The Virgin Islands has reported significant progress in strengthening its anti-money laundering and counter-terrorist financing framework, with international watchdog the Financial Action Task Force (FATF) acknowledging the Territory’s continued implementation of reforms aimed at removing the jurisdiction from its “grey list.”

The recognition came during the FATF Plenary held from June 17 to 19, 2026, where the Virgin Islands updated member states on its progress in implementing the Action Plan agreed after the Territory was placed under increased monitoring in 2025.

Attorney General Dawn J. Smith led the Virgin Islands delegation, accompanied by National AML/CFT Coordinator Lavonna Burrows and Financial Services Commission Deputy Managing Director for Regulation Glenford Malone.

A Long Road to Increased Monitoring

The latest progress represents another milestone in what has become a years-long effort to strengthen the Virgin Islands’ anti-money laundering (AML), counter-terrorist financing (CFT), and counter-proliferation financing (CPF) regime.

The process began with the Caribbean Financial Action Task Force’s (CFATF) Mutual Evaluation Report, which assessed the Virgin Islands’ compliance with international standards established by the FATF.

Although the Territory has long maintained a sophisticated regulatory framework supporting one of the world’s largest offshore financial centres, international assessors concluded that while many technical laws were in place, greater emphasis was needed on demonstrating their effectiveness through enforcement, supervision, investigations and prosecutions.

Particular attention was placed on strengthening oversight of trust and corporate service providers, improving beneficial ownership transparency, increasing financial investigations, recovering criminal assets and enhancing the use of financial intelligence.

Following those assessments, the FATF placed the Virgin Islands under increased monitoring—commonly referred to as the “grey list”—in June 2025 after the Territory made a high-level political commitment to implement a comprehensive Action Plan within agreed timelines.

Unlike jurisdictions placed on the FATF’s blacklist, countries and territories on the grey list are not considered non-cooperative but are subject to enhanced international monitoring until agreed reforms are completed.

Why the Grey List Matters

Placement on the grey list does not impose sanctions, nor does it prevent financial institutions from operating.

However, it can increase scrutiny from international banks and correspondent banking partners, potentially making cross-border financial transactions more complex and increasing compliance costs for businesses operating within the jurisdiction.

For a financial services industry that contributes significantly to government revenue and the Virgin Islands economy, maintaining international confidence remains a strategic priority.

Government officials have repeatedly stressed that successfully completing the FATF Action Plan is essential to protecting the Territory’s reputation as one of the world’s leading international financial centres.

More Than 92 Percent of Strategic Actions Completed

According to Government, more than 92 percent of the measures contained within the revised National Strategic Action Plan (NSAP) have either been completed or are ahead of schedule.

The National Strategic Action Plan serves as the Territory’s roadmap for implementing the remaining FATF Action Plan commitments and was approved by the National Anti-Money Laundering Coordinating Council.

Among the key achievements highlighted during the latest reporting cycle were:

• The operational launch of the Virgin Islands’ new asset management framework to improve the seizure, recovery and management of criminal assets.
• Enhanced risk-based supervision by the Financial Services Commission through updated risk assessment tools for trust and company service providers.
• Expanded regulatory oversight, including additional fit-and-proper assessments, on-site inspections and compliance reviews.
• Increased staffing and operational resources for the Royal Virgin Islands Police Force’s Financial Crime Unit and the Office of the Director of Public Prosecutions.
• Territory-wide outreach programmes designed to strengthen compliance among higher-risk sectors, including trust companies, investment businesses and virtual asset service providers.
• Improvements in the quality of Suspicious Activity Reports submitted by regulated businesses.
• Continued enhancement of beneficial ownership transparency through the VIRRGIN platform, allowing competent authorities and international partners access to accurate ownership information.
• Greater corporate transparency through public access to basic information relating to limited partnerships.

Following the Plenary, the FATF acknowledged the Territory’s continued progress, including the successful operationalisation of its new asset management framework.

Officials Welcome International Recognition

Attorney General Dawn J. Smith described the FATF’s acknowledgement as evidence that the Virgin Islands’ coordinated national strategy is producing measurable results.

She said the Territory had strengthened supervision, improved beneficial ownership transparency, expanded guidance to industry and enhanced the operational capabilities of competent authorities responsible for combating financial crime.

Junior Minister for Financial Services and Economic Development Lorna G. Smith also welcomed the positive assessment, describing it as the result of close collaboration between Government, regulators, law enforcement agencies and the private sector.

She said the Government remained committed to completing the remaining measures while continuing to strengthen the Territory’s regulatory framework and protecting the Virgin Islands’ reputation as a transparent, resilient and internationally respected financial centre.

The Final Stretch

Although substantial progress has been made, the Virgin Islands remains under FATF increased monitoring until the organisation determines that all Action Plan commitments have been fully implemented and independently verified.

The Territory will continue submitting progress reports to both the FATF and the Caribbean Financial Action Task Force as it works toward exiting the grey list.

Government officials remain optimistic that the pace of reforms—combined with continued cooperation among regulators, law enforcement agencies and the financial services industry—will position the Virgin Islands to successfully complete the process and reinforce confidence in one of the Territory’s most important economic pillars.