Financial Crime World

Title: Virgin Islands Strengthens Commitment to Global Fight Against Financial Crimes with New National Policy

Author: M.A. McCall, National AML/CFT Policy

Date: 2021

The Virgin Islands, a key International Financial Center (IFC), has taken a significant step in strengthening its stance against Money Laundering (ML), Terrorist Financing (TF), and Proliferation Financing (PF) with the approval of its new National Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Policy.

Table of Contents

  1. Introduction
  2. Purpose of the National AML/CFT Policy
  3. Understanding Money Laundering, Terrorist Financing, and Proliferation Financing
    • Money Laundering
    • Terrorist Financing
    • Proliferation Financing
  4. The Virgin Islands AML/CFT Regime
  5. The Virgin Islands’ Current AML/CFT Position
  6. Implementation, Monitoring, and Evaluation
  7. Approval of the National AML/CFT Policy

Introduction

The Virgin Islands recognizes the critical importance of having a robust and effective AML/CFT regime in the face of escalating global risks. As an IFC, the territory has a unique position in the global economy and trade, and as such, is committed to implementing global FATF standards.

Purpose of the National AML/CFT Policy

The primary objective of the Virgin Islands’ National AML/CFT Policy is to minimize the risks of ML, TF, and PF and ensure the territory’s compliance with international standards. It provides a framework for all relevant stakeholders to develop policies and create strategies in line with the National Policy and Strategic Objectives.

Understanding Money Laundering, Terrorist Financing, and Proliferation Financing

Money Laundering

Money laundering is the process of disguising the proceeds of criminal activity as legitimate assets or transactions. It occurs in three stages: placement, layering, and integration.

  • Placement: The process of introducing criminal money into the financial system.
  • Layering: The process of moving proceeds from one financial institution to another to obscure their original source.
  • Integration: The process of incorporating the proceeds of illegal activity into legitimate businesses or purchases.

Terrorist Financing

Terrorist financing refers to the use of funds or financial services for terrorism-related activities. It does not necessarily involve criminal proceeds and can be linked to legitimate sources such as charitable donations, foreign government sponsors, business ownership, or personal employment.

Proliferation Financing

Proliferation financing involves providing funds or financial services for the production or use of weapons of mass destruction (WMDs). It is illegal to finance or support the production or transfer of nuclear, chemical, or biological weapons and their means of delivery and related materials.

The Virgin Islands AML/CFT Regime

The Virgin Islands has a comprehensive legislative framework to counter financial crimes, including:

  • The Drug Trafficking Offences Act
  • The Criminal Justice International Cooperation Act
  • The Proceeds of Criminal Conduct Act
  • Various orders addressing terrorism and proliferation financing

The Virgin Islands’ Current AML/CFT Position

The territory identified several primary threats to its AML/CFT regime, including:

  • Criminals’ ability to avoid extradition
  • Money laundering
  • Financing of terrorism
  • Corruption within law enforcement agencies

Implementation, Monitoring, and Evaluation

The National AML/CFT Policy will be implemented through a multi-agency approach involving:

  • The Financial Services Commission
  • The Financial Investigation Agency
  • The Attorney General’s Chambers
  • The Office of the Director of Public Prosecutions
  • The Royal Virgin Islands Police Force
  • And other relevant stakeholders

Ongoing monitoring, reporting, and evaluation will ensure the policy’s effectiveness and adherence to international standards.

Approval of the National AML/CFT Policy

  • Cabinet Approval: The Cabinet of the Virgin Islands approved the adoption of the National AML/CFT Policy on [Date].
  • NAMLCC Approval: The National Anti-Money Laundering and Countering the Financing of Terrorism Coordinating Council approved the National AML/CFT Policy at its meeting held on [Date].