The BVI has been named.

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

The leaked documents have, therefore, been called the FinCen Files and involve about two trillion dollars worth of transactions that uncover how some of the world’s largest banks have allowed criminals to move ‘dirty money’ around the world.

FinCen is tasked with combating financial crime. And all concerns about transactions made in US currency are sent to FinCEN, even if they took place outside the US.

The BVI’s involvement

Some of the international banks named in the scandal are Barclays Bank in London, Deutsche Bank and Bank of New York Mellon. In many instances, the banks processed transactions to companies registered in so-called secrecy jurisdictions and didn’t even know the owners of these accounts. And that’s where the BVI comes in.

One of the organisations now probing the documents is the International Consortium of Investigative Journalists (ICIJ). They also broadcast the Panama Papers and Paradise Papers.

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.”

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”.

Here’s what the ICIJ said about NoviRex and the BVI: “NoviRex’s listed owners were two other companies, both incorporated in the British Virgin Islands and 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).”

Strange $200K lingerie payments in BVI

“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.

Over 3,000 UK companies are named in the FinCEN files – more than any other country. FinCen has described the UK as a “higher risk jurisdiction”.

Implications for BVI

Amid the leaked FinCen files, Premier Andrew Fahie announced his commitment to implementing publicly accessible registers of company beneficial ownership for the British Virgin Islands.

This is something the UK and European Union are pressuring the BVI to do as it is believed naming owners of companies will help countries identify tax evaders and stop money laundering.

While making the commitment to implement publicly accessible registers of company beneficial ownership, Premier Fahie listed a number of reservations.

He said such action could result in a breach of the rights of the “law-abiding and tax-paying individuals who are far greater in number than the targeted law-breakers.” He said children could be at risk and that the information could be easily accessed by persons with ill intent such as kidnappers.

Meanwhile, amid the FinCen files, the UK said it will be reforming its register of company to clamp down on fraud and money laundering.