the british virgin islands financial services commission (bvi fsc) has extended the moratorium on filing fees for certain statutory updates until 31 march 2026, offering continued relief to eligible entities. under the bvi business companies act (revised edition 2020), existing companies that were incorporated or continued before 2 january 2025 and are not struck off can still make the required filings under sections 41 (register of members), 43a (registration of register of members) and 96a (company to collect, keep and maintain beneficial ownership information) with a us$0 filing fee through 31 march 2026. in plain terms, these sections deal with bringing a company's core statutory records and key particulars up to date on the public register (for example, information held in statutory registers and other prescribed company details), and the moratorium lets older companies make those catch‑up filings without paying the usual fee. similarly, under the limited partnership act (revised edition 2020), existing limited partnerships that were registered or continued before 2 january 2025 and are not struck off can make the required filings under sections 53a (registration of registers of general partners and limited partners) and 53b (limited partnership to collect, keep and maintain beneficial ownership information) with a us$0 filing fee through 31 march 2026. put simply, these sections cover filing updates to prescribed limited partnership particulars and registered records, enabling existing lps to bring their filings into line at no charge while the moratorium is in place. for entities that are non-compliant with the framework they should work to ensure full compliance as quickly as possible so as not to impact any corporate good standing issues. these updates were published by the bvi fsc on 31 december 2025 through industry circular 46 of 2025. for more information, readers can consult the official notice and industry circular 46, which provide additional context on the filing framework. for further details, the official notice can be accessed here and circular 46 can be found here

on 16 december 2025, luxembourg’s commission de surveillance du secteur financier (cssf) published circular 25/900, amending circular cssf 22/811 concerning the authorisation and organisation of entities acting as uci (undertakings for collective investment) administrators. key amendment repeal of annex b: annex b of circular cssf 22/811 has been repealed. updated annual reporting instructions are available on the cssf’s website. for detailed guidance, circular 25/900 can be accessed here

the bvi financial investigation agency (returns) order, 2025, has been published, introducing a structured framework for the submission of returns by designated non-financial businesses and professions (dnfbps) and non-profit organisations (npos). this order, effective from 27 november 2025, clarifies reporting obligations and establishes a clear legal context for compliance. the order, gazetted as statutory instrument no. 99 of 2025, formalises these requirements into law. understanding its provisions is crucial for all affected entities to ensure they meet their statutory duties and avoid administrative penalties. purpose and objectives of the order the primary objective of the financial investigation agency (returns) order, 2025 (the order) is to streamline and formalise the process for submitting returns. made under the authority of section 5r of the financial investigation agency act, revised edition 2020, the order is designed to enhance the financial investigation agency's (fia) supervisory capabilities. the core purposes include: timely submission: to facilitate the prompt preparation and filing of returns by dnfbps and npos. data analysis: to enable the fia to analyse statistical data, identify compliance deficiencies, and develop informed supervisory strategies. information requests: to allow the fia to respond efficiently to statistical inquiries and other requests for information. electronic filing: to facilitate a modern, electronic system for filing returns, improving efficiency and accuracy. fulfilling obligations: to ensure the fia can meet its obligations and undertakings as a supervisory body. the order applies to all dnfbps and npos over which the fia exercises supervisory responsibility pursuant to section 5c of the act. key reporting requirements the order establishes clear and non-negotiable deadlines for the submission of returns. compliance with these timelines is mandatory for all applicable entities. who is required to file? every dnfbp and npo subject to the fia's supervision must file the relevant return. the specific requirements are detailed in schedule 1 for dnfbps and schedule 2 for npos. filing deadlines both dnfbps and npos are required to file their respective returns by 31 december each year. the return will cover the activities of the preceding calendar year. for example, the return filed by 31 december 2026, will pertain to the 2025 calendar year. this annual reporting cycle is critical for maintaining up-to-date records and facilitating ongoing risk assessment. legal context and penalties the order is not a standalone directive but is firmly rooted in the financial investigation agency act, revised edition 2020. this legislative backing gives the order its authority and defines the consequences of non-compliance. penalties for non-compliance failure to adhere to the provisions of the order constitutes a breach and exposes the dnfbp or npo to administrative penalties. these penalties are detailed in schedule 5 of the order and are designed to enforce compliance key breaches include: failure to file a return: entities that do not submit their annual return by the 31 december deadline will be liable for a fine. failure to ensure accuracy: submitting a return that contains inaccurate or incomplete information is a contravention of the order. failure to notify of inaccuracies: if an entity becomes aware of an inaccuracy in a previously filed return, it must notify the agency. failure to do so is a punishable breach. this order represents a significant step in strengthening the bvi's regulatory framework. we provide expert advice on the laws of the british virgin islands and our team is positioned to guide you through these new compliance obligations. the bvi fia (returns) order 2025 can be found here

