BVI Grey List & BVI Blacklist Status | 2026 Detailed Guide

The British Virgin Islands operates as one of the world's leading offshore financial centers. Since 2023, the territory has been placed on several international monitoring lists as regulatory bodies worldwide intensify oversight of offshore financial centers.

This analysis examines the BVI grey list and BVI blacklist status across major international frameworks, the circumstances behind these designations, and practical implications for businesses.

FATF Grey List Addition (June 2025)

The Financial Action Task Force added the British Virgin Islands to its Monitoring List on 13 June 2025 following the Caribbean FATF's February 2024 Mutual Evaluation Report. This list—officially termed "Jurisdictions Under Increased Monitoring"—includes territories working to address gaps in their anti-money laundering regimes.

The Caribbean FATF rated the BVI as compliant or largely compliant with 36 of FATF's 40 Recommendations. The BVI grey list assessment focused on implementation effectiveness. The BVI FATF grey list placement concerns how well regulations work in practice rather than the legal framework itself.

The territory committed to working with FATF to improve how its AML regime operates.

FATF identified six areas requiring attention:

1. Risk-based supervision of trust and corporate service providers, investment businesses, and virtual asset service providers
2. Beneficial ownership information—ensuring it's accurate and accessible
3. Suspicious activity reporting quality
4. Money laundering investigations and prosecutions
5. Criminal proceeds seizure and confiscation
6. Making the asset management framework operational

In the 12 months before the British Virgin Islands' FATF grey list addition, the BVI completed substantial work:

• Amended over 20 pieces of legislation
• Strengthened its beneficial ownership regime with the secure VIRRGIN platform
• Conducted detailed risk assessments
• Issued clearer technical guidance
• Established a dedicated Sanctions Unit

Deputy Premier Lorna Smith stated the territory anticipates no business losses based on other Caribbean jurisdictions' experiences.

The BVI grey list status is distinct from the FATF blacklist ("Call for Action" list), which includes only Iran, North Korea, and Myanmar, and requires member jurisdictions to apply countermeasures. Croatia, Mali, and Tanzania exited the grey list during the same June 2025 plenary that added the BVI.

EU Tax Blacklist to Removal

The European Union added the BVI to its List of Non-Cooperative Jurisdictions for Tax Purposes (Annex I) on 14 February 2023—the jurisdiction's first such inclusion. The BVI EU blacklist designation came from an OECD Global Forum "Partially Compliant" rating issued in November 2022 regarding the exchange of information on request.

The EU automatically blacklists jurisdictions receiving ratings below "Largely Compliant."

The OECD rating assessed the BVI's framework from March 2016 through June 2020, including a "block period" from September 2017 to December 2018 following Hurricane Irma's devastation. The critical issue: the assessment excluded legislative reforms the BVI enacted in 2022 (BVI Business Companies Amendment Act and Regulations) because these took effect on 1 January 2023, after the evaluation period.

The BVI requested a supplementary OECD review in March 2023. OECD protocols typically require one-year waiting periods for supplementary reviews except under exceptional circumstances.

Permission was granted after only four months, acknowledging that concerns had been largely addressed.

Timeline: February 2023 to Present

On 17 October 2023, the EU Economic and Financial Affairs Council unanimously removed the British Virgin Islands EU blacklist designation. The jurisdiction transitioned to Annex II—cooperative jurisdictions with pending commitments. Just eight months from addition to removal showed the EU recognized the BVI's legislative progress.

Current Status: As of December 2025, the BVI remains on Annex II pending completion of OECD reassessment. The October 2025 EU Council update lists BVI among eleven jurisdictions on the cooperative watchlist. Annex II placement carries minimal practical consequences—it represents cooperative engagement rather than non-compliance.

While blacklisted, BVI entities faced three main barriers in EU member states:

• Withholding taxes on dividends and interest
• Limited participation exemptions
• DAC6 disclosure requirements

Additional Jurisdictional Lists

French National Blacklist

France maintained an independent, non-cooperative tax jurisdiction blacklist. The BVI appeared following a January 2020 addition alongside Anguilla, Bahamas, and Seychelles.

Premier Natalio Wheatley announced the British Virgin Islands blacklist removal from France's list on 7 March 2024, following legislative reforms and improved tax information exchange frameworks.

French businesses engaging BVI entities previously faced additional administrative requirements and potential withholding tax implications.

OECD Global Forum Rating

The OECD Global Forum conducts peer reviews assessing compliance with international exchange of information standards.

The BVI held "Largely Compliant" status until November 2022, when infrastructure challenges from Hurricanes Irma and Maria, combined with Panama Papers response requirements, resulted in a downgrade to "Partially Compliant."

The OECD published a supplementary 2025 report upgrading the BVI back to "Largely Compliant"—the second-highest rating—acknowledging improved information exchange capabilities.

EU AML High-Risk List (December 2025)

Following the BVI's June 2025 FATF grey list addition, the EU Commission added the jurisdiction to its AML high-risk list in December 2025, alongside Bolivia. The EU simultaneously removed Burkina Faso, Mali, Mozambique, Nigeria, South Africa, and Tanzania.

This designation differs from EU tax lists. The EU AML high-risk list addresses money laundering and terrorist financing concerns rather than tax cooperation.

The Fourth Anti-Money Laundering Directive mandates identifying third countries with AML/CFT gaps that threaten EU financial system integrity.

What EU entities now face:

EU entities conducting transactions involving BVI companies face tighter due diligence obligations—more detailed beneficial ownership information, deeper source of funds scrutiny, and closer transaction monitoring.

