Money Laundering Risk Assessment in the Virgin Islands
Introduction
The Financial Services Commission (FSC), led by its Anti-Money Laundering Unit, has conducted an updated Money Laundering (ML) risk assessment for the Virgin Islands. This report covers the period from 2015 to 2019 and is based on data collected from various stakeholders.
Jurisdictional Profile
Overview
The Virgin Islands is a non-self-governing territory of the United Kingdom, with a population of approximately 32,000 people. The official currency is the US dollar, and the primary sectors generating economic activity are tourism and financial services.
Socio-economic Context
- Historically low crime rate
- Politically stable
- Potential negative impact from the COVID-19 pandemic on the economy, particularly in the tourism sector
Assessment Methodology
The assessment was carried out using data from various sources, including:
- Available macro-fiscal data
- FSC prudential and statistical returns
- FSC supervisory and inspection data
- FSC enforcement data
- ODPP prosecutorial data
- RVIPF crime statistics
- Seizure and confiscation data
- HMC related data
- FIA suspicious activity statistics
- Corporate Registry data
- International Cooperation data
Comparative Assessment
The report compares the results of the 2016 National Risk Assessment with the current sectoral assessment, showing some degree of consistency in the level of risk identified within each sector.
Risk Rating
Based on the assessment, the overall ML risk to the Virgin Islands is determined to be Medium-High. The report highlights that compliance deficiencies within Financial Institutions (FIs) aid in increasing the ML risk, and the sectors assessed have been able to mitigate such risk by adhering to Customer Due Diligence (CDD), Beneficial Ownership (BO), and transaction recordkeeping and reporting requirements.
Conclusion
The report concludes that the Virgin Islands’ overall ML risk is Medium-High, due to a combination of factors, including compliance deficiencies within FIs, porous borders, and the presence of domestic and foreign criminality. The assessment highlights the need for continued efforts to improve AML/CFT measures and cooperation among stakeholders to mitigate the ML risk.