on 16 october 2025, the european securities and markets authority (esma) released its second consolidated report on sanctions and measures imposed in member states for 2024. here are the highlights: sanctions overview: a total of 975 administrative sanctions and measures were imposed across 29 member states, with the value of fines exceeding €100 million. in 2023, the value of administrative fines where approximately €71 million. over 60 per cent of the sanctions imposed in 2024 were administrative fines. top sectors: market abuse regulation (mar) and mifid ii/mifir accounted for the highest amounts of administrative fines. france and germany imposed the highest fines, with france leading at eur 29.4 million settlements: settlement procedures accounted for 10 per cent of administrative sanctions, totalling €20m. germany issued the largest settlement fine (€12.9m) under mifid ii for algorithmic trading violations. discrepancies across member states: enforcement varied significantly, with hungary issuing the most sanctions (182), followed by greece (93) and italy (84). some member states, like slovakia, reported minimal activity, reflecting differences in market size and enforcement practices. sector-specific observations: mar: insider trading and market manipulation were the most common violations, with 259 administrative fines issued. mifid ii/mifir: organisational requirements, general principles and client information obligations were key areas of enforcement. ucits directive: 47 administrative sanctions were issued, with france imposing the highest fines (approximately €2.1 million). emerging regulations: no sanctions were reported under the markets in crypto-assets regulation (mica) or the securities financing transactions regulation (sftr), reflecting their recent implementation. trends and challenges: while the total number of administrative sanctions remained stable compared to 2023, the report highlights the need for greater convergence in enforcement practices across the eu. esma emphasises that administrative sanctions are just one tool in a broader supervisory framework. next steps: esma will continue encouraging discussions among national authorities to ensure consistent enforcement and transparency, aiming for a more integrated and effective eu financial market. esmas news release can be found here and the report here

if you are involved in the virtual assets space in the british virgin islands, you will want to pay attention to this. in november 2025 the bvi financial services commission (fsc) released circular 43, which includes a helpful faq document called "understanding virtual assets and vasp regulation". think of it as your go-to guide for navigating the regulatory requirements around virtual asset activities under the virtual assets service providers act, 2022 (vasp act), which has been in effect since 1 february 2023. what you need to know? let's break down the key points from the guidance: what counts as a virtual asset? simply put, virtual assets are digital representations of value that you can use for trading, making payments, or investing – but this doesn't include traditional fiat currencies. what activities does this cover? if you're running exchanges, handling transfers, providing safekeeping services, or offering financial services related to virtual assets, you're likely operating as a vasp. what do you need to do to stay compliant? there are three main requirements: register with the fsc – this isn't optional. follow anti-money laundering (aml) and counter financing of terrorism (cft) regulations – these are critical safeguards. appoint compliance officers and maintain robust internal controls – you need the right people and systems in place. what happens if you do not comply? operating without proper registration is potentially a criminal offence and can land you with fines of up to us$100,000 or even imprisonment. the fsc isn't messing about here. why this matters the fsc is emphasising compliance for good reason – it's all about mitigating risks like money laundering and terrorist financing and protecting the integrity of the bvi's financial system. whether you're already operating in this space or considering entering it, understanding these requirements is essential. for the full details, you can access circular 43 and the faqs directly from the fsc. need help navigating vasp regulations in the bvi? get in touch with our team for tailored guidance. for more details, access circular 43 here and the faqs here.

