In its 2018 International Narcotics Control Strategy Report, the US State Department says St Vincent and the Grenadines remains vulnerable to money laundering and other financial crimes as a result of drug trafficking, and its offshore financial sector.
The islands the report states remain a small but active offshore financial centre with a relatively large number of IBCs.
U.S. currency is often smuggled into the country via couriers, go-fast vessels, and yachts, the department says.
Money laundering is principally affiliated with drug production and trafficking as well as arms and ammunition exchanges for drugs.
The report said, financial institutions, including domestic and offshore banks and money remitters, are susceptible to money laundering.
The SVG FIU noted the following emerging trends: the use of cash-intensive businesses to launder funds (car dealerships, car rentals); wire fraud perpetrated on financial institutions and private and public entities; and advanced-fee scams, where the victim is promised a large sum of money for a small up-front payment.
As of 2017, the offshore financial sector includes five offshore banks, four offshore insurance companies, 15 registered agents, 96 mutual funds, two casinos, 6,331 IBCs, and 103 international trusts. There are no internet gaming licenses.
Physical presence is not required for offshore sector entities and businesses, with the exception of offshore banks.
The Financial INCSR 2018 Volume II Money Laundering 185 Services Authority is the regulatory body with the mandate to supervise the offshore financial sector and DNFBPs.
Resident nominee directors are not mandatory except when an IBC is formed to carry on banking business. Bearer shares are permitted for IBCs, but not for banks.
The report states that SVG government requires registration and custody of bearer share certificates by a registered agent who must also keep a record of each bearer certificate issued or deposited in its custody.