Since Russia invaded Ukraine in February, the Virgin Islands has frozen more than $40 million in assets, according to the Governor’s Office, which serves as the competent authority for sanctions in the territory.

The sanctions are required under the United Kingdom’s Russia (Sanctions) (Overseas Territories) Order 2020, the office stated in a press release.

“I welcome early steps taken by the British Virgin Islands to ensure it meets the sanctions requirements in response to Russia’s unprovoked, premeditated and unjustified invasion of Ukraine,” Governor John Rankin said.

He added that his office, along with the Foreign, Commonwealth and Development Office and the Office of Financial Sanctions Implementation in the UK, continues to support and work together with the Financial Services Commission, Financial Investigation Agency, and other authorities in implementing the sanctions.

Kenneth Baker, managing director of the FSC, said the “cohesive approach” to the sanctions is underpinned by the territory’s Council of Competent Authorities, which jointly enforces them along domestic and international lines.

OT obligations

The VI, aside from adhering to its international obligations as an overseas territory of the UK, is also complying with UK sanctions required of the OTs by the UK order in council, and it monitors sanctions listings published by the FCDO and OFSI, the press release stated.

The FSC and FIA pass on sanctions updates to financial services providers and other related businesses.

“Where any requests for international cooperation are received, the BVI stands ready to execute these, including the sharing of beneficial ownership information with overseas law enforcement … under the Exchange of Notes with the [UK] government under which information can be exchanged in as little as one hour in urgent cases,” the release stated.

It added that sanctions are generally enacted to coerce a regime to change its behaviour and to deny it access to resources, signal disapproval, or protect the value of assets that have been misappropriated from a country until they can be returned to their rightful owners.

Russia-VI connection

In March, BVI Finance CEO Elise Donovan countered claims in the UK media that the VI is a light touch on Russia, saying that the territory has some of the strictest controls of any financial centre.

“There is no evidence of illicit use of BVI companies being used (by Russian or other nationalities) to purchase property in the UK,” Ms. Donovan wrote.

She added that the VI does not host a “disproportionate number” of Russian companies compared with other financial centres, claiming that only about three percent of VI companies worldwide are owned by Russians.