on 14 october 2025, the european banking authority (eba) published a comprehensive report on the growing use of white labelling in the financial services sector. this business model, where financial institutions (providers) collaborate with other entities (partners) to offer financial products under the partner's brand, is gaining traction across europe. here is a summary of the key insights: what is white labelling? white labelling is a business model which involves a financial institution creating a product or service (e.g., bank accounts, payment cards, loans) which is then branded and distributed by a partner, which could be a financial or non-financial entity. for instance, a retail chain might offer a branded credit card issued by a bank. key findings widespread adoption: over 35 per cent of surveyed banks in 2025 reported using white labelling, with applications ranging from payment services to credit products like buy now pay later (bnpl) and open banking services. diverse partnerships: non-financial entities, such as digital platforms and marketplaces, are increasingly acting as partners, leveraging their customer reach to distribute financial products. cross-border potential: white labelling is not limited to domestic markets; it is also being used to expand services across borders. opportunities cost efficiency: providers can leverage partners' infrastructure and brand visibility, reducing marketing and operational costs. expanded offerings: partners can offer a broader range of financial products without needing their own licenses. increased customer base: both providers and partners can reach new customers. financial inclusion: digital distribution can make financial services more accessible, especially regarding the geographic distribution and fee models. innovation and competition: it prompts innovation and lowers entry barriers, promoting a more dynamic financial market. risks and challenges identified by the eba transparency issues: consumers may struggle to identify the actual service provider or know whom to contact for complaints. opacity of the cost structure: consumers may receive inaccurate, incomplete, or contradictory information and the terms and conditions applicable might not be clear. fraud risks: reduced clarity in roles and responsibilities can increase vulnerability to fraud. even more, fraudulent activity may occur due to weaknesses in partner cdd or oversight practices. regulatory complexity: supervisors face challenges in monitoring these arrangements, especially when partners are non-financial entities or operate across borders. operational and reputational risks: both providers and partners may face risks due to the fragmented value chain and potential misconduct by the other party. next steps: the eba plans to: enhance supervisory convergence by integrating white labelling into the 2026 union strategic supervisory priorities. improve consumer awareness through better disclosures about the roles of providers and partners. continue monitoring the evolution of white labelling through regular assessments. eba’s press release and the reports can be found here

on 16 december 2025, luxembourg introduced draft bill no. 8669, a significant legislative proposal set to modernise the incorporation of private limited liability companies (sarls). the reform introduces greater flexibility for founders by allowing the deferred payment of the minimum share capital. this change aims to enhance luxembourg’s competitiveness by streamlining the company formation process, addressing practical hurdles such as delays in opening bank accounts due to stringent kyc/aml checks. below is a summarised overview of what this bill entails. key aspects of the proposed reform this draft bill represents one of the most practical updates to luxembourg company law in recent years. here are the essential details you need to know: deferred payment of minimum capital: the core change allows the payment of the €12,000 minimum share capital for a sarl to be deferred for up to 12 months post-incorporation. this applies exclusively to cash contributions. mandatory subscription: while payment can be delayed, the requirement to fully subscribe to the entire share capital at the time of incorporation remains unchanged. founders must still commit to the full amount from day one. scope and exclusions: the deferral is limited to the statutory minimum. any capital subscribed above €12,000 must be fully paid up at incorporation. furthermore, contributions in kind must be fully paid up at the time of formation, as is currently the case. extension to sarl-s: this new flexibility is also extended to the simplified private limited liability company (société à responsabilité limitée simplifiée - sarl-s), further lowering the barrier to entry for entrepreneurs (the minimum share capital for this type of company being €1. alignment with european practice: the reform brings luxembourg’s framework in line with several neighbouring jurisdictions, including france and germany, removing a comparative disadvantage for company formation. new safeguards and accountability with increased flexibility comes a renewed focus on accountability and creditor protection. founder liability: the liability of founders will be aligned with the stricter regime applicable to public limited companies (sas). this includes responsibility for unpaid capital contributions. suspension of voting rights: as a powerful sanction, the voting rights attached to shares for which capital calls remain unpaid may be suspended until the payment is made. enhanced transparency: companies must publish the names of shareholders with outstanding capital contributions, along with the amounts due, in their annual accounts. this ensures full transparency for third parties. next steps the legislative process is underway, with the draft bill currently under review by the luxembourg parliament and the council of state. the new rules will apply to all sarls and sarl-s incorporated after the law officially enters into force. the draft bill 8669 can be accessed here (in french).

if you manage or operate a bvi limited partnership, you should take note of an important update from the bvi financial services commission. on 19 november 2025, the fsc published circular 41, which introduces the limited partnership (financial return) order, 2025. what does this mean for you? starting from 1 september 2025, limited partnerships will need to submit annual financial returns to their registered agents. this requirement comes from section 54a of the limited partnership act (revised 2020) and is designed to enhance transparency and regulatory oversight. does this apply to your partnership? not all partnerships will need to comply with this new requirement. you may be exempt if your partnership falls into one of these categories: your partnership is already regulated under financial services legislation and submits financial statements to the commission; or your partnership files annual tax returns with financial statements to the inland revenue department when do you need to act? the first returns will be due from 1 january 2026 onwards, with the specific deadline depending on your partnership's fiscal year. where can you find more information? for complete details, you can review circular 41 and the order directly. if you have any questions about how this affects your partnership or need assistance with compliance, please don't hesitate to get in touch with us. we're here to help you navigate these changes smoothly and ensure your partnership remains compliant with the new requirements. for details, circular 41 can be found here and the order can be accessed here.

