IS IT FINALLY TIME TO REDLINE ALL TRANSACTIONS INVOLVING BRITISH VIRGIN ISLANDS CORPORATIONS?

 

In today's risk-based compliance environment, with regulatory pressures increasing every year, isn't it time to consider ALL BVI corporations sufficient high-risk to redline (block) them? As a young associate handling Florida real estate transactions wealthy Latin American clients I was constantly faced with orders to facilitate the clients' purchases through British Virgin Islands companies. There was no way i could verify who was the beneficial owners of those companies, and whether the affluent clients were fronting for narcotics traffickers, arms dealers, or other transnational career criminals, but orders are orders.

I didn't for a moment buy their stories about wanting to hide their purchases from potential kidnappers in their home countries. I understood that they were, at best, tax cheats at home, but I feared that the ultimate beneficial owner of the luxury Miami property was either a career criminal, or someone sanctioned by OFAC, or under criminal indictment in the United States.

Above you can see just one more bit of evidence to support the proposition that to allow BVI companies to be part of any of your transactions is like shooting yourself in the foot. Taken from a recent New York Times article, "The Mystery of the Disappearing Van Gogh," it was part of a story showing that nobody really could determine who the true owner was of this Van Gogh masterpiece, but the transaction was approved nevertheless. Just where is the painting now? 

One of my forthcoming articles in the Tradecraft 101 series I am publishing here deal with money laundering through fine art and antiques, which was favored technique for moving wealth by my former narcotics trafficking clients, who religiously send representatives to Sotheby's and Christie's auctions each year in New York. Although some of the loopholes have since been closed, a sufficient number of them remain wide open enough for laundrymen to drive a truck through.

Getting back to the subject of BVI companies, any jurisdiction that literally runs arriving investigative journalists out of town, deserves to be blacklisted, irrespective of any weak regulatory action from abroad. I propose that any and all real estate transactions, and wire transfers, which are done in the name of an (anonymous) BVI corporation be blocked in advance. Return the money from whence it came, as you will never truly know who the beneficial owners are. If you have any doubts, look at the document above, and read the Times article.

 Given the statement made to undercover officers in the ANDREW FAHIE case, to the effect that there is major drug trafficking occurring in the BVI, with local facilitation by government officials, and that the UK Government came close to Direct Rule, due to rampant corruption there, the system is flawed, and it requires tough love to reform it from within. Let the word get out that you will no longer accept BVI corporations for any purpose, and let the major law firms that use that tool know it.