Best Practices in Financial Crime Reporting in the U.S. Virgin Islands

A Roadmap for Improvement

A recent report highlights the strengths and weaknesses of the U.S. Virgin Islands’ anti-money laundering/combating the financing of terrorism (AML/CFT) measures, providing a roadmap for improvement.

Progress Made in Implementing AML/CFT Regulations

According to the report, which was compiled following an onsite visit in March 2023, the Virgin Islands have made significant progress in implementing AML/CFT regulations. The islands have established a well-regulated framework and a robust reporting mechanism for suspicious transactions.

Strengths of the U.S. Virgin Islands’ AML/CFT System

• Well-established regulatory framework: The report notes that the Virgin Islands have a clear and effective regulatory structure in place, which provides a solid foundation for anti-money laundering efforts.
• Robust reporting mechanism: The islands have implemented a robust system for reporting suspicious transactions, allowing authorities to quickly identify potential financial crimes.

Areas Requiring Improvement

Despite these successes, the report identifies several areas where improvement is needed:

Enhancing Customer Due Diligence Procedures

• The report recommends that the Virgin Islands enhance customer due diligence procedures to ensure a more thorough understanding of customers and their business activities.
• This can include verifying the identity of customers, assessing their risk profiles, and monitoring their transactions.

Improving Customer Identification Programs

• The report suggests that the islands improve their customer identification programs by implementing more effective measures for identifying and verifying customers.
• This can include using technology, such as biometric identification systems, to enhance customer verification processes.

Increasing Transparency in Beneficial Ownership Arrangements

• The report recommends increasing transparency in beneficial ownership arrangements to prevent anonymous shell companies from being used for illicit activities.
• This can include requiring companies to disclose their beneficial owners and providing access to this information through public registries.

Recommendations for Strengthening the AML/CFT System

The report provides several recommendations for strengthening the islands’ AML/CFT system, including:

Increasing Resources for Law Enforcement Agencies

• The report recommends that the government provide additional resources to law enforcement agencies to support their efforts in combating financial crimes.
• This can include increasing funding, providing training and equipment, and enhancing collaboration with international partners.

Providing Additional Training for Financial Sector Professionals

• The report suggests that the islands provide additional training for financial sector professionals to enhance their knowledge of AML/CFT regulations and best practices.
• This can include regular workshops, webinars, and online courses to ensure that professionals stay up-to-date on the latest developments in anti-money laundering.

Implementing a National Risk Assessment

• The report recommends that the government consider implementing a national risk assessment to identify potential vulnerabilities in the AML/CFT system.
• This can include assessing the risks associated with different industries, sectors, and geographic locations, and developing strategies to mitigate these risks.