the government of bermuda, through the national anti-money laundering committee (namlc), released its 2024 national risk assessment (nra), marking the fourth such assessment. this comprehensive report evaluates bermuda's exposure to money laundering (ml) and terrorist financing (tf) risks, providing insights to strengthen national policies and private sector resilience. key findings: money laundering (ml) risks: high-risk areas: drug trafficking, foreign-sourced fraud, foreign-sourced market manipulation / insider training and foreign-sourced corruption/bribery remain the primary proceeds generated ml threats. sectoral risks: the deposit-taking, securities, trust business, corporate service provider and legal sectors are rated as having high inherent ml risks due to their international exposure and transaction volumes. emerging risks: the economic investment residential certificate (eirc) program, introduced in 2023, was assessed for the first time, receiving a medium ml high risk rating due to its potential exposure to high-value investments. terrorist financing (tf) risks: bermuda's tf threat remains low, with no evidence of domestic or cross-border tf activities. the nonprofit sector, while assessed for tf vulnerabilities, showed no significant risks. sectoral insights: digital asset businesses (dabs): rated medium-high for ml risk due to the global nature of digital assets and potential misuse for illicit activities. real estate: medium ml risk, influenced by foreign investments, including through the eirc program. nonprofit organisations (npos): low tf risk, with robust oversight and no evidence of misuse. global cooperation: bermuda continues to collaborate with international bodies to address ml/tf risks, aligning with financial action task force (fatf) standards. the findings will guide updates to bermuda's aml/atf policies, ensuring the jurisdiction remains resilient against evolving financial crimes. for more information, the report can be found here and the press release here

on 18 november 2025, the european supervisory authorities (eba, eiopa, and esma) officially designated critical information & communication technology (ict) third-party providers (ctpps) under the digital operational resilience act (dora). this milestone strengthens the eu's financial sector's operational resilience by ensuring robust oversight of key ict service providers. key highlights: role of ctpps: these providers deliver essential ict services, including infrastructure, business, and data services, to financial entities across the eu. they have a pivotal role in maintaining the financial ecosystem's stability. objective of the dora oversight framework: promote the sound management of ict risk by the critical providers through direct oversight engagement the dora framework mandates the european supervisory authorities to oversee ctpps, ensuring they implement effective risk management and governance practices. this oversight aims to mitigate ict risks and safeguard the eu financial sector's operational resilience. the european supervisory authorities will continue engaging with designated ctpps through ongoing examinations to uphold these standards. for further details, refer to esma’s news release, here and the list of designated ctpps, here

on 19 december 2025, luxembourg’s commission de surveillance du secteur financier (cssf) published circular 25/901, which became effective the same day. this circular, streamlines and modernises the regulatory framework for luxembourg's investment funds. by consolidating previous circulars and aligning provisions with practical experience, it establishes a unified and coherent set of rules for specialised investment funds (sifs), investment companies in risk capital (sicars), and part ii undertakings for collective investment (ucis). this initiative not only simplifies compliance but also ensures that the regulatory environment remains adaptable to the diverse needs of investors and market participants. key highlights include: scope: applies to sifs, sicars, and part ii ucis, excluding certain fund types such as eltifs and mmfs. investment rules: clarifies asset concepts, risk-spreading principles, and investment limits, with flexibility for well-informed or professional investors. transparency: mandates clear, accurate disclosures in sales documents, covering investment policies, risks, and redemption terms. borrowing & techniques: sets borrowing limits and provides guidelines for efficient portfolio management techniques. sicar-specific rules: defines risk capital criteria, emphasising development intent, specific risks, and exit strategies. a notable feature of the circular is its emphasis on flexibility and investor-centric provisions. for instance, it allows for tailored investment limits and derogations based on the type of investor, such as well-informed or professional investors, while maintaining robust risk-spreading principles. additionally, the circular underscores the importance of transparency, requiring detailed and accurate disclosures in sales documents to enable investors to make informed decisions. this includes clear guidelines on investment strategies, risks, redemption terms, and borrowing limits, ensuring that funds operate with a high degree of accountability and investor protection. by addressing key areas such as risk capital criteria for sicars, the use of portfolio management techniques, and the treatment of borrowing, the circular reflects the cssf's commitment to fostering a dynamic yet secure investment environment. it also provides transitional provisions to ensure a smooth implementation for existing funds, reinforcing its role as a forward-looking regulatory instrument designed to support the growth and stability of luxembourg's investment fund industry. the circular 25/901 can be found here

