FinCen Files: BVI named in global financial scandal
Another big financial scandal has hit the world.
The BVI has been named.
The scandal involves more than 2,500 leaked documents that banks sent to the US Financial Crimes Enforcement Network (FinCen) between 2000 and 2017.
The leaked documents have, therefore, been called the FinCen Files and involve about two trillion dollars worth of transactions that uncover how some of the world’s largest banks have allowed criminals to move ‘dirty money’ around the world.
FinCen is tasked with combating financial crime. And all concerns about transactions made in US currency are sent to FinCEN, even if they took place outside the US.
The BVI’s involvement
Some of the international banks named in the scandal are Barclays Bank in London, Deutsche Bank and Bank of New York Mellon. In many instances, the banks processed transactions to companies registered in so-called secrecy jurisdictions and didn’t even know the owners of these accounts. And that’s where the BVI comes in.
One of the organisations now probing the documents is the International Consortium of Investigative Journalists (ICIJ). They also broadcast the Panama Papers and Paradise Papers.
ICIJ said: “At least 20% of the reports contained a client with an address in one of the world’s top offshore financial havens, the British Virgin Islands, while many others provided addresses in the UK, the US, Cyprus, Hong Kong, the United Arab Emirates, Russia and Switzerland.”
The ICIJ also said the BVI was involved with a UK-registered company, NoviRex Sales, which claimed to be in the ‘domestic appliances’ business, “but its paperwork suggested something else was going on”.
Here’s what the ICIJ said about NoviRex and the BVI: “NoviRex’s listed owners were two other companies, both incorporated in the British Virgin Islands and also without visible owners. The same two BVI companies were listed as ‘owners’ of thousands more companies at Companies House (the UK’s corporate registry).”
Strange $200K lingerie payments in BVI
“The FinCEN Files show NoviRex soon began firing off payments of astonishing size and frequency. For a domestic appliances business, some of the reasons NoviRex gave for the payments were strange: $200,000 for ‘lingerie’ from a British Virgin Islands company,” it added.
Over 3,000 UK companies are named in the FinCEN files – more than any other country. FinCen has described the UK as a “higher risk jurisdiction”.
Implications for BVI
Amid the leaked FinCen files, Premier Andrew Fahie announced his commitment to implementing publicly accessible registers of company beneficial ownership for the British Virgin Islands.
This is something the UK and European Union are pressuring the BVI to do as it is believed naming owners of companies will help countries identify tax evaders and stop money laundering.
While making the commitment to implement publicly accessible registers of company beneficial ownership, Premier Fahie listed a number of reservations.
He said such action could result in a breach of the rights of the “law-abiding and tax-paying individuals who are far greater in number than the targeted law-breakers.” He said children could be at risk and that the information could be easily accessed by persons with ill intent such as kidnappers.
Meanwhile, amid the FinCen files, the UK said it will be reforming its register of company to clamp down on fraud and money laundering.
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I rest my case. A few days ago, there was an article about the Premiers’ endorsing reluctantly the publication of beneficial ownership publicly, something this country has been resisting for years.
https://bvinews.com/premier-commits-to-publicly-accessible-registers-despite-reservations/
I was of the position that our financial services served as a vehicle for SOME criminals who wanted to evade taxes in their home countries or move dirty money.
Of course my position was not well received. There are folks in this neck of the woods who want to believe that our financial services is all above board.
Some people have their heads dug in the sand on this, or their fingers in their ears, but thoughtful people know better.
So I am not surprised by this FinCen report in the least.
Many journalist have been killed around the world who have tried to follow the money of dirty politicians and businesses.
It’s a dangerous world trying to follow dark money of powerful people.
I said it before, and I will say it again, the BVI financial industry needs to re-brand itself and shred any semblance of involvement indirectly in any of these questionable financial business transactions.
I think its important to note that I do not believe our financial services knowingly engage with criminals. I think they just collect their fees, ask few questions, and look the other way. In other words, they are complicit.
