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VI on US 'money laundering' list- Report

-Premier Smith dismisses concerns; says US & UK also on list
The Virgin Islands features on the latest United States’ Department of State International Narcotic Control Strategy Report: Vol 2 – ‘Money Laundering and Financial Crimes’ which said that there are significant money laundering risks due to the exploitation of the territory’s financial services and lack of mandatory filing of ownership information. Photo: www.geotimes.ge
Asked about the revelations in the report regarding the VI at a press briefing yesterday March 27, 2015 Premier and Minister of Finance Dr the Honourable D. Orlando Smith said, “It is true that the BVI and other Caribbean countries are on that list. It is also true that the United States and the United Kingdom and several other major countries are on the list.” Photo: VINO
Asked about the revelations in the report regarding the VI at a press briefing yesterday March 27, 2015 Premier and Minister of Finance Dr the Honourable D. Orlando Smith said, “It is true that the BVI and other Caribbean countries are on that list. It is also true that the United States and the United Kingdom and several other major countries are on the list.” Photo: VINO
ROAD TOWN, Tortola, VI – The Virgin Islands features on the latest United States’ Department of State International Narcotic Control Strategy Report: Vol 2 – ‘Money Laundering and Financial Crimes’, which alleged that there are significant money laundering risks due to the exploitation of the territory’s financial services and lack of mandatory filing of ownership information.

“Exploitation of its offshore financial services, the unique share structure that does not require a statement of authorised capital, and the lack of mandatory filing of ownership information pose significant money laundering risks to the BVI. The BVI is a favoured destination for registering shell companies that can be established for little money in a short amount of time," it said.

According to the report, there are reports that a substantial percentage of BVI’s offshore business comes from China, which lists the VI as a jurisdiction of primary concern with regards to money laundering.

The report further noted that the VI’s Financial Services Commission (FSC) is the sole supervisory authority responsible for the licensing and supervision of financial institutions under the relevant statutes.

“The FSC’s most recent statistical bulletin was published in December 2014, reflecting data as of September 2014. The bulletin notes there are 480,932 active companies, six licensed banks, 231 other fiduciary companies, and 2,175 investment businesses and funds registered with the FSC. The banking sector has assets valued at $2.4 billion as of June 2014,” the report said.

Use of US dollar & proximity to USVI are risks

However, the report pointed to the territory’s use of the US Dollar and its close proximity to the United States Virgin Islands as posing risks for money laundering.

“Tourism accounts for 45 percent of the economy and employs the majority of the workforce; however, financial services contribute over half of government revenues. The BVI’s proximity to the U.S. Virgin Islands and the use of the U.S. dollar for its currency pose additional risk factors for money laundering. The BVI, similar to other jurisdictions in the Eastern Caribbean, is a major target for drug traffickers, who use the area as a gateway to the United States. BVI authorities work with regional and U.S. law enforcement agencies to mitigate the threats,” the report stated.

The Unites States Department of State noted that recently, BVI implemented a supervisory regime for all designated non-financial businesses and professions, including legal advisors, accountants, and dealers in precious metals and stones, as well as nonprofit organizations.

“BVI uses suspicious activity reports (SARs) rather than suspicious transaction reports (STRs). SARs, in general, relate to suspicious activities by a broad range of entities, rather than suspicious financial transactions. Therefore, the cited numbers encompass all types of suspicious activities, including those of a financial nature,” the report said.

Actions taken

It said that most penalties for anti-money laundering (AML) violations have maximums ranging from $250,000 - $500,000 when action is taken through the courts. “The FSC can impose administrative fines up to $100,000. From January through September 2014, the Enforcement Committee reviewed 96 enforcement cases, resulting in four administrative penalties, three cease and desist orders, three license revocations, and nine warning letters.”

The report said too that there is strong collaboration between BVI law enforcement and regional as well as U.S. law enforcement agencies, which has resulted in several successful operations targeting drug smuggling and drug dealing.

“There have been 24 money laundering related prosecutions and 13 convictions since 2008,” it said.