the european union has intensified its sanctions against russia's "shadow fleet" in response to its ongoing aggression against ukraine. two recent measures highlight the eu's commitment to curbing russia's revenue streams and addressing its violations of international law. 1. sanctioning 41 vessels of the shadow fleet on 18 december 2025, the eu imposed restrictive measures on 41 additional vessels linked to russia's shadow fleet. these vessels are accused of circumventing the oil price cap mechanism, supporting russia's energy sector, transporting military equipment, or facilitating the theft of ukrainian grain and cultural goods. the sanctions include a port access ban and restrictions on maritime services. this brings the total number of designated vessels to nearly 600. the eu has reaffirmed its readiness to adopt further measures to pressure russia and its shadow fleet operations. 2. targeting 9 shadow fleet enablers on 15 december 2025, the eu also sanctioned five individuals, and four entities involved in supporting russia's shadow fleet. these include businessmen linked to major russian oil companies, such as rosneft and lukoil, and shipping companies based in the uae, vietnam and russia. the sanctions involve asset freezes, travel bans and prohibitions on eu citizens and companies providing funds to the listed parties. these measures aim to disrupt the shadow fleet's operations, which involve concealing the origin of russian oil and engaging in high-risk shipping practices. the press releases can be found here and here

the sanctions (miscellaneous amendments) (overseas territories) order 2025 (the order) was published on 12 december 2025 and came into force on 11 december 2025. this updates the sanctions framework that applies across uk overseas territories (ukots), including the british virgin islands, cayman islands. the changes are also relevant to, by local extension, to bermuda. an understanding of these changes are important for businesses based in the ukots to ensure they remain compliant and avoiding regulatory issues. the order ensures that sanctions regimes in the ukots remain aligned with developments under uk domestic legislation. the order updates various existing sanctions orders to reflect recent changes made to uk sanctions regimes under the sanctions and anti-money laundering act 2018. specifically, it implements the modifications introduced by the sanctions (eu exit) (miscellaneous amendments) (no. 2) regulations 2024 in the ukots. the key updates are as follows: 1. multiple sanctions regimes updated the order introduces tailored updates across a wide range of uk/ukot sanctions regimes, including those targeting venezuela, north korea, russia, iran, syria, and global anti-corruption measures. these amendments are designed to close gaps and ensure consistency. 2. better information sharing one of the main themes is enhanced financial transparency. new provisions allow relevant public authorities in the ukots to share information with the governor or an authorised officer. this strengthens the information-sharing framework needed for effective sanctions enforcement. 3. paying statutory obligations whilst under sanctions the order clarifies how "required payments" work. it creates explicit exceptions to asset-freeze rules for payments that a designated person must make under ukot law. this covers payments to: government departments customs and revenue authorities company registrars financial regulators land authorities consolidated funds importantly, the amendments also allow a designated person to reimburse a non-designated person who has made such a payment on their behalf. this practical change ensures that routine legal obligations can be met without accidentally breaching asset-freeze rules. 4. keeping up with the modern economy: cryptoassets and art the order significantly expands the definition of "relevant firm" across numerous sanctions schedules to reflect modern business realities. the updated definition now includes: cryptoasset exchange providers – firms that exchange cryptoassets for money or other cryptoassets custodian wallet providers – firms that safeguard cryptoassets or private cryptographic keys for customers art market participants – firms trading in or acting as intermediaries for art sales worth €10,000 or more insolvency practitioners – persons administering insolvency proceedings letting agents – firms carrying out letting agency work reporting to the governor amendments have been made to direct reporting obligations towards the governor rather than the treasury in specific contexts. this streamlines the administrative process and clarifies who is responsible for oversight in the ukots. insolvency proceedings the order clarifies the rules around insolvency. it sets out specific conditions under which actions related to insolvency and restructuring proceedings involving a designated person can occur. the key safeguard remains: any payments made directly or indirectly to a designated person must be credited to a frozen account. this order ensures that ukots maintain consistency with the uk's evolving sanctions framework, reinforcing the global effort to address issues like terrorism, corruption, and human rights abuses. what should firms do next? given the expansion of relevant firm definitions and adjusted reporting lines, organisations with activities or structures in the ots should review their sanctions screening and reporting processes. if you need support or guidance in navigating these changes, our team is available to assist. sanctions (miscellaneous amendments) (overseas territories) order 2025 can be accessed here.

