Global Money Laundering Risk Assessment Reveals Medium-High Threat to Virgin Islands
Introduction
A comprehensive money laundering risk assessment conducted by the Financial Services Commission (FSC) and other stakeholders has revealed a medium-high threat to the Virgin Islands, one of the Overseas Territories of the United Kingdom. The assessment covered the period 2015-2019 and identified various vulnerabilities in financial sectors that contribute to increasing the money laundering (ML) risk.
Key Findings
- Virtual assets are being used not only as a means to pay for contraband or illicit services but also in the layering stage of money laundering to disguise the origin of illicit proceeds.
- Compliance deficiencies within financial institutions (FIs) contribute to increasing the ML risk, as inadequate anti-money laundering (AML) programs can allow suspicious transactions to occur without adequate screening or reporting.
- Strong adherence to customer due diligence (CDD), beneficial ownership (BO), and transaction recordkeeping and reporting requirements has mitigated risks to a large extent.
Comparison of Results between 2016 and 2020 Assessments
| Sector | 2016 Risk Rating | 2020 Risk Rating |
|---|---|---|
| Banking | Medium-High | High |
| Money Services | Med-Low | Med-High |
| Insurance | Low | Med-Low |
| Trust and Company Formation | Med-High | Med-High |
| Investment Funds | Medium | High |
| Insolvency Practitioners | Med-High | Med-High |
| Financing | Med-High | Med-High |
| Legal Professionals | Med-High | Med-High |
| Emerging Risk Areas | Low | Med-Low |
Recommendations
The report emphasizes the need for continued vigilance and robust AML measures to combat money laundering and terrorist financing threats. It highlights the importance of:
- Strong anti-money laundering (AML) compliance programs
- Transaction recordkeeping and reporting requirements
- Cooperation between financial institutions, law enforcement agencies, and other stakeholders
Conclusion
The overall risk of ML to the Virgin Islands is medium-high, emphasizing the need for continued vigilance and robust AML measures to combat this threat. The assessment was carried out by the FSC, led by its AML Unit, and involved stakeholders from various government agencies.
Note: Chart 1.1: Comparison of Results between 2016 and 2020 Assessments