection; and



(3) the promotion, offering and provision of consumer credit or other financial

products and services, including, in connection with an application for credit by consumers.”



(1) Section 730, subsection (a), paragraph (2), is amended by striking “$10,000” and inserting

$75,000".

SECTION 2. Title 9 Virgin Islands Code, chapter 25, subchapter I is amended as follows:

(a) Section 730a is added to read as follows:



“8S 730a. Denial of a License



The Board may deny the issuance of a license or revoke a license for any one of the following

reasons:



(1) providing incorrect. misleading, incomplete or materially untrue information in the license

application;



(2) violating or failing to comply with any financial services or other applicable law, rule,

subpoena, consent agreement. or order of the Board;



(3) obtaining. maintaining, or attempting to obtain a license through material

misrepresentation or fraud:



(4) improperly withholding, misappropriating or converting any money or properties received

in a fiduciary capacity;



(5) intentionally misrepresenting the terms, benefits. value. cost. or effective dates of any

financial services permitted transaction;



(6) having been convicted of or pleaded guilty or no contest to a felony regardless of whether

a judgment of conviction has been entered by the court;



(7) having been convicted of or pleaded guilty or no contest to a misdemeanor that involves

the misuse or theft of money or property belonging to another, fraud, forgery. dishonest acts, or breach

of a fiduciary duty that is based on any act or omission relating to a financial services permitted

transaction, or that involves moral turpitude regardless of whether a judgment has been entered by the

court;



(8) having admitted or been found to have committed any unfair trade act or practice or

financial services fraud:



(9) using fraudulent, coercive, or dishonest practices, or demonstrating incompetence,

untrustworthiness or financial irresponsibility in the conduct of business in this Territory or elsewhere;



(10) having a financial services-permitted transaction license, or equivalent, denied, suspended

or revoked in any other country, state, province, district or territory;



(11) having been fined or issued an order by another country. state, province, district or

territory regulatory authority for a violation of the Currency and Foreign Transactions Act of 1970, the

Money Laundering Control Act (1986), the Anti-Drug Abuse Act of 1988, the Annunzio-Wylie Anti-

Money Laundering Act (1992). the Money Laundering Suppression Act (1994) or the Uniting and

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Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism

Act of 2001;



(12) forging or causing the forgery of another’s name to a license application or to any

document related to a permitted transaction:



(13) failing to pay income taxes in accordance with Virgin Islands and Federal laws or to

comply with any administrative or court order directing payment of income or corporate taxes in

accordance with Virgin Islands and Federal laws:



(14) failing to respond to an order or request of the Board within 15 days after the request;



(15) proving to be untrustworthy. or a source of injury and loss to the public or if the Board

considers the licensee to be so;



(16) performing or attempting to perform permitted transactions allowed under this chapter.

but that are outside the scope of the license:



(17) performing or attempting to perform transactions prohibited under this chapter;



(18) engaging in any activity for which issuance of the license could have been refused had it

then existed and been known to the Board; or



(19) engaging in any other action as determined by the Board pursuant to the laws and

regulations of the Territory that warrants the denial or revocation of a license.”



(b) Section 732 is amended:



(1) in subsection (a) by striking “7-49” and inserting “730" and by striking “he” where

it appears in the last sentence and inserting “the Board”; and



(2) in subsection (b) by striking “5,000” and inserting $5,000" and by striking

*[0,000” and inserting “$10,000”.



(c) Section 733, subsection (a), paragraph (2) is amended by striking “of maintaining” and

inserting “to maintain”.



(d) Section 735 is amended by striking “$§ | et seq”; by striking “known as the Banking’

title” and by striking “the provisions of §§ 951 et seq. of this title” and inserting “chapter 15 of title 11”.



SECTION 3. Title 9 Virgin Islands Code, chapter 25, subchapter I is amended by adding section

7335a to read as follows:



§ 735a. The International Financial Services Center Revolving Fund.



(a) There is established in the Treasury of the Government of the Virgin Islands a fund

designated us the International Financial Services Center Revolving Fund. The Commissioner of

Finance shall administer the Fund as a separate and distinct fund in the Treasury of the Government of

the Virgin Islands.

