Virgin Islands Adopts Cautious Approach to Beneficial Ownership Registers Amid Shifting International Landscape

In response to the shifting international landscape surrounding publicly accessible registers of beneficial ownership (PARBOs), the Government of the Virgin Islands has outlined its stance, balancing transparency with the imperative to respect fundamental human rights.

All Overseas Territories (OTs) and Crown Dependencies, including the Virgin Islands, had previously committed to implementing PARBOs in alignment with the European Union (EU) Fifth Anti-Money Laundering Directive. However, the decision last year by the European Court of Justice (ECJ) injected a new dimension into the discourse by underlining privacy and data protection as fundamental human rights that must be considered when providing such access.

While the Virgin Islands doesn’t fall within the ECJ’s jurisdiction, the government, in light of legal opinions on the ECJ judgment and the constitutionality of establishing a PARBO in the territory, acknowledges the need to consider the ECJ judgment to mitigate the risk of potential legal challenges on human rights grounds.

Hon. Lorna Smith, Minister for Financial Services, Labour, and Trade, emphasized the importance of safeguarding fundamental human rights. She stated, “The safeguarding of these fundamental human rights necessitates the application of a ‘legitimate interest test’ to determine access for those parties whose request for beneficial ownership information is genuinely aimed at preventing or combating money laundering and terrorist financing.”

Despite this cautious approach, the Virgin Islands has a long-standing history of actively combatting the misuse of its financial sector for illicit purposes. Minister Smith highlighted the commitment to transparency while respecting international law. The government will continue technical work to design and build systems aligned with the EU’s Fifth Anti-Money Laundering Directive, ensuring compliance with emerging standards, all while upholding human rights obligations.

Minister Smith affirmed the unwavering commitment to international standards, emphasizing the Virgin Islands’ role as collaborators and leaders in the global fight against financial crime. An exemplar of this commitment is the exchange of information agreement with the UK, which played a critical role in freezing over US$400 million in assets in accordance with relevant obligations under the Russian sanctions regime.

Looking ahead, the government pledges ongoing engagement with the United Kingdom (UK) and other partners to stay abreast of evolving regional, international, and global standards and best practices in implementing PARBOs. The delicate balance between transparency and respect for human rights remains a focal point as the Virgin Islands continues its commitment to combat financial crimes on the international stage.