In June 2022, more than 70 public officers trained in preparation for the Fourth Round Caribbean Financial Action Task Force Mutual Evaluation. The review is to conclude soon with a report expected by early next year if not before. (File photo: GIS)

A long-awaited anti-money-laundering report crucial to the financial services industry’s international reputation will be finalised and published by early next year, according to Deputy Premier Lorna Smith.

“The British Virgin Islands is currently being evaluated against the Financial Action Task Force’s International Standards on Anti-Money Laundering and Combating the Financing of Terrorism,” Ms. Smith said while providing an update on financial services matters during an Oct. 31 House of Assembly meeting. “This evaluation is being led by a team from the International Monetary Fund on behalf of the Caribbean Financial Action Task Force.”

If the VI performs poorly in the evaluation, it could risk being put on the FATF’s oft-dubbed “grey list” of jurisdictions facing enhanced monitoring. The VI was deemed “largely compliant” during the Third Round Mutual Evaluation that it underwent in 2008.

In the ongoing Fourth Round evaluation, the VI is being assessed on expanded and updated criteria following delays due to Hurricane Irma, FSC officials have said.

The review

As part of efforts to score well on the review, the House of Assembly rushed through 16 related laws two days before IMF assessors arrived in the territory in March to conduct an onsite visit. During that visit, the IMF team met with officials in the Financial Services Commission, other authorities, and industry representatives, Ms. Smith explained last week.

“These authorities have since been heavily engaged with the evaluation team in providing follow-up information and clarification on the measures that the Virgin Islands has in place to combat money laundering, terrorist financing, and proliferation financing,” she said.

The mutual evaluation, Ms. Smith said, will help ensure that the VI’s systems for countering money-laundering and terrorism financing are adequate and up to international standards.

“Following the publication of this report, the relevant competent authorities, including the FSC, will place priority on implementing such recommended actions,” she said.

Also during the Oct. 31 HOA sitting, Ms. Smith provided updates on the Virtual Assets Service Providers Act. The law, she said, brings virtual asset service activities under the FSC’s remit. It came into force in February but allowed people who were already conducting such activities until the end of July to submit applications, she explained.

“The commission has been assessing these applications to determine the adequacy of measures that the applicants have in place to undertake these activities, in consideration of the risks posed by these types of entities,” said Ms. Smith, who is the minister of financial services, labour and trade.

Banking bills

The FSC has also been making strides in developing draft legislation to repeal the Banks and Trust Companies Act and replace it with two new pieces of legislation: the Banking Act and the Banking Code, according to Ms. Smith.

The act, she said, will be developed to handle banking-related matters in alignment with standards outlined by the Switzerland-headquartered Basel Committee on Banking Supervision, an international committee of banking supervisory authorities.

The code will enforce consumer protection measures within the banking industry, she added.