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Definition:

In an effort to help combat money laundering and the abuse of Belize's fledgling international financial services industry, the Government of Belize introduced the Money Laundering (Prevention) Act 1996 which became effective on 1 August 1996. Section 2(1) of the Act defines "money laundering" as:

(i) engaging, directly or indirectly in a transaction that involves property that is the proceeds of crime, knowing or having reasonable grounds for believing the same to be proceeds of crime;

(ii) receiving, possessing, managing, investing, concealing, disguising, disposing of or bringing into Belize any property that is the proceeds of crime, knowing or having reasonable grounds for believing the same to be the proceeds of crime.

Money laundering is punishable by a fine of between twenty-five thousand and one hundred thousand dollars and/or imprisonment for a term of between three and six years.

Most attempts at money laundering involve either an inducement or deception of a service provider or a member of their staff to accept deposits or the transfer of funds, securities and other negotiable instruments which are the proceeds of crime or to provide safe custody facilities for such funds or assets.

The most common form of money laundering encountered on a day-to-day basis takes the form of accumulated cash transactions that are deposited in the banking system or exchanged for valued items. Electronic fund transfer systems increase the vulnerability of the banking system by enabling the cash deposits to be switched between accounts in different names and between different jurisdictions.

The Money Laundering (Prevention) Act of 1996 creates specific procedures and standards that, when adhered to, will ensure that The BOSL Group, and the financial services industry in Belize in general, remains free of tainted funds and other assets.

Primarily, the Act requires that a "business transaction record" is maintained for each transaction undertaken by a financial services provider. This record should include, where relevant, the following information:

A financial services provider commits a criminal offence if it fails to keep a business transaction record as required by the Act.

The BOSL Group is very mindful of the fact that the potential exists for an unscrupulous or deceitful client to abuse the services it offers through its operating companies and, accordingly, has chosen to implement this anti-money laundering policy. Strict adherence to the guidelines and due diligence procedures set out herein will help to mitigate any unknowing involvement of any member of The BOSL Group, or its staff, in any such illicit activity.

Policy:

• To conduct all necessary due diligence procedures in order to ascertain the true identities of all clients and potential clients. In this way, it will not be possible to transfer any assets to any of the Group's operating companies anonymously.
• To take steps to verify that all assets transferred to any operating company are from legitimate sources in order to ensure that such assets are not the proceeds of crime.
• To ensure that all staff are aware of the need to maintain vigilance regarding all unusual transactions or series of transactions.
• Where there is reasonable suspicion that any such transactions or series of transactions constitute money laundering, to forthwith report such suspicion as provided by law.
• To scrupulously maintain the business transaction records required by law.
• To comply fully with all guidelines and regulations promulgated by the Government of Belize in an effort to maintain Belize's good reputation as an ethical financial centre committed to combating economic crimes.
• To confirm, define and conform with the established rules of good conduct in all facets of financial business.

These guidelines constitute the official policy of The BOSL Group. They will remain in force until amended by the Board of Directors of Belize Offshore Services Limited in compliance with legislation or subsidiary legislation enacted by the Government of Belize. They are, however, subject to the following conditions:

a) Except where specifically provided by the Money Laundering (Prevention) Act, or other relevant law, the Group's obligation to maintain the confidentiality of its clients' affairs continues in full force.
b) It is not the intention of these guidelines to:

• incorporate any foreign regulations (i.e. currency, fiscal or economic) into our law and thereby make them applicable to Belize (unless this is already the case under existing international treaties and the law of Belize).
• affect the current legal practice in the field of international law.
• deviate from the standard legal and fiduciary relationship which has traditionally existed between the Group and its clients.

c) These guidelines set out standard rules for avoiding money laundering activities in the conduct of the Group's business and are in accordance with the code of professional ethics; they are not intended to impede the efficient provision of services to bona fide clients.

These guidelines are intended to ensure the careful determination of a client's identity and to permit thereby the efficient accomplishment of the Group's obligation to maintain adequate business transaction records and to furnish appropriate information, as provided for under Belizean law. All such records must be kept for a minimum of five years.