The Alternative Investment Fund Managers Directive 2.0 (AIFMD 2.0), effective 16 April 2026, prohibits marketing investment funds from EU AML-listed jurisdictions under private placement regimes.

The FATF clearly states that grey-listing does not require tighter due diligence for all transactions, cutting off customer classes, or blanket de-risking. Financial institutions should apply risk-based approaches, evaluating individual circumstances.

Practical Implications and BVI grey list advice

For BVI Companies

Organizations should expect additional documentation requirements. Banks may request full beneficial ownership verification, source of funds documentation, and transaction pattern explanations. Wire transfer processing times may increase.

Recommended preparations:

• Keep corporate records current
• Have ownership structure documentation ready
• Prepare business purpose statements
• Document transaction pattern evidence

For International Partners

Organizations conducting business with BVI entities must update risk assessment frameworks. The BVI grey list implications include:

• Reviewing customer portfolios to identify BVI connections
• Implementing tighter due diligence measures
• Scrutinizing introduced business arrangements
• Checking third-party service provider contracts
• Evaluating transaction routes

For the Financial Services Industry

Trust and corporate service providers, investment businesses, and virtual asset service providers face closer risk-based oversight from the Financial Services Commission. Industry participants must show compliance frameworks exceeding minimum requirements, with emphasis on suspicious activity reporting quality and beneficial ownership information accuracy.

Remediation Roadmap

The BVI government published a National Strategic Action Plan detailing completed reforms and remaining milestones.

Key reforms completed:

1. Supervision frameworks now apply to trust and corporate service providers through risk-based assessments
2. The beneficial ownership regime was strengthened through new regulations for global information sharing via the secure VIRRGIN platform
3. Suspicious activity reporting quality received clearer technical guidance for financial institutions
4. The Attorney General's office established a Sanctions Unit with increased National AML Coordination Unit resources
5. Asset seizure procedures were modernized through a new asset management framework

The government expects to complete the remaining work within the two-year window from June 2025, aiming for a mid-2027 grey list exit.

Common Misconceptions

What the grey list is NOT:

Several inaccuracies circulate regarding the BVI grey list effects. The placement does not constitute economic sanctions. The designation does not prevent international business formation, company incorporation, bank account opening, or cross-border transactions. The listing does not indicate regulatory collapse—multiple reputable offshore financial centers have successfully navigated FATF monitoring periods.

The BVI's technical compliance with 36 of 40 FATF Recommendations shows substantial alignment with standards. International law firms uniformly advised that grey-listing has no direct consequences for investors using BVI structures. The designation creates administrative friction through tighter due diligence but does not alter legal infrastructure or investment protection frameworks.

Frequently Asked Questions

What distinguishes a greylist from a blacklist?

Greylists identify jurisdictions working with international bodies to address gaps through committed action plans and timeframes. Blacklists designate high-risk, non-cooperative jurisdictions requiring countermeasures. The BVI appears exclusively on monitoring lists and has never been blacklisted by FATF.

How does BVI's grey listing affect existing companies?

Existing BVI companies remain fully operational with no legal validity changes. Businesses may experience tighter due diligence requirements from banks, potential wire transfer processing delays, and increased documentation requests. FATF clearly discourages wholesale de-risking or severing banking relationships based solely on grey list status.

When will BVI exit the FATF grey list?

The BVI government expects to complete the remaining recommended actions within two years of the June 2025 placement. Successful implementation could result in delisting by mid-2027. Removal requires showing sustained effectiveness across supervision, beneficial ownership transparency, suspicious activity reporting, investigation capacity, and asset confiscation.

What obligations do EU businesses face when engaging BVI entities?

EU businesses must apply tighter customer due diligence when conducting transactions with BVI counterparties, including additional beneficial ownership verification, detailed source of funds documentation, and closer transaction monitoring. AIFMD 2.0 regulations, effective April 2026, prohibit marketing investment funds from EU AML-listed jurisdictions.

Has BVI been removed from all EU tax lists?

The BVI was removed from the EU tax blacklist (Annex I) in October 2023. The jurisdiction transitioned to Annex II—the cooperative jurisdictions watchlist. As of December 2025, BVI remains on Annex II pending OECD reassessment completion. Annex II placement carries minimal consequences and means cooperative engagement rather than non-compliance.

What circumstances triggered BVI's various list additions?

The February 2024 Caribbean FATF Mutual Evaluation Report, identifying gaps in how anti-money laundering works, prompted FATF grey-listing in June 2025. The November 2022 OECD Global Forum "Partially Compliant" rating triggeredthe EU tax blacklist addition in February 2023. Both assessments excluded recent BVI legislative reforms.

How does BVI's status compare to other offshore financial centers?

Most major offshore financial centers—Cayman Islands, Malta, Gibraltar, Bermuda—have previously undergone FATF monitoring. The grey-listing means standard compliance evaluation applied consistently. Multiple jurisdictions successfully exited grey lists after implementing recommended reforms without lasting reputational damage or sustained business disruption.

Conclusion

The BVI's presence on international monitoring lists shows active work with evolving compliance standards. Removal from the EU tax blacklist within eight months and from France's blacklist shows the government can implement reforms efficiently.

The current BVI grey list status provides a clear path forward with specific objectives and a two-year window. The six FATF target areas mean refining existing frameworks rather than rebuilding from scratch.

Businesses using BVI structures should be aware of tighter due diligence requirements while recognizing that core advantages stay in place: political stability, strong legal infrastructure, established regulatory frameworks, and extensive treaty networks.

The temporary increase in administrative requirements is a transition phase.