The assessment of the British Virgin Islands’ (BVI) compliance with the 40 recommendations of the Financial Action Task Force (FATF), as outlined in the most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation Report on anti-money laundering and countering terrorist financing (AML/CFT), indicates an overall high level of compliance.
Among the 40 Recommendations, the BVI was deemed “largely compliant” with 25 recommendations. This designation signifies that adherence to technical criteria for these recommendations resulted in various rankings, including mainly “met,” “mostly met,” “partially met,” and in some cases “not met.”
The recommendations that the BVI was found largely compliant to related to matters including assessing risks and applying a risk-based approach, money laundering offences, confiscation and provisional measures, targeted financial sanctions, consumer due diligence, record keeping and new technologies.
Notably, the BVI was found to be fully compliant with 11 recommendations, indicating that all technical criteria were satisfactorily met for these particular recommendations. These included recommendations relating to matters including national cooperation and coordination, Terrorist Financing Offences, Financial Institution Secrecy Laws, Correspondent Banking, Financial Intelligence Units and Extradition.
Additionally, the BVI demonstrated partial compliance with 3 recommendations, signalling areas with room for improvement despite meeting or mostly meeting some technical criteria. These recommendations related to matters such as transparency and beneficial ownership of legal persons, and regulation and supervision of financial institutions.
The BVI was deemed non-compliant with one recommendation, Recommendation 8.
Recommendation 8 focuses on technical measures countries should take to prevent the abuse of non-profit organizations (NPOs) for illicit finance. The CFATF assessment identified shortcomings in the BVI’s regulatory framework and risk-based supervision of its NPO sector leading to the non-compliant rating.
Recommendation 8 requires countries to review and understand the potential money laundering and terrorism financing risks in their NPO sectors and implement appropriate measures to mitigate those risks.
However, the CFATF evaluation found the BVI lacks implementation of key elements under this recommendation.
It found that the Territory has not identified the subset of NPOs at the highest risk for terrorism financing abuse as called for by the FATF standards, hampering the ability to effectively target risk mitigation efforts.
Instead, it was found that the BVI relies greatly on general international typologies rather than analyzing country-specific risks.
Periodic reassessments of the sector’s terrorist financing vulnerabilities are said to be also absent.
While noting that the BVI has accountability and transparency policies for NPOs, the report found that outreach efforts did not adequately focus on terrorism financing risks until recently. The Financial Investigation Agency’s outreach was also found to lack meaningful focus on these risks prior to early 2023.