Financial Crime World

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Money Laundering Risk Assessment: Observations on Sectors at Risk

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Background

The Virgin Islands’ Money Laundering Risk Assessment (NRA) has been conducted for the period 2015-2019, covering various sectors including banking, money laundering, insurance, trust and investment services, insolvency and financing, legal and emerging risks.

Sector Analysis

Factors Contributing to Risk

The following factors contribute to the risk levels in each sector:

  • The Virgin Islands has a relatively low crime rate and is politically stable.
  • However, the Territory’s borders are porous, which lends to more nefarious activities such as drug and people smuggling.
  • The primary sectors generating economic activity and revenue are tourism and financial services.

Sectors at Risk

Based on these factors, we can make some observations about the risk levels in each sector:

Financial Services

  • This sector contributes approximately 22.6% of the Territory’s GDP.
  • Given its high economic activity, it may be more vulnerable to money laundering risks.

Banking

  • As a key component of financial services, banking is likely to be a significant area for money laundering risk.

Insurance

  • The text does not provide specific information about the insurance sector, but its connection to financial services suggests that it may also be at risk.

Trust and Investment Services

  • These sectors are often associated with high-net-worth individuals and businesses, which can make them vulnerable to money laundering risks.

Expected Risk Levels

Considering these observations, we would expect the chart to show a relatively higher level of risk in sectors like banking, insurance, trust and investment services, given their connection to financial services and high economic activity.