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Key takeaways
- On 4 December 2025, the European Commission adopted the Delegated Regulation proposing to include the BVI in the EU AML List; the Delegated Regulation will not come into force until the twentieth day following its publication in the Official Journal of the European Union.
- No penalties or sanctions for BVI entities will arise from the BVI being added to the EU AML List.
- The Delegated Regulation acknowledges that the BVI has made significant progress on certain actions recommended in the MER and this progress is further evidenced by the CFATF recently upgrading the BVI's technical compliance rating so that the BVI is now rated as compliant or largely compliant with all of the FATF's 40 Recommendations.
BVI and the EU AML List: What you need to know
Proposal to add the BVI to the EU AML List
On 4 December 2025, the European Commission adopted a delegated regulation (the Delegated Regulation) proposing to include the British Virgin Islands (the BVI) in the EU list of 'high-risk third countries' (the EU AML List) which typically includes the countries on the Financial Action Task Force's (FATF) list of jurisdictions under increased monitoring (the Monitoring List).
When will the BVI be added to the EU AML List?
There will be a one-month review period (subject to extension) during which the European Parliament and the Council of the EU will scrutinise the Delegated Regulation. If neither object, the Delegated Regulation will be published in the Official Journal of the European Union and will enter into force on the twentieth day following such publication. Only when the Delegated Regulation comes into force will the BVI be added to the EU AML List.
Significant progress made to strengthen the BVI AML framework
In June 2025, the BVI was added to the Monitoring List (see here for our related client advisory). Generally, jurisdictions on the Monitoring List are subsequently added to the EU AML List as is the case with the BVI.
The Delegated Regulation acknowledges that since the adoption of the BVI Mutual Evaluation Report (the MER) in November 2023, the BVI has made significant progress on certain actions recommended in the MER. The BVI's commitment to strengthen its anti-money laundering, counter-terrorist financing and counter-proliferation financing framework is evidenced by the BVI's 2nd Enhanced Follow-up Report dated October 2025 issued by the Caribbean Financial Action Task Force (the CFATF) (the Report) (see here for our related client advisory).
As detailed in the Report, the CFATF upgraded the BVI's technical compliance rating in relation to four of the FATF's 40 Recommendations. Consequently, the BVI is now rated as compliant or largely compliant with all of the FATF's 40 Recommendations, which is a level of compliance that very few of the EU Member States, G20 members or other FATF members currently meet.
The earliest opportunity for the BVI to be removed from the Monitoring List will be late 2026 or 2027, which is expected to result in the BVI's removal from the EU AML List.
What is the impact for the BVI of being added to the EU AML List?
The inclusion of the BVI in the EU AML List will require EU financial institutions to apply enhanced customer due diligence measures, to the extent they do not already, when establishing business relationships or carrying out transactions involving the BVI. A number of EU financial institutions already do this in practice.
From April 2026, when the relevant provisions of the EU Alternative Investment Fund Managers Directive II (AIFMD II) are required to be implemented into national law of the EU Member States, as a result of the BVI being on the EU AML List, BVI funds will not be able to utilise the National Private Placement Regimes (NPPRs) under AIFMD II to access the European market. However, in our experience, BVI funds are unlikely to utilise the NPPRs and therefore the impact will be limited.
No penalties or sanctions for BVI entities will arise from the BVI being added to the EU AML List. Further, the EU AML List is unrelated to the EU's tax blacklist.
Walkers' and Walkers Professional Services' team of experienced regulatory compliance experts are able to assist with all aspects of our clients' needs. Please do not hesitate to get in touch with your usual contact or any of the contacts mentioned below for more information.
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