Beneficial ownership

The report noted that in June 2013, the Government of the United Kingdom announced plans for the UK and its overseas territories and crown dependencies to establish mandatory registers of beneficial ownership. “It has since indicated that such registers will be publicly available. The government of the BVI should work towards the goal of making information on beneficial ownership of offshore entities available for legitimate requests by international law enforcement and, eventually, to the public,” it said.

'There will always be suspicions'- Premier Smith

Asked about the revelations in the report regarding the VI at a press briefing yesterday March 27, 2015 Premier and Minister of Finance Dr The Honourable D. Orlando Smith said, “It is true that the BVI and other Caribbean countries are on that list. It is also true that the United States and the United Kingdom and several other major countries are on the list.”

“So what I am saying is despite all of the measures you put in place, there will be suspicious activities reported in all countries and we of course have to do our best to make sure that our laws are in place to prevent irresponsible activities on the part of whoever and that is what we are doing. That is why we have a record of having good regulations in the financial services sector. That is why the banks are being [stricter] when it comes to establishing accounts,” said Premier Smith.

Up to press time there was no response from members of the Opposition, including Virgin Islands Party Chairman Hon Julian Fraser RA (R3) and Hon Andrew A. Fahie (R1).

See report on the VI here: 

http://www.state.gov/j/inl/rls/nrcrpt/2015/vol2/239060.htm

29 Responses to “VI on US 'money laundering' list- Report”

  • Yes (28/03/2015, 10:24) Like (5) Dislike (1) Reply
    Wow
  • ..................... (28/03/2015, 12:06) Like (15) Dislike (18) Reply
    Look how low the bvi has dropped under the ndp crew
    • Really??? (28/03/2015, 13:45) Like (3) Dislike (5) Reply
      Pls look at reports preceeding this one, the bvi was there also.
    • @ ----------------- (28/03/2015, 14:00) Like (5) Dislike (19) Reply
      9 more months not to worry the god and hero Fraser will repair it
      • stuppps (28/03/2015, 16:22) Like (14) Dislike (2) Reply
        if he is a "god" as you say, then he should never be subject to death......you people are sooooo incredibly stupid. You ignorance increases daily it seems.
  • true tolian (28/03/2015, 12:53) Like (6) Dislike (5) Reply
    Plse be aware the us is a big country and has more money than us,while we may not be doing to
    good we are doing better than some places in the us.Also remember they has lost a huge case to
    extradite some of our people so they would do ant thing to tarnish our reputation.
    • @true tolian (28/03/2015, 14:47) Like (7) Dislike (6) Reply
      Well said, BVI is high up on the US radar now. The country will pay dearly for the extradition case, the big country will drive the place to poverty. Just more proof that narcotics destroys lives, ours!
    • FYI @ true tolian (28/03/2015, 15:54) Like (4) Dislike (1) Reply
      It's evident you don't know the U.S. good. Lost an extradition. Smh. They will refile for those guys. Mark my words.
  • RTO (28/03/2015, 14:00) Like (3) Dislike (16) Reply
    usa reminds me of the NDP both of them are bullies
  • Hope (28/03/2015, 14:13) Like (6) Dislike (0) Reply
    . Privacy must not be used as an excuse when the public intrest is at risk.
  • eyes (28/03/2015, 15:27) Like (6) Dislike (3) Reply
    When black people on the rise the k--k--k-- do anything to destroy them--From Malcolm X--to Marcus Garvey--To Bob Marley--To Cayman Islands Now the BVI. their ambition is to kill whatever is black and good ..Its nothing more than hate, envy and jealousy. who they can`t control they kill or try to kill. US the ultimate bullies. Hope our leaders stand still and firm.--Like the Cayman leader
    • Thanks (29/03/2015, 09:20) Like (1) Dislike (3) Reply
      Eyes, you are the only blogger who understands whats going on. Yes from the time crackers couldnt understand how black people advanced Egypt they after black people thiefing everything we had and calling it theirs. Because we are feeding ourselves and not asking them for handouts they are labelling us in most negative light.
      Dont think the UK happy we are feeding ourselves also. They want us to be with our hands outstretched all the time. Another sad thing we are fighting too much among ourselves and there are those on the fence watching to pick up the spoils.
      People of Virgin Islands look at our future and let us work in the best interest of the future ofbour children.
      Anyyhing successful and black they want it destroyed to have ys begging but we are a proud people and will always overcome all obstacles.
  • Observer (28/03/2015, 17:04) Like (5) Dislike (13) Reply
    After 18 Million in consultant and LS and KD frequent flying around the word wasting $$$$ we still on this list NDP cannot handle international relations we need the steady hands of Fraser and Fahie
  • bvi voters (28/03/2015, 20:27) Like (1) Dislike (14) Reply
    Bvi has a bad name first it was the black lust now this...ndp is a big waste when coming to protecting our interest overseas
    • Love my country Despite (28/03/2015, 22:29) Like (0) Dislike (0) Reply
      Countries and Jurisdictions Table

