The Caribbean Financial Action Task Force (CFATF) has published its Mutual Evaluation Report assessing the anti-money laundering and countering terrorist financing (AML/CFT) measures in the British Virgin Islands (BVI).
The 256-page report identifies several areas where the BVI needs to strengthen its regime to better mitigate money laundering and terrorist financing risks.
According to the report, the overall understanding of money laundering and terrorist financing risks among competent authorities in the BVI is “fair and narrow”. It notes that authorities view illicit activities committed abroad by foreign beneficial owners as having an insufficient nexus with the territory, and do not consider BVI entities to be directly involved in foreign predicate offenses. The report states that authorities have not demonstrated sufficient appreciation of the vulnerabilities posed by BVI legal persons and legal arrangements in potentially contributing to the concealment of foreign criminal proceeds.
“The FSC has an insufficient understanding of the inherent vulnerabilities of licensed trust and company service providers (TCSPs) when it comes to ownership and control of their clients and active BVI entities, including the complexity of the VI’s corporate formation practices and the role played by TCSPs and other gatekeepers,” the report said.
It adds, “Threats from foreign crimes that misuse VI legal persons and legal arrangements are not effectively addressed since law enforcement efforts are largely directed at investigating domestic drug trafficking threats and associated crimes.”
Other key findings stated in the report include challenges in utilizing financial intelligence, a low level of investigations and prosecutions, uneven implementation of targeted financial sanctions, weaknesses in oversight of the non-profit organization sector, and challenges with obtaining accurate beneficial ownership information.
While highlighting these shortcomings, the report notes that the devastating impacts of recent hurricanes and the COVID-19 pandemic have severely affected the BVI’s resources and capabilities to fight money laundering and terrorism financing over the past five years.
The report assesses the compliance of the Virgin Islands to 40 recommendations made by the FATF. 284 Media will explore these recommendations in detail in subsequent coverage.
View the full document here: file (cfatf-gafic.org)