on 3 december 2025, the department for international tax cooperation (ditc) announced the activation of the country-by-country reporting (cbcr) functionality on the ditc portal. this functionality is effective as of 3 december 2025. this update is critical for multinational enterprise groups (mne groups) with cayman islands constituent entities (ces). re-registration deadline: the ditc previously advised (on 29 august 2025) that all mne groups were required to re-register with the tax information authority (tia) via the ditc portal by 30 november 2025, prior to filing cbc reports. key requirements: consider classification: every entity resident in the cayman islands must determine whether or not it is a ce of an mne group. filing obligations: ultimate parent entities (upes) resident in the cayman islands with consolidated group revenue of usd 850 million or more in the preceding fiscal year must file a cbc report. surrogate parent entities (spes) resident in the cayman islands where the upe is not required to file in its jurisdiction or where there is not automatic exchange agreement in place with that jurisdiction. reports must include jurisdictional data on revenue, taxes, employees, assets, and other financial metrics, adhering to the oecd xml schema guide. filing deadlines: standard deadline: 12 months post the fiscal year-end. extension: for filings due between 31 july 2025, and 31 december 2025, the deadline is extended to 27 february 2026. resources and support: updated guidelines are available on the ditc website. queries can be directed to portal@gov.kyby authorised contacts only. ditc’s press release can be found here. for further details, access the ditc portal at https://ditcportal.secure.ky/login. our previous blog post on this matter can be accessed here

the cayman islands monetary authority (cima) has officially implemented the virtual asset service providers (vasp) financial returns form, effective 1 december 2025. this form, accessible via the reefs system under code vfr-051-84, standardises the submission of periodic financial data for entities registered or licensed under the virtual asset (service providers) act (2024 revision). key details include first deadline: 31 december 2025, for the reporting period ending 30 september 2025. mandatory submission: timely and accurate completion is required; no extensions will be granted. for ease of reference, all reefs forms completion guides can be accessed here. vasps are reminded that the timely and accurate submission of financial returns is a condition of ongoing registration or licensing and is an integral component of cima’s risk-based supervisory framework. cima’s notices can be found here and here.

on 3 december 2025, the european commission officially added russia to its list of high-risk jurisdictions with strategic deficiencies in anti-money laundering (aml) and counter-terrorist financing (cft) frameworks. this decision follows the adoption of delegated regulation (eu) 2025/1393, which aims to amend and assess the eu aml list based on a review of third countries not listed by the financial action task force (fatf) but whose membership is suspended. the eu commission’s technical assessment conducted using established methodologies and input from public sources, member states’ competent authorities and the european external action service, concluded that russia meets the criteria for high-risk designation. consequently, under the 4th anti-money laundering directive (4amld), eu entities must now apply enhanced vigilance in transactions involving russia to safeguard the integrity of the eu financial system. the delegated regulation will take effect following a one-month scrutiny period by the european parliament and the council, extendable by an additional month. the eu commission will continue monitoring listed countries and relevant developments. for further details, refer to the eu commission’s press release here.

on 3 december 2025, the european commission put forward a comprehensive package of legal proposals designed to address ukraine's ongoing budgetary and defence requirements for the years 2026 and 2027. these measures are presented as a strategic investment in european security and a mechanism to facilitate a fair and sustainable peace. the proposals aim to provide flexible and effective financial support, adaptable to the evolving situation in ukraine. the framework is built upon two primary solutions, underpinned by a set of five legal proposals. two proposed financing solutions the european commission has detailed two potential solutions to structure the financial assistance: eu borrowing: this solution would leverage the eu budget's "headroom" to secure funds. reparations loan: a novel instrument, the reparations loan, would empower the eu commission to borrow against the cash balances held by eu financial institutions that originate from immobilised russian central bank assets. these proposals are structured to operate in full compliance with european and international law, while also safeguarding the integrity of the union's financial market and the global status of the euro. legal and protective safeguards recognising the complexities involved, the package incorporates significant safeguards which seek to protect eu member states and financial institutions from potential retaliation measures. in particular, such safeguards include a so-called “solidarity” mechanism, which can be supported by either bilateral national guarantees or the eu budget itself, to cover any residual risk. key features of the package the proposed legislative package comprises the following key elements: a proposed regulation to formally establish the reparations loan. a proposal to prohibit the transfer of immobilised russian central bank assets back to russia. two joint proposals to amend council regulation 833/2014, introducing critical safeguards with respect to reparations loan. proposed amendment to the current multi-annual financial framework (mff) to permit the use of the eu budget to underpin a loan to ukraine, which could facilitate either of the two proposed solutions. these measures are designed not only to support ukraine's state functions and sovereignty but also to increase the cost of the ongoing conflict for russia, thereby creating a stronger incentive for engagement in peace negotiations. the european council is expected to deliberate on these proposals and establish a clear path forward in its upcoming session on 18-19 december 2025. we are following these matters closely and will post a further blog in due course. for more details, you can access the full press release here.

