Financial Crime World

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Money Laundering Risk Soars in the Virgin Islands

The Financial Services Commission (FSC) has released a recent assessment that reveals the Territory of the Virgin Islands is at a high risk of money laundering. The report highlights several vulnerabilities, including the increasing use of virtual assets and legal persons.

Anonymity Provided by Virtual Assets

The anonymity provided by virtual assets, such as cryptocurrencies, creates a significant risk of money laundering. These assets can be transmitted and used globally, making it difficult to track their origins.

Compliance Deficiencies in Financial Institutions

Compliance deficiencies within financial institutions (FIs) are also contributing to the high ML risk. FIs with inadequate anti-money laundering (AML) programs can allow suspicious transactions to occur without adequate screening or reporting.

The use of legal persons and arrangements by high-risk customers, including foreign politically exposed persons (PEPs), increases their vulnerability to being misused for money laundering purposes.

Measures to Mitigate Risks

To mitigate these risks, the FSC has implemented measures to foster risk mitigation in relation to legal persons and arrangements. However, the inherent vulnerabilities remain high.

Assessment Findings

The assessment found that the Territory’s overall ML risk is Medium-High, with the risk of money laundering emanating from both domestic and foreign criminality. A comparative analysis between the 2016 and 2020 assessments shows some degree of consistency in the level of risk identified within each sector.

International Cooperation

The report highlights the importance of international cooperation and the need for effective regulation and supervision to mitigate money laundering risks. The FSC will continue to work closely with stakeholders to ensure that the financial sector is adequately protected from ML threats.

Sources and Contact Information

Sources:

  • Financial Services Commission (FSC)
  • Financial Investigation Agency (FIA)
  • Royal Virgin Islands Police Force (RVIPF)
  • Governor’s Office
  • Attorney General’s Chambers
  • Office of the Director of Public Prosecutions (ODPP)

Contact Information:

For more information, please contact:

Financial Services Commission P.O. Box 430, Road Town, Tortola Virgin Islands, British West Indies Telephone: +1 (284) 468-6600 Fax: +1 (284) 468-6611 Email: info@fsc.gov.vg

About the FSC

The Financial Services Commission is the regulatory body responsible for regulating and supervising the financial sector in the Virgin Islands. The FSC aims to promote a stable, efficient, and sound financial system while protecting the interests of investors, depositors, and other stakeholders.