The Virgin Islands must make “substantial progress” in the coming months to combat money laundering and terrorism financing in order to reinforce its status as a credible financial hub, Deputy Premier Lorna Smith has warned.

Ms. Smith, who is the financial services minister, delivered the message in the House of Assembly after Opposition Leader Ronnie Skelton pressed her on how the territory will safeguard its reputation following a scathing February report from the Caribbean Financial Action Task Force.

Among other questions, Mr. Skelton asked about the timeline for the reforms recommended by the CFATF.

“Is there a timeframe for the implementation of the most substantial requests?” he asked. “Is it ten years, five years, two years?”
Ms. Smith replied that the territory needs to make “substantial progress” by November.

“The government of the Virgin Islands has confirmed that it is rigorously committed to implementing the recommendations of the CFATF report,” she added. “The CFATF made a number of recommendations, and I am pleased to report that several of these actions are currently under way.”

Ms. Smith also listed areas in which she said the government is taking action: anti-money laundering measures; risk assessment frameworks for the Financial Investigation Agency and the Financial Services Commission; and efforts to ensure that information on beneficial ownership is in the public realm.

“The Virgin Islands is a proud founding member of the CFATF, and we know that the integrity of our financial services sector and adherence to the highest regulatory standards is crucial to the sector’s continued success,” she said. “The BVI is determined to continue itself as a key partner in the global fight against illicit activity.”

Ms. Smith acknowledged that strengthening law enforcement is key to boosting the VI’s reputation.

The report

The long anticipated CFATF report on the VI said the territory was doing poorly in seven out of 11 key indicators for combating money crime.

This put the VI in a poor light compared with rival financial centres, such as the Cayman Islands and Bermuda.