7 7)



(b) The Fund consists of an annual appropriations of not less than $75.000 to be used

exclusively for the administrative costs and the salary of a qualified financial services examiner whose

primary responsibility is to ensure that persons issued a license under this chapter comply with this

chapter. The Commissioner of Finance shall disburse monies from the Fund to the Board to pay the

salary of the examiner.”



SECTION 4. Title 9 Virgin Islands Code, chapter 25, subchapter II is amended as follows:



(a) Subsection 736, subsection (a) is amended by inserting “before the effective date of

subchapter [I after “chapter” where it first appears and by striking “chapter” where it appears in

the second instance and inserting “subchapter”.



(b) Section 737 is amended by striking “chapter” and inserting “subchapter”;



(c) Section 738 is amended in the introductory language by striking “chapter” and

inserting “subchapter”:



(d) Section 742 is amended in the introductory language by striking “title” and inserting

“chapter”;



(e) Section 745, subsection (a) is amended by striking “chapter” where it appears in the

second instance and inserting “subchapter” and in subsection (a)(1) by striking “chapter” and

inserting “subchapter”;



(f) Section 748 is amended by striking “corporation” wherever it appears in the section

and inserting “international financial services entity”;



(g) Section 749, subsection (a) is amended as follows:



(1) in the introductory language by striking “chapter” and inserting

“subchapter”;



(2) in paragraph (2) by striking “corporation” and inserting “international

financial services entity”;



(3) in (3) by striking “of ownership”; and



(4) in paragraphs (4) and (5) by striking “corporation” and inserting



“international financial services entity”.



(h) Section 749, subsection (b) is amended by striking “title 14. section 406 of the Virgin

Islands Code™ and inserting “14 V.LC. § 406”.



(1) Section 750 is amended as follows:

(a) by striking subsection (a) and inserting a new subsection (a) that reads as



follows: “(a) Any official or employee of an international financial services entity, or of a

person of which it is a unit who, on behalf of the international financial services entity

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receives any investor funds with the knowledge that the international financial services

entity is insolvent shall be fined not less than $5,000, but not more than $25,000.”



(b) Subsection (b) by striking “beneficiary” wherever it appears and by inserting

“international financial services entity”; by striking “subsection (a) of” and by striking the

last sentence;



(c) by re-designating subsections (b) and (c) accordingly and by adding new

subsections (b) and (c), and subsections (d). (e), (f). (g), (h), (i), (j), (k) and (/) to read as

follows:



“(b) Any director, official or employee of the international financial services

entity or of the person of which the international financial services entity is a unit, who

appropriates, embezzles, removes or voluntarily misuses any monies, funds. credits or

securities of an international financial services entity, or who, without due authorization,

issues or draws any certificate of deposit. draws any order or bill of exchange, carries out

any type of acceptance or assignment of a note, bond, money order, bill of exchange, and

any person who, with the same intention, aids or abets any director, official or employee

shall be fined not less than $5,000, but not more than $25,000 and may be liable to make

restitution.



(c) Any director, official, or employee of an international financial services

entity or of the person of which the international financial services entity is a unit, who

voluntarily misrepresents the financial condition of an international financial services entity

or the facts about any transaction to be undertaken, or undertaken by the international

financial services entity, or who declines to provide information rightfully requested by the

Board shall be fined not less than $5,000, but not more than $25,000.



(d) Any applicant or beneficiary who willfully makes a false or fraudulent

statement or representation as to any fact required or appropriate to the determination of the

eligibility of such applicant or beneficiary for benefits under the Code, this chapter. or the

regulations for the continuation or extension of the same, or who willfully makes or presents

any claim for benefits under the Code, this chapter or the regulations knowing the claim to

be false, fictitious or fraudulent shall be fined not more than $25,000. In addition to a fine,

the willful making of a false statements on an application may result in the rejection of the

application.



(e) If an international financial services entity violates any provision of title 29

Virgin Islands Code, chapter 12, or any rule or provision of its tax incentive benefit

certificate, or fails or refuses to perform any duty, requirement or lawful order made by the

Board, the international financial services entity is subject to a fine not to exceed $25,000

per violation.



