The US is preparing to introduce measures targeting banks in the British Virgin Islands (BVI) as part of a plan to “asphyxiate” the secretive financial network that fuels Iran’s Islamic Revolutionary Guard Corps (IRGC).
US Treasury Secretary Scott Bessent specifically mentioned the four-island archipelago, which is a British Overseas Territory, as a haven for the Iranian paramilitary’s assets when confirming the move on Tuesday.
Speaking at a meeting of G20 finance ministers in Asheville, North Carolina, he also confirmed that Washington had discussed the plan with its allies and indicated strong support from both the UK and EU.
The BVI is a self-governing territory that is not part of the UK, but the British government maintains “reserved powers” over foreign affairs, defence and security policy.
The Privy Council in London can also use a procedure known as an Order in Council to apply UK legislation to the territory.
The US’ interest in the BVI stems primarily from the fact that it is widely considered a tax haven due to loose rules around company registrations, particularly the fact that the territory does not require companies to make their owners or financial information public.
Parliament passed legislation requiring greater transparency as far back as 2008, but the Foreign Office has since effectively accepted the current regulations as an “interim step” towards a fully public company register by an unspecified future date.
This has made the territory an attractive place for investment, including illicit transactions conducted through shell companies registered in the BVI.
“We are tracking down the IRGC’s assets, and I will say it on worldwide TV, just so you know: We know where in the British Virgin Islands your accounts are at these trust companies,” said Bessent.
“We know the $100 million houses you have around the world. We are going to freeze those. We are going to our partners. We are going to close all that down.
“When I was a kid in South Carolina, we lived near a swamp, and as a result, we’d end up with a lot of poison snakes in our yard. And you would take either a rake or a machete, or a paddle from a boat, and you cut the head off.
“But the snake's tail kept wiggling, and you had to bury the head of the snake because the head of the snake was still poisonous, and there was venom there. So we are burying the head of the Iranian snake.
“The snake doesn’t know it’s dead yet, but it will stop wiggling when the sun goes down.”
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