BVI named in 'FinCen Files' leaks

Pedro Gonçalves
clock
BVI named in 'FinCen Files' leaks

The BVI has been caught in the new exposé from the International Consortium of Investigative Journalists that reveals major flaws in the global anti-money laundering safeguards and spotlights trillions of dollars in dirty money flowing freely through major international banks.

The scandal involves more than 2,500 leaked documents that banks sent to the US Financial Crimes Enforcement Network (FinCen) between 2000 and 2017.  

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."

At least 20% of the files contained clients who listed their address as the British Virgin Islands"

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". 

"NoviRex's listed owners were two other companies, bothincorporated in the British Virgin Islandsand 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)," the ICIJ said."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.

HSBC, Barclays Bank, JP Morgan, Standard Chartered and Deutsche Bank were all named as helping to move dirty money around the world.

The UK has been named a "higher risk jurisdiction" by FinCEN because of the large number of firms based in the country (3000+) that are named in the leaks.

"The FinCEN leaks show how the world's biggest banks have been moving billions of dollars of dirty cash - and four years since the Panama Papers exposed just how central the UK's tax havens were to global money laundering, they are still at the heart of it. At least 20% of the files contained clients who listed their address as the British Virgin Islands, which is no surprise given that they're still selling secrecy," Ava Lee, anti-corruption campaign leader at Global Witness said.

This week, the British Virgin Islands government officially announced its commitment to the implementation of public registers of beneficial ownership in the territory

In a statement released earlier this month FinCEN condemned the disclosure of the leaked documents and said it had referred the matter to the US Department of Justice.

"The Financial Crimes Enforcement Network is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed suspicious activity reports (SARs), as well as other sensitive government documents, from several years ago," it stated.

"As FinCEN has stated previously, the unauthorised disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports."

 

Subscribe to International Investment's free, twice-daily, newsletter