(f) The Board shall impose a fine of not less than $5,000. but not more than

$25,000 for any violation of sections 718(a), 722. 723, 726, 729 or 740(a).



(g) | The Board shall impose a fine of not less than $10,000, but not more than

$25,000 for any violation of sections 724(a) and 727(a).

(h) The Board may impose a fine of not less than $5,000, but not more than

$25,000 for any violation of this chapter not specifically enumerated in this section. The

Board may impose a late fee of $100 per day not to exceed $10,000 per day, for each day

the international financial services entity fails to comply with an order or meet a deadline

imposed by the Board.



(i) Multiple violations of the provisions set forth in this chapter are separate

offenses and fines must be independently assessed.



(j) The waiver or the failure to assess a fine for any violation is not a waiver of

any other future or concurrent violation.



(k) In construing or enforcing any provision of this chapter, the act, omission, or

failure of any officer, agent. or person acting for or employed by any international financial

services entity, acting within the scope of employment are considered an act, omission, or

failure of the international financial services entity.



(/) In addition to the imposition of a fine, the Board may also impose any other

penalty authorized by law or under the regulations.”



(j) Section 752, subsection (c) is amended by striking “shall be” and inserting

“are” and by striking “and pursuant to”;



(k) Section 753 is repealed.



(1) Sections 751.752, and 754 are amended by striking “section 715 et seq. of

this title” and inserting “this chapter”.



SECTION 5. Title 9 Virgin Islands Code. chapter 25 subchapter II is amended by adding

a section 755 to read as follows:



Ҥ 755. Notwithstanding anything to the contrary in this subchapter, after the effective date of

section, any international financial services entity seeking tax benefits must apply to Virgin Islands

Economic Development Commission and comply with the requirements set forth in title 29 Virgin

Islands Code, chapter 12.



SECTION 6. Title 9 Virgin Islands Code, chapter 1, section 4 is amended by inserting

“international financial services entities” after “exclusively”.



SECTION 7. Title 29 Virgin Islands Code, chapter 12 is amended as follows:

(a) Section 708:



(1) subsection (a) is amended by adding a Category V to read as follows:



“Category V — International Financial Service Entity—as defined in section 703(g)":

and



(2) by adding a subsection (s) to read as follows:

“(s) Notwithstanding any other provision of this title, an applicant seeking benefits

as a Category V international financial services entity is required to comply only

with the provisions of title 9, chapter 25 and is not required to comply with any

requirement imposed in title 29, chapter 12, except those that are explicitly made

applicable to an international financial services entity.”



(b) section 717 is amended by adding a subsection (d) to read:



“(d) Upon receipt of the report and recommendation of the chief officer on an

application of an applicant, including those seeking benefits as a Category V international

financial service entity under title 29 V.LC. § 780(a), and a public hearing held after due

public notice, the Commission shall consider whether the specific requirements for such

entities as set forth in title 9, chapter 25 have met, and no other factors. If the requirements

have been met, the Commission shall grant the benefits applied for without condition. Upon

approval of a grant of benefits, the Commission shall proceed to promptly issue the tax

benefit certificate referred to in title 9, V.I.C. chapter 25, subchapter II.”



(c) Section 717a is amended by striking the introductory sentence and inserting a new

introductory sentence to read: “Except for Category V — international financial services entities, the

tax benefits that do not require the Governor's approval and are exempt from the requirement of

this section, upon the finding from the Commission that economic development benefits applied

for must be granted, the Governor shall proceed to make a determination as whether to approve the

Commission’s findings.



Thus passed by the Legislature of the Virgin Islands on December 21, 2016.



Ti



Witness our Hands and Seal of the Legislature of the Virgin Islands this S Day of



January, A.D., 2017.



Neville A. James



: President

Myron D. Jacks



Legislative Secretary

Bill No. 31-0489 is hereby approved.



by



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Witness my hand and the Seal of the



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Government of the United States



Virgin Islands at Charlotte Amalie,



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St. Thomas, thi day of January, A.D., 2017



Yai



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Kenneth E. Mapp



Governor