I would simply say this.
The world is not balanced with all that is good. there is good and there is evil. Sometimes the good outweigh the evil and the other way around. Our system is created just like how the tax system is created in the USA so that corporate America benefits more especially the big wigs.
We were blessed to put this system in place and you may think that the protocols of our fiscal management system needs to upgrade but at the end of the day we are not alone in this business. We have competition so I believe that we should just do what we have been doing well and leave the entities that investigate do their work because if we cannot create a system to make a living there is no need to be in business.
“..we should just do what we have been doing…”
I would argue that we should NOT “just continue doing what we have been doing.” We should be doing quite the contrary.
Note, the BVI’s name is constantly coming up in these scandals.
The regulators of the BVI financial industry should instead use these revelations to take a closer look at the industry, institute any necessary reforms as needed, and do everything they can to clean up the industry, so that we can keep the BVI’s name out of people’s mouths for the wrong reasons.
In business as in life, one’s reputation goes a long way for better or for worse.
If this industry becomes transparent, it will kill the very essence of secrecy and discretion it was founded on. The financial services industry is here to cater to dirty money. What it can do it is ala-Switzerland. It is open for depository of ill-gotten wealth. But if the depositor is caught , the stash stays in Switzerland by default.
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I think its important to note that I do not believe our financial services knowingly engage with criminals. I think they just collect their fees, ask few questions, and look the other way. In other words, they are complicit”.
You were going good until you said the above. How can they not knowingly when they intentionally look the other way and therefore are complicit. What they pretending they don’t know?
“What they pretending they don’t know?”
It’s implied they did/do. I cannot imagine none of those corporate registrations did or does not raise some red flags especially when considering the financial source.
The trust companies are businesses out to make a buck like all other businesses. What incentive do they have to regulate themselves and stop their cash flow even if they suspect something is not right? I would say not much.
The whole idea of setting up companies whereby the beneficial owners are shielded is problematic to begin. If you don’t have anything to hide, why the secrecy?
It’s questionable if any oversight is being done within those trust companies or by the regulators since the BVI’s name is always coming up in these scandals.
Maybe there’s none, and these companies are just pushing papers to make the sale, and could care less where the money is coming from.
Anyway, imo, this is a job for the financial regulators to look into and address.
Your statements were broad and suggested that our financial services were only used for illegal purposes. “Dark money” All businesses can be used for illegal purposes by criminals. Even churches have been used for illegal purposes.
“Your statements were broad and suggested that our financial services were only used for illegal purposes.”
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Not true. Here is what I said:
“I was of the position that our financial services served as a vehicle for SOME criminals who wanted to evade taxes in their home countries or move dirty money.”
The operative word is SOME.
YOUR EXACT WORDS WERE;
“The days of the rich and well connected using dark money to stash around the world in hidden offshore accounts is coming to an end” What does that mean??? It certainly doesn’t suggest the proven facts that financial crime through our financial services is low. Everything you are spewing is pure garbage and uninformed. There is very little benefit for a Trust Company to “turn a blind eye” as you said.
A typical Registered agent annual fee cost significantly less than $1,000.00. The maximum potential fines are over 250 times that. You can be imprisoned. Mossack Fonseca who was one of the lead names in the Panama papers had to close their business and were fined almost $500,000 in the BVI. If you think any of the workers in the BVI collected a dime from any illicit activity related directly to the scandal you would be foolish. They lost their jobs and probably didn’t receive any benefits on their way out. Why would you turn a blind eye when the risk is way greater than the reward.
Sorry, I cannot respond to you on the content of your post. Your vulgar title is offensive to me. As in life and elsewhere, I do not engage anyone whose approach is vulgar.
You are clearly capable of writing well. Why the vulgarity?
Come on. I’m sure there are younger people reading. Be a good example of what civil discourse can look like.
And no, I’m not being high and mighty. Being civil is just my standard of communication with anyone I meet in life be it in person or online.