      If a scroll bar appears below the following table, swipe the table to move left/right of the dashed line.
      Countries/ Jurisdictions
      of Primary Concern

      Countries/Jurisdictions
      of Concern

      Other Countries/
      Jurisdictions Monitored

      Afghanistan

      Latvia

      Albania

      Malaysia

      Andorra

      Mali

      Antigua and Barbuda

      Lebanon

      Algeria

      Marshall Islands

      Anguilla

      Malta

      Argentina

      Liechtenstein

      Angola

      Moldova

      Armenia

      Mauritania

      Australia

      Luxembourg

      Aruba

      Monaco

      Bermuda

      Mauritius

      Austria

      Macau

      Azerbaijan

      Mongolia

      Botswana

      Micronesia FS

      Bahamas

      Mexico

      Bahrain

      Montenegro

      Brunei

      Montserrat

      Belize

      Netherlands

      Bangladesh

      Morocco

      Burkina Faso

      Mozambique

      Bolivia

      Nigeria

      Barbados

      Nicaragua

      Burundi

      Namibia

      Brazil

      Pakistan

      Belarus

      Peru

      Cabo Verde

      Nauru

      British Virgin Islands

      Panama

      Belgium

      Poland

      Cameroon

      Nepal

      Burma

      Paraguay

      Benin

      Portugal

      Central African Republic

      New Zealand

      Cambodia

      Philippines

      Bosnia and Herzegovina

      Qatar

      Chad

      Niger

      Canada

      Russia

      Bulgaria

      Romania

      Congo, Dem Rep of

      Niue

      Cayman Islands

      Singapore

      Chile

      Saudi Arabia

      Congo, Rep of

      Norway

      China, People Rep

      Somalia

      Comoros

      Senegal

      Croatia

      Oman

      Colombia

      Spain

      Cook Islands

      Serbia

      Cuba

      Palau

      Costa Rica

      St. Maarten

      Cote d'Ivoire

      Seychelles

      Denmark

      Papua New Guinea

      Curacao

      Switzerland

      Czech Republic

      Sierra Leone

      Dominica

      Rwanda

      Cyprus

      Taiwan

      Djibouti

      Slovak Republic

      Equatorial Guinea

      Samoa

      Dominican Republic

      Thailand

      Ecuador

      South Africa

      Eritrea

      San Marino

      France

      Turkey

      Egypt

      St. Kitts and Nevis

      Estonia

      Sao Tome & Principe

      Germany

      Ukraine

      El Salvador

      St. Lucia

      Ethiopia

      Slovenia

      Greece

      United Arab Emirates

      Ghana

      St. Vincent

      Fiji

      Solomon Islands

      Guatemala

      United Kingdom

      Gibraltar

      Suriname

      Finland

      South Sudan

      Guernsey

      United States

      Grenada

      Syria

      Gabon

      Sri Lanka

      Guinea Bissau

      Uruguay

      Guyana

      Tanzania

      Gambia

      Sudan

      Haiti

      Venezuela

      Holy See

      Trinidad and Tobago

      Georgia

      Swaziland

      Hong Kong

      Zimbabwe

      Honduras

      Turks and Caicos

      Guinea

      Sweden

      India

      Hungary

      Vanuatu

      Iceland

      Tajikistan

      Indonesia

      Ireland

      Vietnam

      Kyrgyz Republic

      Timor-Leste

      Iran

      Jamaica

      Yemen

      Lesotho

      Togo

      Iraq

      Jordan

      Liberia

      Tonga

      Isle of Man

      Kazakhstan

      Libya

      Tunisia

      Israel

      Korea, North

      Lithuania

      Turkmenistan

      Italy

      Korea, South

      Macedonia

      Uganda

      Japan

      Kosovo

      Madagascar

      Uzbekistan

      Jersey

      Kuwait

      Malawi

      Zambia

      Kenya

      Laos
