News Americas, WASHINGTON, D.C., Fri. Mar. 4, 2011: The United Kingdom’s overseas territory, the British Virgin Islands, has moved from an area of just “concern” to “primary concern” in the US’ latest money laundering report.
The report released Thursday by the State Department, shows the BVI moving into the “Jurisdictions of Primary Concern” column, meaning it is now considered among “major money laundering countries.”
A major money laundering country, according to the Bureau Of International Narcotics And Law Enforcement Affairs’ International Narcotics Control Report, is defined by statute as one “whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking.”
The U.S. says the BVI is a major target for drug traffickers, who use the area as a gateway to the United States and drug trafficking in general is a serious problem.
And officials added that the Islands, with a population of approximately 22,000, remain vulnerable to money laundering practices through its drug trafficking trade and the exploitation of its offshore financial services because of its proximity to the U.S. Virgin Islands and the use of the U.S. dollar for its currency pose risk factors for money laundering.
The BVI has a growing off-shore economy and as of September 2010, there were 456,547 active companies, 237 licensed banks and 2,951 mutual funds registered with the BVI Financial Services Commission.
The U.S. wants the FSC to increase its staffing in order to meet the recommended inspection and reporting requirements, especially in light of the new entities covered under the law.
“The lack of prosecutions for money laundering and a reported decline in number of inspections suggests that the FSC should work closely with law enforcement and other authorities,” the report added by way of a recommendation.
Every year, U.S. officials from agencies with anti-money laundering responsibilities meet to assess the money laundering situations in 200 jurisdictions.
The U.S. is itself among the primary jurisdictions list along with Antigua, the Bahamas, the Cayman Islands, Canada, Bolivia, Brazil, Columbia, Costa Rica, Belize, Guatemala, Haiti, Mexico, Panama, Paraguay, Uruguay, Venezuela and the Dominican Republic.