BVI being grey-listed was no surprise – Lorna Smith

The BVI’s placement on the Financial Action Task Force (FATF) grey list did not come as a surprise, according to Junior Minister for Financial Services Lorna Smith, who described the development as expected following months of close collaboration with the international watchdog.

“We only became aware that the BVI would be on the grey list shortly before it was confirmed on the 13th of [June],” Smith said. “However, I should say that, given our close collaboration with the FATF over the last year, it was no surprise.”

For the first time in its history, the territory was placed on the FATF’s increased monitoring list — commonly referred to as the grey list — following a mutual evaluation in 2024 that highlighted gaps in demonstrating effectiveness in key areas of anti-money laundering and counter-terrorist financing.

Smith emphasised that the grey-listing is not a sanction but an opportunity to enhance compliance systems.

“It is a recognition that while we have made substantial progress… a few key areas remain that we must show effectiveness in,” she explained.

The Junior Minister added that the FATF had acknowledged the BVI’s proactive steps and political commitment to reform.

“We were commended on our commitment, our transparency, and the high level of political support demonstrated throughout the process,” Smith argued.

According to her, many of the required actions have already been addressed or are well underway. The remaining work includes enhancing risk-based supervision for financial service providers, ensuring up-to-date beneficial ownership records, and improving the quality of suspicious activity reports.

Smith expressed confidence that the territory will complete the reforms within the two-year timeline set by the FATF. “It is our absolute intention to complete these actions within the time frames laid out… Be in no doubt, we remain fully committed to upholding the highest global standards,” she said.

When questioned about why it would take two years to come off the list, Smith explained that the FATF’s evaluation schedule contributes to the duration. “The Financial Action Task Force meets three times a year only,” she said, noting that even after compliance is demonstrated, the FATF requires a six-month on-site assessment before removal from the list.

“This process is an opportunity, not a setback,” Smith added. “And we will seize it to ensure continued confidence in our financial services sector and the wider community.”