My name actually stands for Good Times Forever Only Happiness.
The spin on your name is very clever. It made me laugh.
You are full of it but it was still funny.
I agree with Repy only in the sense that people will dismiss a valid point based on their perceptions or preconceived notions, which are formed by societal norms. Society has established what they accept the initials to mean, hence his reaction and mine.
But I get the impression you don’t care and will proceed according to your own beat, but just a thought to consider.
Still funny.
Once again and perhaps now you will all realize that the financial sector is dead or almost dead. Set your priorities and Territory budget on the tourism sector. Last, if Fahie makes the Dec 1, opening with stupid unrealistic conditions you will not only kiss this years tourism goodbye but tourism for years to come.
Without dirty money the BVI has no financial industry . Lol your all deluded . It’s the only reason you have a financial industry if you disagree please please tell my why a bank would set up a business on a third world island that’s a pain to get to full of racist bigots who are radical believers of an imaginary friend and have regular shooting over drugs. May be it’s the beauty of the island , right yea , E. coli on the beaches scrap cars filth and rubbish everywhere and a sewage system that don’t work .and finally lazy lazy entitled local people lol
It wasn’t like that before all of you came here. So check yourself and the filth you brought with you, and feel free to leave.
The BVI implemented financial agreements with many countries law enforcement. The information is there if they want it, so what is the real problem? This is fabrication to bend the BVI to the will of the EU and UK. The financial services is dead. Most of the companies in the list are registered in the UK but all you get is the UK said it is going to reform, the height of BS. So what was the hold up in reforming prior to this.
@Reply: Whilst I endorse most of what you say, the truth is only a small number of BVI registered entities are abused when compared to the number of companies on the register at BVI Company Registry. I also wish to add that the money in the UK and other jurisdictions outside the BVI. The BVI will always be a target regardless of how well it compares to other jurisdictions including the U.S., U.K. and others. While the BVI will never be able to push back against all the negative press coverage when such leaks happen, it need to continue to reiterate that it is still one of the strongest jurisdictions when it comes to upholding international standards.
Agreed.
You can always tell idiots with money. You want to move 200k and you state its for Lingerie? LOLOLOLOL LACK OF IMAGINATION. Same lack of imagination does trap these tola silly broads.
Ah smell a calypso song about lingerie coming soon! ?
Our comittment should be to our customers. Our prime product in this matter is the ability to hide registered holders and directors. What do we stand to lose by simply making everything public so investigators works can be easier? These countries who are putting pressure on us, what will they do for us? What can they put on the table if we comply? I am sure if we increased our fees in our services after they blacklist us we would be able to thrive off of those who wish to stay anonymous as they will gladly pay top dollar. Premier, i say show some balls and stand your ground. We sell a harmless product that people choose to play a dangerous gane with and thats none of our business. Investigators need to do their own damn work. The gun shops dont get close down because somebody buy a gun and commit a crime, the PERSON does the time…..
@ reply
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I think its important to note that I do not believe our financial services knowingly engage with criminals. I think they just collect their fees, ask few questions, and look the other way. In other words, they are complicit”.
You were going good until you said the above. How can they not knowingly when they intentionally look the other way and therefore are complicit. What they pretending they don’t know?
Over 3,000 UK companies are named in the FinCEN files – more than any other country. FinCen has described the UK as a “higher risk jurisdiction” The UK need to practice what they preach.
Tough times ahead.. I wonder if this govt is up to it…Financial industry Issues.. Covid 19 Issues. Tourism issues…Our govt need to get serious settle down on really focus on the tasks ahead….
Firstly while I understand all of your views, there are things that everyone is failing to notice. We are not alone in this. UK, a first world nation and US are both named, but of course because we are small we get the bulk of the blame. If dissect the report and confirm how significant our contributions were. Next to Honk Kong and Cyprus….wont be high. It is evident that everyone just wanna see one little reference of THE BVI to deflect and say we are the major contributors.
