The Virgin Islands financial services industry rushed to distance itself from the Miami arrests last Thursday of Premier Andrew Fahie and BVI Ports Authority Managing Director Oleanvine Maynard — as well as the allegations of likely government corruption contained in the Commission of Inquiry report released the next day.

In a Friday statement, BVI Finance said the arrests “should [not] be conflated with the BVI financial services sector, which is operationally independent.”

Governor John Rankin spoke similarly when announcing details of the COI report last week, stating that the inquiry was “not an investigation into the BVI’s financial services sector” and offering his “continued support for the work of the BVI’s Commercial Court, the Financial Services Commission and other regulatory bodies that continue to operate as normal acting in accordance with international regulatory standards and a robust English common law framework.”

The governor also noted the territory’s “continued good cooperation with law enforcement agencies in the financial [services] field and the steps being taken with regard to the introduction of publicly accessible beneficial ownership registers.”

‘World-class’ centre

BVI Finance welcomed the governor’s remarks, stating that the jurisdiction “will continue to offer its products and services as a respected world-class international financial centre.”

On Monday, the BVI Financial Services Commission also weighed in, issuing a statement reminding the public that the COI described the FSC as “an example of a statutory board which has policies in place to promote good governance” and consequently the COI did not see the “need to call for oral evidence on” its activities.

“The [FSC] will continue to robustly implement and enforce all the financial services laws of the territory,” the agency wrote. “Accordingly, the commission implores persons within the financial services sphere to adhere to all the commission’s financial services laws and regulatory standards.”

However, a portion of the criminal complaint against Mr. Fahie and Ms. Maynard, who allegedly offered to use “shell companies” to launder drug proceeds, does appear to call into question the role of the financial services industry in the case.

Likewise, some international media reports have linked the financial services sector, which has come under fire on multiple fronts in recent years, to the arrests and the findings of the COI report.

The Financial Times called the arrests “the latest blow” to the VI’s image, noting the territory’s “outsize influence on the controversial world of offshore finance.” The newspaper added that the industry was already coping with fallout from last year’s Pandora Papers leak, which revealed thousands of companies registered in the VI were linked to rich and famous figures, some of whom have been linked to corruption and wrongdoing in other countries.

The arrests also occurred shortly after the territory was grey-listed as a tax jurisdiction by the European Union. Additionally, the VI soon faces the prospect of giving up its clients’ privacy because of a United Kingdom requirement to establish a public register of company ownership next year.

Mixed reactions

Around the world, reactions to the Miami arrests were mixed.

On Twitter, Syed Shabbar Zaidi, former chairman of Pakistan’s Federal Board of Revenue, called Mr. Fahie’s arrest “an eye opener” and suggested that it meant that assets are not safe in offshore centres.

“Keep assets in Pakistan,” he advised his fellow citizens.

However, Luc Cohen, a reporter for Reuters, noted in a Tweet that information in the criminal complaint in fact reflected poorly on US financial services. He pointed out that Ms. Maynard allegedly “suggested receiving drug money in a bank account belonging to a Florida real estate company owned by her son.”

“Remind me who the ‘offshore’ ‘secrecy jurisdiction’ is?” he wrote.