Vancouver, Canada — The Financial Action Task Force (FATF) has expanded its grey-list of jurisdictions under increased monitoring to include the British Virgin Islands (BVI) and Bolivia, a move that will reverberate across global finance, trade, and corporate structuring. The decision, announced following FATF’s latest plenary session in 2025, signals heightened concerns over anti–money laundering (AML) and counter–terrorist financing (CTF) controls in both jurisdictions.
For companies, financial institutions, and professional service providers with operations, holdings, or clients tied to either jurisdiction, the implications extend beyond compliance checklists. Grey-listing creates a series of secondary risks — from delayed payments and account openings to increased insurance premiums and added scrutiny on cross-border corporate transactions. These knock-on effects often emerge not from the FATF itself, but from the way counterparties, correspondent banks, and regulators in third countries respond.
Understanding the FATF Grey-List Process
The FATF grey-list is officially termed the list of “Jurisdictions Under Increased Monitoring.” Placement on the list does not mean a country is subject to sanctions. Still, it does indicate that strategic deficiencies in AML/CTF frameworks have been identified and that the jurisdiction has formally committed to work with the FATF to address them within agreed timelines.
Grey-listing often leads to intensified due diligence requirements by foreign financial institutions. Banks may apply enhanced know-your-customer (KYC) measures, require additional documentation for transactions, and conduct more frequent compliance reviews. These measures can cause significant operational friction for businesses that rely on fast-moving capital flows, particularly in sectors like fund management, shipping, commodities, and international trade.
The Inclusion of the British Virgin Islands
The BVI’s inclusion is particularly notable given its status as one of the world’s leading jurisdictions for corporate incorporations. Thousands of special purpose vehicles (SPVs), investment funds, and holding companies are registered in the territory. While the BVI has long been associated with strong legal infrastructure and professional corporate services, FATF has flagged deficiencies in beneficial ownership transparency, enforcement of customer due diligence requirements, and timely access to ownership records for law enforcement.
These deficiencies are not necessarily a reflection of widespread illicit activity, but instead of the speed and depth of regulatory reform compared to evolving global standards. In practice, banks and counterparties outside the BVI are likely to begin treating BVI entities as higher-risk customers, triggering:
Delays in wire transfers due to secondary AML reviews
Requests for detailed corporate structures and shareholder identities
Increased rejection rates for new account applications
Higher costs for compliance support services
The Inclusion of Bolivia in the grey list stems from concerns over its AML supervisory framework, particularly regarding cash-intensive sectors, informal cross-border trade, and the limited enforcement of suspicious transaction reporting. While Bolivia is not a dominant player in global corporate structuring, it is a key exporter of minerals and agricultural commodities.
Bolivian companies relying on international settlement networks will face similar hurdles: banks in major clearing hubs may hold or reject transactions until additional verification is provided. Exporters could see payment timelines stretch from days to weeks. For international investors, even those without direct Bolivian exposure, counterparties in the supply chain that source from Bolivia may now be subject to more intensive background checks.
Secondary Risk for Corporate Structuring
The most significant impact of grey-listing is often indirect. Entities registered in non-grey-listed countries can still experience delays and increased scrutiny if they are part of a group structure that includes a grey-listed jurisdiction.
For example:
Bank Correspondent Risk — A fund domiciled in Luxembourg but holding its portfolio via a BVI SPV may face delays because the correspondent bank reviewing a transaction focuses on the ultimate asset-holding entity’s jurisdiction.
Professional Indemnity and D&O Insurance — Underwriters may increase premiums or add exclusions for companies with exposure to grey-listed jurisdictions.
Cross-Border M&A — Deals can stall while acquirers conduct extended due diligence on any corporate entities incorporated in BVI or linked to Bolivian operations.
Case Study One: Multinational Fund with BVI Holdings
A private equity fund headquartered in London manages a diversified portfolio through multiple jurisdictional layers. Several of its investment vehicles are incorporated in the BVI for tax neutrality and corporate governance flexibility.
Following the grey-listing announcement, one of the fund’s European banks initiated a comprehensive review of all BVI-linked accounts. Transfers to and from those accounts were placed under enhanced monitoring, requiring transaction narratives, updated corporate structure charts, and certified copies of shareholder registers.
The fund’s management team had to engage compliance consultants to prepare harmonized source-of-funds documentation and transaction explanations. While the fund remained fully compliant, the added administrative load increased transaction turnaround times by as much as 40 percent during the first quarter post-listing.
Case Study Two: Bolivian Mining Exporter
A Bolivian mining company exporting lithium faced immediate challenges securing payment from a European buyer. The buyer’s bank, based in Germany, flagged the inbound funds from Bolivia for enhanced due diligence. The bank requested evidence of the mining company’s AML compliance program, detailed shipping documents, and verification of beneficial owners.
While the exporter eventually received payment, the delay disrupted cash flow and strained supplier relationships. The company has since opened accounts with multiple correspondent banks to diversify settlement channels, but each account required significant upfront compliance work.
Case Study Three: Professional Services Firm Restructuring SPV Incorporations
An international law firm specializing in private wealth structures advised several clients to reconsider the domicile of their planned SPVs. While BVI incorporation had been the default, the grey-listing increased the perceived onboarding risk at target banks in Europe and North America.
The firm developed a phased redomiciliation plan for affected clients, moving new incorporations to jurisdictions with equivalent corporate flexibility but stronger FATF ratings. Transitional guidance was issued to maintain operational continuity for existing BVI entities while preparing enhanced compliance packages for counterparties.
Mitigation Strategies for Affected Structures
Enhanced Documentation — Prepare comprehensive corporate charts, shareholder registers, and beneficial ownership declarations in advance.
Pre-Transaction Clearance — Submit transaction narratives to counterparties’ compliance teams before initiating large transfers.
Jurisdictional Diversification — Spread SPV and holding company domiciles across multiple neutral jurisdictions to avoid concentration risk.
Bank Relationship Management — Maintain accounts with at least two correspondent banks to provide operational redundancy.
Regulatory Engagement — Monitor and participate in consultations in the grey-listed jurisdiction to anticipate policy changes that may support delisting.
Looking Ahead: Potential Paths to Delisting
Both BVI and Bolivia have committed to FATF action plans. Historically, jurisdictions remain on the grey-list for 12 to 36 months, depending on the speed of reforms and the FATF’s assessment cycles. Key milestones for delisting include:
Demonstrating effective enforcement of AML/CTF regulations
Improving access to beneficial ownership information
Increasing suspicious transaction reporting volumes and quality
Enhancing cross-border cooperation with foreign regulators
Amicus International Consulting Analysis
For corporate clients, the inclusion of BVI and Bolivia on the FATF grey-list is less about immediate legal prohibitions and more about the cascading operational and reputational effects. Secondary risk is the actual cost driver, and without proactive structuring, it can erode the efficiency gains that originally motivated jurisdictional choices.
Amicus International Consulting recommends that clients with exposure to either jurisdiction begin compliance strengthening immediately, even if their operations are entirely lawful. A well-prepared documentation set, coupled with jurisdictional diversification, can insulate businesses from the friction of grey-list spillover effects.
Grey-listing is not permanent, but the market’s memory can be extended. Investors, banks, and regulators often continue applying heightened scrutiny long after a jurisdiction is delisted. Strategic planning now will deliver operational resilience later, regardless of FATF timelines.
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