the bvi financial services commission (fsc) announced a temporary measure to help registered agents manage the current high volume of regulatory filings. on 26 november 2025, the fsc published circular 44, which grants overseas offices of registered agents temporary access to the virrgin lite platform for beneficial ownership and related filings throughout december 2025. what does this mean for registered agents? this initiative is designed to increase filing capacity during a period of high regulatory demand, whilst maintaining the integrity of the system. from 1 december to 31 december 2025, overseas offices will be able to submit beneficial ownership (bo), register of members (rom), register of limited partners (rolp), and register of general partners (rogp) filings directly through virrgin lite. who is eligible? each registered agent or affiliated entity can nominate up to 10 approved users for access. for security purposes, access will be limited to 3 static ip addresses per organisation. it's important to note that whilst overseas offices will have direct access, the bvi offices of registered agents remain fully responsible for user management, training, and ensuring compliance. how to apply the application process is straightforward: submit a virrgin lite subscription application provide user details, static ip addresses, and confirmation of local oversight via email to bo@bvifsc.vg ensure all required information is complete to avoid processing delays as an added benefit, the fsc has waived application fees for external access during this temporary period. important considerations the fsc will actively monitor usage throughout the access period and reserves the right to revoke access if necessary. this underscores the importance of maintaining proper oversight and compliance standards. for more information, circular 44 can be accessed here

on 27 november 2025, the cayman islands published two pivotal regulations aimed at improving global tax transparency: the crypto-asset reporting framework (carf) and amendments to the common reporting standard (crs). effective 1 january 2026, these regulations are designed to combat tax evasion and the misuse of virtual assets. on 27 november 2025, the cayman islands published two pivotal regulations aimed at improving global tax transparency: the crypto-asset reporting framework (carf) and amendments to the common reporting standard (crs). effective 1 january 2026, these regulations are designed to combat tax evasion and the misuse of virtual assets. the carf introduces automatic exchange of information on crypto-asset transactions, covering payment tokens (e.g., bitcoin, stablecoins), utility tokens, certain non-fungible tokens (nfts), and security tokens. meanwhile, the crs amendments expand its scope to include electronic money products, central bank digital currencies, and indirect crypto-asset investments. entities subject to these frameworks will begin reporting 2026 data in 2027, marking a significant step in aligning the cayman islands with international tax compliance standards. the two regulations, tax information authority (international tax compliance) (crypto-asset reporting framework) regulations, 2025 and tax information authority (international tax compliance) (common reporting standard) (amendment) regulations, 2025 introduce significant updates to the cayman islands' tax compliance framework. below is a summary of key provisions: crypto-asset reporting framework regulations, 2025 this regulation establishes a comprehensive framework for the automatic exchange of information related to crypto-assets, aligning with international standards set by the organisation for economic co-operation and development (oecd). key highlights include: scope and definitions cayman reporting crypto-asset service providers: entities or individuals providing crypto-asset exchange or transfer services in the cayman islands for or on behalf of customers, including making available a trading platform. relevant crypto-assets: digital assets excluding central bank digital currencies and specified electronic money products. reportable users: crypto-asset users or controlling persons residing in jurisdictions with which the cayman islands has reporting agreements. reporting and due diligence obligations providers must establish written policies to identify users' tax residency(ies) and comply with due diligence procedures, and must keep records of these written policies and procedures. self-certifications must be collected from users to determine their tax residency(ies) by 1 january 2027 and (from 2 january 2027) prior to or upon establishing a relationship with a user. annual returns must be submitted by 30 june 2026, detailing reportable transactions including acquisitions, disposals and transfers of crypto-assets. if there are no reportable transactions or the provider has submitted a return in another jurisdiction, the provider must submit a nil return. compliance and monitoring the tax information authority (tia) is empowered to monitor compliance, request records, and impose penalties for non-compliance. providers must retain records for at least six years and ensure the accuracy and adequacy of submitted information. offences and penalties offences include false self-certifications, tampering with information, and hindering the authority's functions. penalties range from fixed fines to daily penalties for ongoing contraventions, with a maximum cap of $50,000. common reporting standard (amendment) regulations, 2025 this amendment updates the existing crs framework to enhance the reporting and due diligence requirements for financial institutions. the amendments take effect on 1 january 2026, with transitional provisions for pre-existing accounts and reporting obligations. key amendments include: reporting and compliance financial institutions must submit annual returns and compliance forms by 30 june of each year, detailing reportable accounts and transactions during the previous calendar year. self-certifications must include comprehensive information, such as tax residency, tins, and account details, for both individual and entity account holders. monitoring and enforcement the tia is authorised to verify the classification of entities and ensure the adequacy of reported information. institutions must retain records for six years and correct any inaccuracies identified by the tia. penalties and appeals enhanced procedures for imposing penalties, including breach notices and penalty notices. automatic stay on enforcement of penalties during appeals, ensuring fairness in the compliance process. definitions and scope expanded definitions for terms such as "accurate," "adequate," and "current" to ensure clarity in reporting obligations. inclusion of a definition for “change of circumstances”. inclusion of crypto-assets and specified electronic money products within the crs framework. tax information authority (international tax compliance) (common reporting standard) (amendment) regulations, 2025 can be access here tax information authority (international tax compliance) (crypto-asset reporting framework) regulations, 2025 can be found here the press release can be accessed here

