V.I. Code tit. 9, § 726 (2019)
2019 US Virgin Islands Code|Title 9 - Banking|Chapter 25 - International Banking Center Regulatory Act|Subchapter I - International Banking Entities|§ 726. Permitted transactions; prohibited transactions

 (a) Upon receipt of a license to operate an international financial services entity under section 721, an international financial services entity may: (1) accept transaction-related funds from foreign persons in accounts as well as demand or fixed term deposits and interbank deposit of funds. For purposes of this chapter, “transaction-related funds” means moneys, funds, credits, securities or properties accepted by an international financial services entity in connection with a loan or other transaction, good or service provided by the international financial services entity under this chapter; (2) accept or provide wholesale or retail repurchase agreements, or otherwise borrow money from international financial services entities and from any foreign persons, subject to any regulations adopted by the Board. (3) make, procure, place, arrange, guarantee, secure, bond, or service, loans or other financial undertakings including factoring; provided, that none of such loans or financial undertakings may be granted to a domestic person, except as provided in paragraph (3) of this subsection, and in the case of financial securities for debt, issue transactions in the Virgin Islands; (4)  (A) issue, confirm, give notice, negotiate or refinance letters of credit; if the client and the beneficiary requesting the letter of credit is not a domestic person, or (B) issue, confirm, give notice, negotiate, or refinance letters of credit in transactions for the financing of exports, even if the beneficiary is a domestic person. (5) engage in money services, money transmission, payment services, bill-payment services, payment systems, check cashing, sale of instruments or other payment devices, currency exchange, or other financial and business management services, including, without limitation, providing, discounting, rediscounting, dealing or otherwise trading in money orders, stored value, bills of exchange, drafts, or other instruments or payment devices, provided that the purchaser, payee, or beneficiary is not a domestic person. (6) Invest securities of the Government of the Virgin Islands, its public agencies and instrumentalities, its municipalities, and its political subdivisions, or in other local securities, if there exist any, exempted from the payment of taxes in the Virgin Islands; make commercial loans in excess of $1,000,000 made to Virgin Islands borrowers or borrowers in the Virgin Islands that (i) have been rejected by, or not approved within 30 days from the date a written loan application has been made to, any licensed Virgin Islands financial institution; or (ii) bear interest at an interest rate of not less than five percentage points above the Federal Home Loan Mortgage Corporation’s posted yield on the last business day of the month on thirty-year standard conventional fixed-rate mortgages committed for delivery within sixty days, rounded to the nearest one-fourth percent, which rate must take effect on the first day of the immediately subsequent month and continue in effect for the remainder of the month, and apply to all commitments made by a beneficiary during such month; make capital contributions in excess of $1,000,000 made to Virgin Islands business entities or business entities in the Virgin Islands; (7) carry out any banking transactions permitted by this chapter in the currency of any country, or in gold or silver, and participate in foreign currency trade. (8) underwrite, issue, distribute, and otherwise deal in securities, notes, debt instruments, drafts, bills of exchange, issued by the international financial services entity, or by a foreign person, for final purchase by a person outside of the Virgin Islands; (9) engage in insurance brokerage for risks or objects that reside, are located or that will be executed outside of the Virgin Islands, subject to regulations established by the Board. (10) underwrite insurance for risks or objects that reside, are located or that will be executed outside of the Virgin Islands, subject to regulations established by the Board. (11) engage in trade financing of import, export, barter and exchange of raw materials and finished products activities with domestic persons, when the Board has determined through regulations or order, that the international aspects of the underlying transaction override any involvement of the local financial and business community, and that such activities would be appropriate for the international financial services entity; (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 et seq., 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. (13) engage in any activity of a financial nature for clients outside of the Virgin Islands which would be allowed to be done, directly or indirectly, by a bank holding company or by a foreign office or subsidiary of a United States bank under applicable United States law. (14) after obtaining a special permit from the Board, act as fiduciary, executor, administrator, registrar of stocks and bonds, property custodian, assignee, trustee, agent or in any other fiduciary capacity; but, such fiduciary services may not be offered to, nor inure to the benefit of domestic persons; (15) acquire and lease personal property to a person who is a foreign person, including any transactions, at the request of a lessee or seller/lessee who is a foreign person, pursuant to a financial lease agreement, rent-to-own, or sale/leaseback agreement, subject to any regulations adopted by the Board. (16) buy and sell securities and non-life insurance annuities for clients outside the Virgin Islands, and provide investment advice in relation to such transactions or separate therefrom, to such persons, and in addition offer these services and products to the Government of the Virgin Islands and any of its instrumentalities, agencies, and investment vehicles. (17) act as a clearinghouse in relation to financial contracts or instruments of foreign persons, subject to any regulations adopted by the Board. (18) organize, manage and provide management services to international financial entities, such as investment companies and mutual funds, on the condition that the stock or participation in the capital of such companies is not distributed directly by