VI on US 'money laundering' list- Report
“Exploitation of its offshore financial services, the unique share structure that does not require a statement of authorised capital, and the lack of mandatory filing of ownership information pose significant money laundering risks to the BVI. The BVI is a favoured destination for registering shell companies that can be established for little money in a short amount of time," it said.
According to the report, there are reports that a substantial percentage of BVI’s offshore business comes from China, which lists the VI as a jurisdiction of primary concern with regards to money laundering.
The report further noted that the VI’s Financial Services Commission (FSC) is the sole supervisory authority responsible for the licensing and supervision of financial institutions under the relevant statutes.
“The FSC’s most recent statistical bulletin was published in December 2014, reflecting data as of September 2014. The bulletin notes there are 480,932 active companies, six licensed banks, 231 other fiduciary companies, and 2,175 investment businesses and funds registered with the FSC. The banking sector has assets valued at $2.4 billion as of June 2014,” the report said.
Use of US dollar & proximity to USVI are risks
However, the report pointed to the territory’s use of the US Dollar and its close proximity to the United States Virgin Islands as posing risks for money laundering.
“Tourism accounts for 45 percent of the economy and employs the majority of the workforce; however, financial services contribute over half of government revenues. The BVI’s proximity to the U.S. Virgin Islands and the use of the U.S. dollar for its currency pose additional risk factors for money laundering. The BVI, similar to other jurisdictions in the Eastern Caribbean, is a major target for drug traffickers, who use the area as a gateway to the United States. BVI authorities work with regional and U.S. law enforcement agencies to mitigate the threats,” the report stated.
The Unites States Department of State noted that recently, BVI implemented a supervisory regime for all designated non-financial businesses and professions, including legal advisors, accountants, and dealers in precious metals and stones, as well as nonprofit organizations.
“BVI uses suspicious activity reports (SARs) rather than suspicious transaction reports (STRs). SARs, in general, relate to suspicious activities by a broad range of entities, rather than suspicious financial transactions. Therefore, the cited numbers encompass all types of suspicious activities, including those of a financial nature,” the report said.
Actions taken
It said that most penalties for anti-money laundering (AML) violations have maximums ranging from $250,000 - $500,000 when action is taken through the courts. “The FSC can impose administrative fines up to $100,000. From January through September 2014, the Enforcement Committee reviewed 96 enforcement cases, resulting in four administrative penalties, three cease and desist orders, three license revocations, and nine warning letters.”
The report said too that there is strong collaboration between BVI law enforcement and regional as well as U.S. law enforcement agencies, which has resulted in several successful operations targeting drug smuggling and drug dealing.
“There have been 24 money laundering related prosecutions and 13 convictions since 2008,” it said.
Beneficial ownership
The report noted that in June 2013, the Government of the United Kingdom announced plans for the UK and its overseas territories and crown dependencies to establish mandatory registers of beneficial ownership. “It has since indicated that such registers will be publicly available. The government of the BVI should work towards the goal of making information on beneficial ownership of offshore entities available for legitimate requests by international law enforcement and, eventually, to the public,” it said.
'There will always be suspicions'- Premier Smith
Asked about the revelations in the report regarding the VI at a press briefing yesterday March 27, 2015 Premier and Minister of Finance Dr The Honourable D. Orlando Smith said, “It is true that the BVI and other Caribbean countries are on that list. It is also true that the United States and the United Kingdom and several other major countries are on the list.”
“So what I am saying is despite all of the measures you put in place, there will be suspicious activities reported in all countries and we of course have to do our best to make sure that our laws are in place to prevent irresponsible activities on the part of whoever and that is what we are doing. That is why we have a record of having good regulations in the financial services sector. That is why the banks are being [stricter] when it comes to establishing accounts,” said Premier Smith.
Up to press time there was no response from members of the Opposition, including Virgin Islands Party Chairman Hon Julian Fraser RA (R3) and Hon Andrew A. Fahie (R1).
See report on the VI here:
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29 Responses to “VI on US 'money laundering' list- Report”
good we are doing better than some places in the us.Also remember they has lost a huge case to
extradite some of our people so they would do ant thing to tarnish our reputation.
Dont think the UK happy we are feeding ourselves also. They want us to be with our hands outstretched all the time. Another sad thing we are fighting too much among ourselves and there are those on the fence watching to pick up the spoils.