the global regulatory landscape for digital assets is constantly evolving. for entities operating within the crypto space, staying ahead of these changes is paramount. recent amendments to the common reporting standard (crs) by the oecd have significant implications for bvi crypto funds. understanding these updates is crucial for ensuring compliance and making informed strategic decisions. the amendments have expressly expanded key definitions to bring crypto assets into the fold. this means that many bvi and other offshore crypto funds will now find themselves classified as "investment entities" and, consequently, as reporting financial institutions under the crs. what does this mean for your fund? it means new registration, due diligence, and reporting obligations. the expanded "investment entity" test a bvi crypto fund will likely be classified as an "investment entity" if it meets one of two tests. the business activity test: this applies if the fund's primary business activity involves investing, administering or managing "relevant crypto-assets" on behalf of others (type (a). this captures most collective investment vehicles, such as hedge or crypto funds. "primarily" generally means at least 50% of gross income is derived from these activities. the gross income and management test: this applies if the fund's gross income is primarily from investing or trading in relevant crypto-assets and it is managed by another financial institution (like a licensed investment manager) (type (b)). given these broad criteria, a bvi crypto fund will almost certainly be classified as an investment entity. relevant crypto-assets are now "financial assets" the core change is that the definition of "financial asset" under the crs now explicitly includes any interest in a "relevant crypto-asset". this removes previous ambiguity and firmly brings entities dealing primarily in crypto-assets under the same global tax transparency standards as those dealing in traditional finance. bvi implementation and practical consequences the bvi implements the crs through its mutual legal assistance (tax matters) act. this requires all bvi financial institutions, including investment entities, to comply. there are no exemptions for crypto funds. the practical consequences for a bvi crypto fund classified as a reporting financial institution are significant: crs registration: the fund must register with the bvi's international tax authority (ita) through the bvi fars portal. due diligence: it must implement procedures to identify the tax residency of all investors (account holders) and their "controlling persons," which involves collecting and validating self-certification forms. annual reporting: the fund must report detailed information on its reportable investors to the ita by 31 may each year. this includes investor details, account values, and gross proceeds. distinguishing crs from carf it is crucial to differentiate the crs from the new crypto-asset reporting framework (carf). carf targets entities that provide crypto exchange services "as a business," such as exchanges and brokers. a bvi crypto fund that simply invests in digital assets is not providing these services. therefore, it is highly unlikely to be a carf reporting entity. in fact, investment entities under crs are generally "excluded persons" for carf purposes. the fund's obligations will fall under the enhanced crs, not carf. the path forward the crs amendments leave little doubt: most bvi crypto funds are now reporting financial institutions with mandatory compliance obligations. fund managers must act to assess their status, register with the ita, and implement robust systems for due diligence and annual reporting. for further guidance and support, the harneys team is here to provide the expert legal guidance needed to navigate these changes and ensure your fund remains fully compliant.