Secondly, these nations instead of looking at us should also reform their own practices and additionally give incentives for their people and businesses to keep registration within their borders. The reports were submitted by what? Banks which are heavily regulated. Did someone turn a blind eye? Aye
Thereafter, did everyone forget when the US nearly singlehandedly ruin global fiance in 2007 to 2008 by what? Yes finding loopholes in their legislation and using it to their benefit. Resulting in some of the highest bailout packages and bankruptcy filings. How? Google it. Did everyone also forget all of the bailout packages due to financial misconduct within the UN members states? Did people also fail to notice financial misconduct is global and many situations still occur.
I mean how dare us be named with the bigwigs. These are unfortunate incidents and there is always room for updating policies but people’s failure to understand these simple variables is disappointing. I ask anyone to name one perfect system. Just one.
We do not support criminals, we do not support money laundering or terrorist financing, we do not support entities from avoiding laws. We are one of the most heavily regulated offshore jurisdictions globally and of course will be used for misconduct like any other jurisdiction. When such things occur it gives us the opportunity to be better. Many of their records are public and criminals still find ways to avoid law. It is apart of life.
This post is not to say I condone or validate the use of our product for misconduct for those with a lack of understanding. This is to say we are doing a great job with the resources we have and continue to be vigilant and combat misconduct. It is simply to state facts. You conduct your research and form your well-informed opinions instead of spouting unsubstantiated beliefs.
Dont bother engaging in counters as I probably won’t read it. I also don’t work in any financial institutions either. Read, dissect and act. While we clean up our end, I beg the others to do the same.
Reading this reminds me of where criminals would recruit little boys and push them through small spaces to gain access to properties.
FinCEN should try to fix the country where they are based. THE UNITED STATES IS A VERY HIGH RISK JURISDICTION!!! Clean your house first before you speak on others.
Again? BVI always in the news for tax scam and corruption
These leaked records show the surveilance system is working. I was paid by a BVI trust company to regularly compare records of directors and beneficial owners against databases of known criminals, political appointees, sanctioned individuals, and known accomplices of same. When, very rarely, one of the above surfaced in the client list, a suspicious activity report was raised to the authorities and the business relationship was terminated, which might have been an over-reaction. All this cost real money – the cost of keeping the business clean. The suspicious activity report gives the authorities the info they need to pursue and enforce. No reports = no possibility of enforcement. And sometimes the authorities wait to see what’s going on and follow the networks for a while, just like with drug investigations where they don’t bang the street dealer up until they trace their supplier and their Mr Big. Also, not all “suspicious activity “reports will be for something illegal. Even politically connected persons have legitimate business to do in tax-efficient, risk-controlled, and discrete ways. And suppose that you are a wholesaler dealing in tax-efficient, risk-controlled international trade: does a $200k order for lingerie seem unreasonable??? Looks like one container-load of cheap underpants to me. It all depends on the context….
The BVI was set up to be a dirty money conduit mainly from UK shell companies. We are complicit but not completely responsible. Read the report https://www.private-eye.co.uk/pictures/special_reports/tax-havens.pdf
“We are complicit but not completely responsible.”
I like how you phrased that. It’s an interesting but accurate perspective. In my view, the BVI is a pawn in a larger scheme that mostly benefits others.
It’s being used to achieve a goal for others in perhaps a way many people may not understand. I think from a local standpoint, many just see the money that is derived from the industry, but nothing else.
When locals have complained of the not getting jobs or advancement in the trust companies, there is a reason why.
Those companies were not set up for you. Jobs given to locals were mostly on the lower end and non-managerial as perhaps a token to please the local government, and satisfy local labor.
Again, the entire apparatus was not set up to benefit locals. It was set up to benefit others mostly. The money the government gets from those incorporation is just the price that is being paid to do business.
By the way, thanks for referencing that article. It gives a good understanding of these offshore financial centers, their genesis, and their purpose.