A growing rift between the British Virgin Islands (BVI) and the UK government has erupted over proposals for a new corporate ownership register, with MPs accusing the territory of attempting to shield financial criminals from scrutiny. The dispute threatens to escalate into a constitutional showdown as pressure mounts on the UK to intervene.

The controversy centres on the BVI’s proposed system for disclosing company ownership information. While overseas territories, including the BVI, have committed to introducing publicly accessible registers of beneficial ownership (PARBOs), critics argue that the new measures would render it nearly impossible to uncover the true owners of firms registered in the islands.

MPs Joe Powell and Andrew Mitchell, who co-chair the all-party parliamentary group on anti-corruption and responsible tax, have written to BVI Premier Natalio Wheatley, condemning the plan as a “shameful bid” to protect illicit financial activities. The former development minister Mitchell went further, accusing the BVI of attempting to “continue to manage stolen funds and assist in money laundering from sources close to the sex trade and the drugs trade.”

Under the BVI’s proposed system, only individuals involved in legal or regulatory proceedings related to financial crime could request ownership information. Additionally, the owners of companies would be notified of such requests and granted five days to object before any details are shared. Critics argue this provision would alert criminals to impending investigations, allowing them to move assets before authorities can act.

“This could expose journalists to legal or physical intimidation when investigating high-risk stories on drug cartels, kleptocrats, or human traffickers,” the MPs wrote in their letter. The proposals also require applicants to already know the identity of a company’s owner before requesting ownership details—an approach described as a “logical impossibility” by Mitchell and Powell.

The UK Foreign Office is reportedly dissatisfied with the BVI’s proposals and has urged the territory to revise its approach. Foreign Secretary David Lammy has prioritised efforts to combat illicit finance, with the issue of public ownership registers featuring prominently in recent talks with overseas territories. British officials made their stance clear during a summit with the territories in November.

Transparency International, a leading anti-corruption group, has echoed concerns raised by MPs, warning that the BVI’s policy could undermine global efforts to combat financial crime. Lawmakers are set to debate the progress of PARBOs in a Westminster Hall session on Wednesday, with the BVI’s approach expected to be a focal point of discussions.

There is growing speculation that the UK government could resort to an “order in council” to compel the BVI to comply. The measure, rarely used to preserve the self-governance of overseas territories, has been previously invoked to abolish the death penalty and decriminalise homosexuality in British territories.

The BVI government has declined to comment on the criticisms but has previously stated its commitment to transparency and tackling financial crime. It has argued that open registers require a “tailored approach” depending on the jurisdiction.

Source: TheGuardian.com

The Virgin Islands government has reaffirmed its commitment to combating financial crime and enhancing its financial regulatory framework as it implements the Virgin Islands National Action Plan. Premier Dr. the Honourable Natalio D. Wheatley shared key updates during the first government press conference of 2025, held on January 24.

“The Virgin Islands underwent a mutual evaluation review conducted by the International Monetary Fund on behalf of the Caribbean Financial Action Task Force,” said Premier Wheatley. “This process culminated in a comprehensive report published in February 2024, which outlines 64 specific actions necessary to enhance our AML, CFT, and CPF frameworks and policies.”

The National Action Plan, developed in response to the findings of the mutual evaluation, highlights the territory’s efforts to align with international anti-money laundering (AML), countering the financing of terrorism (CFT), and countering proliferation financing (CPF) standards. Premier Wheatley credited government agencies, law enforcement, competent authorities, and private sector partners for their contributions in driving significant progress.

“We are encouraged by the progress made so far in implementing the National Action Plan,” Premier Wheatley said. “Their collaboration has been instrumental in driving meaningful change and addressin

g the findings of the mutual evaluation.”

Significant legislative reforms and the publication of extensive guidance for the financial services sector were key priorities in 2024, with further reforms slated for 2025. Premier Wheatley emphasized that these measures are essential to maintaining compliance and governance in the financial sector.

As part of its outreach efforts, the government has led a “Commitment and Collaboration” series in partnership with the BVI Association of Compliance Officers, the BVI Association of Registered Agents, and other supervisory bodies. The next session is scheduled for February 13, 2025.

In addition, the government is preparing to launch a public awareness campaign under the theme “Business Done RIGHT”. RIGHT represents Responsibility, Integrity, Global honesty, and Transparency. Premier Wheatley noted, “This campaign is an important step in engaging and educating the public, fostering a collective effort across all demographics to combat financial crime in the Virgin Islands.”

Premier Wheatley highlighted the importance of the Asia-Pacific region as a key market for the Virgin Islands’ financial services industry. “The region generates significant business for the BVI,” he said. “We have built some strong relationships there which we must continue to strengthen. It is also important for us to ensure that we create awareness of our offerings and remind players why the BVI is the best place to do business.”

As the post-observation period for the mutual evaluation draws to a close, Premier Wheatley underscored the need for continued efforts to fully implement the National Action Plan.

“While much has been accomplished, there is still more to do,” he stated. “We remain steadfast in our resolve to execute the road map set out in the National Action Plan. I will continue to provide updates on our progress as we work to fully remediate the recommendations from the mutual evaluation and further strengthen the Virgin Islands’ AML, CFT, and CPF framework.”