TORTOLA, British Virgin Islands, CMC – The British Virgin Islands will remain under enhanced monitoring by the European Union after the bloc opted not to place the territory on its blocklist of non-cooperative tax jurisdictions in its latest review.
While avoiding the harsher designation, the British overseas territory continues to appear on the EU’s so-called grey list, formally known as the “state of play,” which includes jurisdictions considered cooperative but with outstanding commitments to fully meet international tax standards.
In the most recent update, the EU blocked 10 jurisdictions worldwide. Within the Caribbean, only the United States Virgin Islands and the Turks and Caicos Islands were named.
Blocked jurisdictions are viewed as failing to meet EU benchmarks for tax transparency, fair taxation, and cooperation with international tax authorities.
The BVI is among nine jurisdictions on the grey list that have committed to reforms but have yet to complete them. Belize is the only other Caribbean country included in that category.
Grey-listing signals continued engagement with the EU and spares a jurisdiction from the potential penalties associated with blocklisting.
Those penalties can be significant.
EU member states are encouraged to implement defensive measures against blocked jurisdictions, including heightened scrutiny of cross-border transactions, restrictions on access to certain EU funds, and tax policies that make commercial dealings more costly.
This is not the first time the British Virgin Islands has faced EU sanctions.
The territory was added to the blocklist in early 2023 due to concerns about international tax information exchange standards. Following legislative and regulatory adjustments, it was removed later that year and placed on the grey list, where it remains as it works through additional commitments.
The latest decision comes amid sustained pressure from the United Kingdom, which is responsible for the territory’s external affairs, for the BVI to implement a publicly accessible register of beneficial ownership.
The UK has urged its overseas territories to adopt fully public registers as part of broader anti-money laundering and transparency reforms.
BVI authorities have pushed back against full public access, arguing for a framework that grants information to law enforcement and those with a legitimate interest while protecting privacy and commercial confidentiality. Officials maintain that the territory already complies with international standards under its existing beneficial ownership regime and continues to engage constructively with global regulatory bodies.
The European Union updates its tax cooperation lists twice annually.
With another review expected later this year, the BVI’s status will depend on its progress in meeting outstanding commitments while navigating intensifying international scrutiny of offshore financial centres.
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