Narayan AmmachchiThe British Virgin Islands (BVI) and Bolivia are likely to be added to the Financial Action Task Force’s (FATF) gray list for failing to do enough to curb illicit money flows.
The Paris-based watchdog is expected to announce the additions during its plenary session on June 13, according to Bloomberg.
A graylisting can trigger capital flight and tighter scrutiny from investors. The BVI is noted for its role as a hub for offshore finance, frequently used by foreign beneficial owners to shelter assets.
FATF evaluators have highlighted that BVI authorities often do not see illicit activities by these foreign owners as sufficiently connected to their jurisdiction, which undermines effective enforcement.
In Bolivia, the potential graylisting comes just ahead of a high-stakes presidential election in August.
A recent FATF follow-up report found ongoing deficiencies in areas such as beneficial ownership transparency, enforcement of financial sanctions, and oversight of virtual assets.
This could hurt Bolivia’s economy severely, as it has large deposits of lithium and mineral exports are crucial for its economic growth.
The FATF has toughened its review process, increasing scrutiny even on wealthier jurisdictions. The group also researches best practices to combat emerging threats such as sextortion.
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