Financial Crime World

Virgin Islands Exposed to Money Laundering Risks due to Lack of Resources, Policies

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A recent assessment has revealed that the Virgin Islands is vulnerable to money laundering (ML) risks due to sub-optimal levels of resourcing, lack of proper policies and procedures, inefficient data maintenance, and insufficient training.

Vulnerabilities in National Operational Framework

The report highlights several vulnerabilities within the national operational framework, including:

  • Potential corruption within specific agencies
  • Failure to carry out investigations
  • Limited strategic and operational analysis
  • Dissemination of intelligence
  • Lack of prioritization of ML cases

The assessment identified inherent vulnerabilities in legal persons and arrangements, such as:

  • Complex structures
  • International financial transactions that heighten the risk of being used for ML purposes
  • Potential to conceal the source of assets and the identity of beneficial owners
  • Use by high-risk customers

Emerging Products and Technologies with High ML Risk

The report noted that emerging products and technologies, such as:

  • Gaming and betting
  • Medical cannabis
  • Decentralized finance (DeFi) instruments
  • Virtual assets

have significantly high inherent ML risk and pose a heightened ML risk.

Vulnerabilities in Financial Institutions Sector

The assessment identified vulnerabilities in the financial institutions sector, including:

  • Lack of customer due diligence (CDD) on non-resident customers
  • Limited monitoring of transactions
  • Inadequate reporting of suspicious transactions

Recommendations to Mitigate Risks

To mitigate these risks, the report recommended measures such as:

  • Improving data maintenance and sharing
  • Enhancing training for officials
  • Implementing more effective policies and procedures
  • Increasing transparency and cooperation between agencies to prevent ML

The Virgin Islands government has been urged to take immediate action to address these vulnerabilities and ensure that its financial system is not exploited by criminals.