The Ministry of Justice has issued a fresh warning to the island’s financial institutions, urging caution in dealing with certain international jurisdictions flagged for increased risk of money laundering, terrorist financing or proliferation financing.

In its latest AML-ATF advisory notice, the ministry highlights updates from the global watchdog Financial Action Task Force, including the addition of Bolivia and the British Virgin Islands to the greylist of countries under increased monitoring.

“These jurisdictions have committed to resolving swiftly the identified strategic deficiencies within agreed time frames,” the advisory states, referring to the findings of the task force.

However, Bermudian-regulated companies are being urged to take extra precautions when doing business connected to these nations.

Still on the FATF’s blacklist — officially known as “High-Risk Jurisdictions subject to a Call for Action” — are Iran, North Korea and Myanmar, with the advisory reaffirming that entities should “apply countermeasures and enhanced due diligence” when they cannot avoid exposure to these countries.

The advisory notes that in June, the BVI confirmed its strong commitment to work alongside the FATF to bolster its anti-money-laundering systems, especially after its Mutual Evaluation Report in November 2023.

Since then, the islands have taken concrete steps: boosting international co-operation, setting up a terrorist-financing strategy, improving supervision of financial institutions and tightening controls around non-profit organisations.

The BVI is advancing measures such as better oversight of trusts, enhancing the quality of suspicious-activity reports, increasing financial crime investigations and enforcing sanctions more aggressively.

However, the BVI was placed on the FATF’s greylist that month, which means it must now meet stricter international scrutiny — banks and companies may face tougher checks on transactions linked to the Overseas Territory. However, the islands’ commitment and continuing reforms aim to help remove that greylisting by October 2026.

Lorna Smith, the BVI deputy premier and junior minister for financial services, has also publicly stated that the relegation did not come as a surprise.

A revised national action plan, due next month, will set out the BVI’s strategy for exiting the list, and Ms Smith broke with other legislators, strongly rejecting claims that the territory would suffer economic fallout owing to its greylist status.

“I do not expect that we will lose any business,” she said. “When we consider other jurisdictions throughout the Caribbean which have been greylisted, none of them lost any business.”

The notice serves as a regulatory signal to Bermuda’s international business and financial services sectors, which are being advised to review customer relationships and update internal risk assessments in light of the advisory.

“These updates are critical to maintaining Bermuda’s reputation as a trusted and well-regulated jurisdiction,” the release stated.

It reminds companies to stay alert for any “transactions or business relationships involving these jurisdictions which may give rise to suspicion”.

• For the advisory notice with the full list of countries involved, see Related Media

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