the international financial services entity to domestic persons. (19) engage in such other activities as are expressly authorized by the regulations or order of the Board, or are incidental to the execution of the services authorized by this chapter and the regulations of the Board; (20) participate in the granting and securing of loans that originate or are secured by the Economic Development Authority of the Virgin Islands or for the University of the Virgin Islands Research and Technology Park. (21)  (A) establish, with the Board’s authorization, branches outside of Virgin Islands, in the United States mainland and its possessions, or in other foreign countries. The Board may provide, through regulations, the procedure to obtain the authorization, and the amount payable for application investigation expenses and annual quota fees for each one of the branches. (B) The International Financial Services Entities are authorized to establish a service unit or office in the Virgin Islands, in which only specific operations related to the services of the international financial services entity are conducted, in the manner and form provided through regulations, but by no means may the service unit or office constitute a branch. (22) With the prior authorization of the Board, provide to other international financial services entities or to foreign persons or entities outside of the Virgin Islands, those services of financial nature, as these are defined and generally accepted in the banking industry of the United States and the Virgin Islands and which are not listed in this section. This paragraph does not apply to activities otherwise authorized by this chapter. (23) The Virgin Islands international financial services entities may conduct their permitted activities on the Internet. If the international financial services entities use a computer server located in the Virgin Islands, the transaction is considered to occur in the Virgin Islands and venue for any disputes must be in the local and federal courts of the Virgin Islands. (b) The international financial services entity may not: (1) accept funds or borrow money from domestic persons, except from the Economic Development Bank of the Virgin Islands, and from other international financial services entities. (2) make, procure, arrange, place, guarantee, secure, bond, or service, loans or other financial undertakings, unless all loan proceeds are to be used outside of the Virgin Islands, with the exception of the cases permitted in paragraphs (20) and (21) of subsection (a) or subsection (e). (3) issue, confirm, or give notice of letters of credit, unless all proceeds of the letter of credit are to be used outside of the Virgin Islands, and that both the issuer and the beneficiary are foreign persons, with the exception of export financing transactions in which the beneficiary is a domestic person. (4) discount bills of exchange, unless all the proceeds of the bills of exchange would be used outside of the Virgin Islands and that both, the drawer and the beneficiary, are foreign persons. (5) purchase or hold any of its own capital stock, or the capital stock of or the interest in the capital of the person of which it is a unit, except when previously authorized by the Board. (6) grant any kind of financing or credit to any of its directors, officers, employees or stockholders, except when previously authorized in writing by the Board. (7) directly or indirectly place, underwrite, insure or reinsure risks or objects that reside, are located or will be executed in the Virgin Islands, or participate in reciprocity or retrocession arrangements or agreements covering or relating to such risks or objects, or assign insurance to, or assume reinsurance from any insurer authorized to do or who is doing insurance business in Virgin Islands. (c) An international financial services entity that is a unit of another person shall segregate and keep separated all transactions made or conducted by the unit, from every other transaction made or conducted by the person of which the international financial services entity is a unit. (d) Each activity authorized by this section includes transactions whether for commercial, business, investment or agricultural purposes, or for personal, family or household purposes. (e) In connection with the making, procuring, placing, arranging, guaranteeing, securing, bonding, or servicing, of any loan or other financial undertaking by an international financial services entity, the international financial services entity may require and accept as security any type of property, whether provided by the borrower or a third person, including, without limitation, any real property or personal property purchased with the proceeds of the loan or other financial undertaking by the international financial services entity, and without requiring any adjustment to the principal balance of the loan or other financial undertaking for interest or other purposes. However, in connection with any loan or financial undertaking in which security for the loan or financial undertaking is purchased or acquired with proceeds of the transaction, the borrower or third person shall provide a written certification that it considers the use of proceeds for purposes of security for the loan or financial undertaking to be beneficial to the borrower or third person. (f) The international financial services entity shall disclose in advance if a certain type of account or service is not insured by providing a notice in language substantially similar to the following: “THIS [SPECIFY TYPE DEPOSIT ACCOUNT OR SERVICE] IS NOT INSURED”. (g) In connection with the activities of an international financial services entity under this chapter, the Board may establish reasonable regulations and reporting requirements with respect to an international financial services entity’s compliance with any applicable federal anti-money laws of the United States, including, without limitation, the following: the Bank Secrecy Act (31 U.S.C. § 5311 et seq.), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, Pub. L. No. 107-56,115 Stat. 272. In order to limit additional costs to the Virgin Islands Government, the Board shall outsource anti money laundering due diligence compliance programs to Virgin Islands companies, and the international financial services entity is responsible for paying any reasonable costs, as determined by the Board, associated with such compliance.