BVI unlikely to lose business after grey listing — Smith

The BVI is unlikely to lose business following its greylisting by the Financial Action Task Force (FATF), according to Junior Minister for Financial Services Lorna Smith.

Smith strongly rejected suggestions that the territory would suffer economic fallout due to its inclusion on the FATF’s list of jurisdictions under increased monitoring. The BVI was placed on the list after a mutual evaluation identified several areas needing improvement in the territory’s anti-money laundering and counter-terrorism financing framework.

“I do not expect that we will lose any business,” Smith stated. “When we consider other jurisdictions throughout the Caribbean which have been grey listed… none of them lost any business.” She pointed to the Cayman Islands, which was on the grey list until 2023, noting “their business increased.”

Smith’s comments are in contrast with those of other elected officials who have recently warned that the territory’s finances and reputation are likely to suffer after being grey-listed for the first time.

Opposition member Marlon Penn warned that the BVI risks losing vital investors to competing jurisdictions after international watchdogs grey-listed the territory. “BVI will be under tremendous scrutiny now in terms of anything that’s done with a BVI product,” Penn said. “It means that investors might opt to not deal with the scrutiny.”

But Smith explained that the grey-listing is “not a sanction” and argued that it does not reflect a failure by the territory. “It is a recognition that while we have made substantial progress… a few key areas remain that we must show effectiveness in,” she said.

According to Smith, the grey-listing should instead be viewed as an opportunity to build investor confidence. “When investors observe the swift and visible progress that the British Virgin Islands is making… it boosts investor confidence,” she argued.

She added that the FATF had acknowledged the BVI’s “significant progress” and praised the territory for its “commitment, transparency, and the high level of political support” shown during recent international meetings.

The BVI is currently working on a revised national action plan, due next month, which will set out its strategy for exiting the list. Smith said that while the FATF has given a two-year timeline for review, she is confident the territory can meet the requirements within that timeframe.

The FATF meets only three times a year, and the delisting process includes a mandatory six-month on-site assessment once the action plan is deemed complete.

“This process is an opportunity, not a setback,” Smith asserted. “We will seize it to ensure continued confidence in our financial services sector.”