Opposition Member Hon Marlon A. Penn (R8) has called on the government to be more transparent about the grey listing of the Virgin Islands (BVI) by the Financial Action Task Force (FATF). Photo: YouTube/FATF

Junior Minister for Financial Services, Trade and Economic Development Hon Lorna G. Smith, OBE (AL) told VINO in an exclusie interview that the Virgin Islands being on the FATF grey list will not have a negative impact. Photo: GIS

(L-R) Hon Ronnie V. Skelton (AL), Bishop John I. Cline, Mrs Shereen D. Flax-Charles, Hon Marlon A. Penn (R8), Mr Aaron F. Parillon, on NDP Radio on June 16, 2025. Photo: Facebook

The territory was placed on the FATF’s grey list on June 13, 2025, due to concerns about its AML framework, particularly regarding the identification of corporate beneficial owners. 

While Junior Minister for Financial Services, Trade and Economic Development Hon Lorna G. Smith, OBE (AL), in an exclusive interview told Virgin Islands News Online (VINO), that there is no negative impact anticipated on the Financial Services business due to the grey listing, Hon Penn is not convinced. 

Be open & frank

Speaking on NDP Radio on ZBVI 780 AM on Monday, June 16, 2025, Hon Penn said, to his memory, it is the first time the VI has been included on the grey list. 

“The key thing for this for me is we have to be frank and have an open dialogue with the people in terms of what the implications are for being listed in the BVI.”

The Virgin Islands Party government, he added, needs to come before the entire House of Assembly to have a conversation 

“It’s time now for the house and the industry to develop a road map, a strategy for us to get off this grey list and have a frank and open dialogue with the people of the Virgin Islands in terms of what it means.”

Competitors will capitalise on VI’s grey listing- Hon Penn

Being on the FATF’s grey list, Hon Penn continued, has implications for derisking. 

“We have the issue with derisking of the banks, it messes with the confidence [of] the BVI products, BVI will be under tremendous scrutiny now in terms of anything that is done with a BVI product.”

Hon Penn also said this would be to the advantage of the VI’s competitors in the Financial Services Industry. 

“It means investors might opt to not deal with the scrutiny and persons would market themselves as not being on the grey list and have a level of confidence over us…and that’s what our competitors are going to do…they’re trying to build their industry and find a way to capitalise on our shortcomings now and to take over that business.”

The Territory, he warned, cannot afford to lose business in this sector. 

“Your recurrent and total expenditure outstrips your revenue, so if you lost 10 per cent of the $200 million that we are getting from financial services, that’s about $20 million, we can’t afford that right now.”

Hon Penn advised that an aggressive approach is needed as well as being “open and transparent” in the industry, government and with the people of the VI. 

“All of us have to working hand in hand, hand in glove to ensure that whatever the strategy is, we work swiftly to ensure that confidence remains in the BVI product.”

Work has already begun

While Hon Penn is asking for a roadmap to be developed in order to get the VI off the FATF’s grey list, the FATF has already given its recommendations to the territory. 

The FATF is an international body that sets global standards for combating money laundering and terrorist financing. 

A June 13, 2025, press release from the Ministry of Finance indicated that notable progress over the last year, since receiving the FATF’s report, has included amending or enhancing over 20 pieces of legislation, namely the Anti-Money Laundering and Terrorist Financing Code of Practice and the Proliferation Financing (Prohibition) Act.

The Territory has also strengthened its beneficial ownership regime, conducted comprehensive risk assessments, issued enhanced technical guidance on crucial areas, and established a new Sanctions Unit in the Attorney General's office. 

An updated National Strategic Action Plan that details completed actions and remaining milestones will also be published according to the Ministry of Finance. 

Hon Ronnie V. Skelton (AL), who was on the programme, also acknowledged that work has already started in complying with the FATF’s recommendations. 

“There’s a list of stuff that we have to correct in order to get off of that list, I think we started some of those things in the house, amending legislation, different things,” he said. 

See links to related stories 

https://www.virginislandsnewsonline.com/en/news/vi-working-to-implement-fatf-targeted-measures-for-compliance

https://www.virginislandsnewsonline.com/en/news/exclusive-fixing-deficiencies-raised-by-fatf-makes-vi-stronger-hon-lorna-g-smith