Financial Crime World

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Virgin Islands Money Laundering Risk Assessment Reveals Key Findings

A recent report by the BVI Financial Services Commission’s AML Unit has shed light on the vulnerabilities associated with products and services in the Virgin Islands. The assessment, which focused on client transactions, product vulnerabilities, and exposure to high-risk jurisdictions, revealed several key findings.

The report highlighted that legal persons, including businesses and partnerships, are more prone to money laundering (ML) due to their complexity and ability to conceal ownership. A staggering 15.6% of Suspicious Activity Reports (SARs) received by the Financial Intelligence Agency (FIA) involved business companies limited partnerships.

Emerging Products and Technologies

The assessment also looked at emerging products and technologies, including:

  • Decentralized financial products (DeFi)
  • Medicinal marijuana
  • Mobile phone app transfers

DeFi was found to pose a heightened ML risk due to its unregulated nature, while medicinal marijuana’s legalization has increased the product’s potential for ML exploitation.

Gaming and Betting

The report highlighted that gaming activities in the Virgin Islands, including betting on card games and sports, are often linked to money laundering. Intelligence suggests that “keeping numbers” - a form of sports betting - is being used as a means to launder funds.

Expectations for Regulated Sectors

To mitigate these risks, the BVI Financial Services Commission has issued expectations for all regulated sectors, including:

  • Reviewing and adjusting policies, procedures, and internal controls
  • Enhancing monitoring of clients based on risk
  • Demonstrating understanding of client behavior and ability to identify potential areas of concern
  • Implementing institutional risk assessment frameworks

The full report can be accessed on the BVI Financial Services Commission’s website.