People of Virgin Islands look at our future and let us work in the best interest of the future ofbour children.
Anyyhing successful and black they want it destroyed to have ys begging but we are a proud people and will always overcome all obstacles.
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Countries/ Jurisdictions
of Primary Concern
Countries/Jurisdictions
of Concern
Other Countries/
Jurisdictions Monitored
Afghanistan
Latvia
Albania
Malaysia
Andorra
Mali
Antigua and Barbuda
Lebanon
Algeria
Marshall Islands
Anguilla
Malta
Argentina
Liechtenstein
Angola
Moldova
Armenia
Mauritania
Australia
Luxembourg
Aruba
Monaco
Bermuda
Mauritius
Austria
Macau
Azerbaijan
Mongolia
Botswana
Micronesia FS
Bahamas
Mexico
Bahrain
Montenegro
Brunei
Montserrat
Belize
Netherlands
Bangladesh
Morocco
Burkina Faso
Mozambique
Bolivia
Nigeria
Barbados
Nicaragua
Burundi
Namibia
Brazil
Pakistan
Belarus
Peru
Cabo Verde
Nauru
British Virgin Islands
Panama
Belgium
Poland
Cameroon
Nepal
Burma
Paraguay
Benin
Portugal
Central African Republic
New Zealand
Cambodia
Philippines
Bosnia and Herzegovina
Qatar
Chad
Niger
Canada
Russia
Bulgaria
Romania
Congo, Dem Rep of
Niue
Cayman Islands
Singapore
Chile
Saudi Arabia
Congo, Rep of
Norway
China, People Rep
Somalia
Comoros
Senegal
Croatia
Oman
Colombia
Spain
Cook Islands
Serbia
Cuba
Palau
Costa Rica
St. Maarten
Cote d'Ivoire
Seychelles
Denmark
Papua New Guinea
Curacao
Switzerland
Czech Republic
Sierra Leone
Dominica
Rwanda
Cyprus
Taiwan
Djibouti
Slovak Republic
Equatorial Guinea
Samoa
Dominican Republic
Thailand
Ecuador
South Africa
Eritrea
San Marino
France
Turkey
Egypt
St. Kitts and Nevis
Estonia
Sao Tome & Principe
Germany
Ukraine
El Salvador
St. Lucia
Ethiopia
Slovenia
Greece
United Arab Emirates
Ghana
St. Vincent
Fiji
Solomon Islands
Guatemala
United Kingdom
Gibraltar
Suriname
Finland
South Sudan
Guernsey
United States
Grenada
Syria
Gabon
Sri Lanka
Guinea Bissau
Uruguay
Guyana
Tanzania
Gambia
Sudan
Haiti
Venezuela
Holy See
Trinidad and Tobago
Georgia
Swaziland
Hong Kong
Zimbabwe
Honduras
Turks and Caicos
Guinea
Sweden
India
Hungary
Vanuatu
Iceland
Tajikistan
Indonesia
Ireland
Vietnam
Kyrgyz Republic
Timor-Leste
Iran
Jamaica
Yemen
Lesotho
Togo
Iraq
Jordan
Liberia
Tonga
Isle of Man
Kazakhstan
Libya
Tunisia
Israel
Korea, North
Lithuania
Turkmenistan
Italy
Korea, South
Macedonia
Uganda
Japan
Kosovo
Madagascar
Uzbekistan
Jersey
Kuwait
Malawi
Zambia
Kenya
Laos
First off tell the US go find something else to do instead of worrying about the big .the same people sayin the bvi is laundering money. have their money in our banks too crooked @$$ wh*te man on another note what happens in the bvi needs to stay in the bvi regardless if our criminals shipped drugs overseas or what ever don't let these wh*te devils dictate what we need to do to suit their needs .I'm not praising drug dealers in the territory but it's better for us to deal with our own crooks than the US white devils dealing with them. the US uses more drugs than any other country and guess what white Americans use the most and if the bvi government change their financial institutions just because the US says so the country will go broke after all the govt knows about the money laundering that's how they make money
For as long as i can remember compliance has been a moving goal post. If you take the time to read the report it is not a charge of money laundering it is just a statement of fact. We have products can be used to launder money. But we are well regulated and are a cooperative country.