Risk Indicators
- FATF/EU Blacklist/Greylist (Lower Concern)
- Terrorism Financing (Lower Concern)
- US Dept of State INCSR
- Proliferation Financing
- Corruption
- Criminality
- Resilience & Governance
- Financial Transparency
- Offshore Finance Centres
- Sanctions
Background
The United States Virgin Islands—Saint Thomas, Saint John, and Saint Croix—were controlled by Denmark from the 17th and early 18th centuries, with sugarcane production shaping the economy through African slave labor. Following the abolition of slavery in 1848 and a period of economic decline, the islands were purchased by the United States in 1917. Their more recent history includes severe disruption from Hurricane Irma in 2017, followed less than two weeks later by Hurricane Maria, which brought heavy winds and flooding rains to Saint Croix.
The islands’ political and economic setting is tied to the broader development of the United States, which emerged from the American Revolution and expanded through the 19th and 20th centuries. The nation was shaped by major upheavals including the Civil War and the Great Depression, before achieving sustained postwar growth and rapid technological advancement. As an overseas possession, the United States Virgin Islands reflect both a distinct Caribbean past and their connection to a nation that became a leading global power.
AML & Terrorist Financing
As a U.S. territory, the United States Virgin Islands falls within a sophisticated federal AML/CFT framework that FATF has rated favorably overall, with particularly strong results in terrorist-financing and proliferation-financing outcomes. Nevertheless, significant vulnerabilities remain around beneficial-ownership transparency, complex legal structures, and limited AML coverage and supervision of certain non-financial professions, while the territory’s inclusion in the Puerto Rico HIFCA and HIDTA regions highlights its exposure to cross-border financial crime and drug-trafficking risks. FinCEN, OFAC, DOJ/MLARS, IRS Criminal Investigation, and other agencies contribute to the response, but the interaction between federal controls, local enforcement, and emerging threats such as digital assets and cyber-enabled fraud warrants closer attention.
Sanctions
As a U.S. territory, the United States Virgin Islands is subject to sanctions administered by the Treasury Department’s Office of Foreign Assets Control (OFAC), including comprehensive country measures and targeted restrictions on individuals, entities, and facilitators. These enforcement efforts draw on IEEPA, coordination with the DOJ and Commerce Department, and secondary sanctions addressing evasion networks linked to Russia, Iran, North Korea, and Venezuela through hubs such as Türkiye, the UAE, and Southeast Asia. No international sanctions are currently in force against the United States Virgin Islands, while OFAC continues adapting its approach to financial intermediaries, transshipment routes, dual-use technology, and emerging cryptocurrency-based evasion methods.
Criminality
The United States Virgin Islands’ crime environment is shaped by wider US-linked challenges, including human trafficking, drug and firearms markets, cyberattacks, fraud, and other financial crimes. Criminal networks and gangs remain active, while concerns about official corruption, money laundering, and public trust in law enforcement add complexity to efforts by federal, state, and local authorities.
Reports
For the United States Virgin Islands, applicable U.S. State Department materials describe continued adherence to major arms control and nonproliferation commitments, including verified completion of the U.S. chemical weapons stockpile destruction and ongoing engagement with the OPCW. The 2025 Human Trafficking in Persons assessment places the United States on Tier 1 while noting complex vulnerabilities, uneven prosecution and victim-support challenges, and exploitation risks spanning numerous communities and industries.
Economy & Investment Climate
The United States Virgin Islands combines a tourism-led economy with rum distilling, watch assembly, pharmaceuticals, electronics, and construction, supported by free-port access and use of the U.S. dollar but shaped by the legacy of HOVENSA’s closure. Its investment appeal is balanced by high public debt, budget pressures, costly energy and living expenses, and resource constraints involving freshwater, coral reefs, waste management, and coastal development.
Cryptocurrency Regulations
Cryptocurrency is permitted in the United States Virgin Islands but is not legal tender, and its uncertain regulatory position is shaped by Bulletin 2022-01, the Division of Banking, Insurance, and Financial Regulation, and the Virgin Islands Banking Board’s treatment of virtual currency licensing. The 2022 Virgin Islands Money Laundering Risk Assessment identifies VASPs as a high-risk sector, while federal-style AML, Travel Rule, securities, and IRS tax obligations create significant compliance considerations despite the absence of a dedicated exchange or VASP regime.
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