      • @ love my country despite (29/03/2015, 08:51) Like (2) Dislike (4) Reply
        Why the hell my country is on the list? Because of poor ndp managemt ndp must go
  • Boo (28/03/2015, 22:38) Like (1) Dislike (1) Reply
    Payback for throwing the extradition. tsk tsk It was such a small price to pay for a "blind eye"
  • Realist (28/03/2015, 23:40) Like (5) Dislike (0) Reply
    I have been working in the Financial Services Industry for many years and this matter should not be a political football among politicians. The problem are that there are a lot these financial services firms are not complying with the provisions in the Anti Money Laundering and Regulatory Codes of practice, do not have internal controls in place, failure to conduct risk based procedures for dealing with low and high risk clients and not hiring competent compliance personnels. Many of them are also not complying with provisions of the BVI Business Companies Act just to please clients.
  • long look me come from (29/03/2015, 08:53) Like (0) Dislike (1) Reply
    The ndp has killed the bvi soon we will be ashamed to say we are from the bvi when travelling
  • bvi (29/03/2015, 09:08) Like (1) Dislike (0) Reply
    The USA want to run the whole world for their own gain and they cannot run the USA properly both government past and present trying to keep the BVI clean.
  • my money (29/03/2015, 11:08) Like (0) Dislike (1) Reply
    me bit as soon as the VIP gets in the BVI will come off these lists
  • viboyintx (30/03/2015, 00:10) Like (0) Dislike (0) Reply

    First off tell the US go find something else to do instead of worrying about the big .the same people sayin the bvi is laundering money. have their money in our banks too crooked @$$ wh*te man on another note what happens in the bvi needs to stay in the bvi regardless if our criminals shipped drugs overseas or what ever don't let these wh*te devils dictate what we need to do to suit their needs .I'm not praising drug dealers in the territory but it's better for us to deal with our own crooks than the US white devils dealing with them. the US uses more drugs than any other country and guess what white Americans use the most and if the bvi government change their financial institutions just because the US says so the country will go broke after all the govt knows about the money laundering that's how they make money

  • Forbidden Truth (30/03/2015, 02:44) Like (2) Dislike (0) Reply
    Premier cannot/should not dismiss concerns because the US and UK are on list. That's not true leadership. You cannot be wishy washy about this issue and just dismiss it, you have to be more mature and show concern. Lead, Follow or Get out of the way. Popularity will not win next election.
  • Only way (30/03/2015, 11:41) Like (0) Dislike (0) Reply
    The only way the BVI comes of this list is to stop with financial services. Every "offshore" or "banking" jurisdiction is rightly so on this list. If you offer a product or service that can be used to hide your money or mask your ownership then there is a RISK of money laundering.
    For as long as i can remember compliance has been a moving goal post. If you take the time to read the report it is not a charge of money laundering it is just a statement of fact. We have products can be used to launder money. But we are well regulated and are a cooperative country.
  • Mark (31/03/2015, 08:30) Like (0) Dislike (0) Reply
    Ask the U.S. government what they are going to do about states like Wyoming, Kentucky, Arizona, Delaware etc. tell them to make sure those states implement a Beneficial Ownership regime. Tell the U.S. to clean their back yard before they clean others. The us like the UK are hypocrites.


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