Financial Crime World

British Virgin Islands’ Anti-Money Laundering and Combating the Financing of Terrorism Report

Key Findings and Recommendations

The International Monetary Fund (IMF) has assessed the British Virgin Islands’ (BVI) compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. The report highlights both improvements and areas of concern.

Investigations and Confiscation

  • Limited investigations: The BVI Financial Investigation Agency (FIA) has not initiated comprehensive financial investigations to identify, locate, and seize proceeds from money laundering (ML) and predicate offenses.
  • Insufficient confiscation: Confiscation is not treated as a policy objective, and there were no investigations aiming at identifying and locating criminal assets in the jurisdiction or abroad.

Terrorist Financing

  • Low terrorist financing risk: The BVI identified and investigated a small number of terrorist financing (TF) cases but did not prosecute or convict any TF activities over the assessed period.
  • Targeted financial sanctions: The BVI has a framework to implement targeted financial sanctions (TFS) for TF and proliferation financing, but there are variances in screening by reporting entities, lack of sufficient mechanisms for identifying potential targets, and inconsistent understanding among reporting entities of legal obligations.

Non-Profit Organizations

  • Risk understanding and mitigation: The authorities have not identified the subset of non-profit organizations vulnerable to TF abuse or the specific TF threats facing the NPO sector in BVI.

Risk Understanding and Mitigation

  • Customer due diligence: Improvements in CDD measures are positive, but there are remaining obstacles that undermine effective implementation of CDD and enhanced due diligence (EDD) measures in both financial and non-financial sectors.
  • Reliance on professional business introducers: The TCSP sector relies heavily on professional business introducers for CDD and record-keeping purposes, which is permitted under the FATF Standards but has not been adequately addressed by the sector.

Recommendations

The IMF concludes that while there have been some improvements in BVI’s AML/CFT framework, serious deficiencies remain, particularly in the implementation of CDD requirements, EDD measures, and SARs. The authorities need to address these weaknesses to improve overall compliance with preventive measures.