The premier of the British Virgin Islands has been arrested in Miami for alleged money laundering and conspiracy to import cocaine, sending shockwaves through the UK-controlled Caribbean tax haven.

The statement from the U.S. Drug Enforcement Agency (DEA) came just hours before a highly critical report into corruption recommended returning the British Overseas Territory to direct rule from London.

Andrew Fahie, 51, was arrested at a Miami airport on Thursday alongside the managing director of the British overseas territory's Ports Authority, according to a complaint from the U.S. Drug Enforcement Administration (DEA).

It said Fahie had agreed to allow an informant posing as a member of Mexico's Sinaloa drug cartel to use British Virgin Islands' ports to move cocaine in return for a $500,000 payout.

READ MORE

Ukraine crisis threatens global food security

Bridge Builders: The Anglo-Chinese Guo family

1980s China: in photographs

The premier's arrest is the latest hit to the public image of the administered islands, famous for their white sandy beaches, but also well-known as a popular tax haven for the world's rich and powerful to hide their wealth.

More than 370,000 companies are registered there, controlling hundreds of billions of dollars of assets around the world. 

The extent to which international politicians and business people were using the islands to hide their ownership of valuable assets became public following the release of the Panama Papers leaks. Since then, the BVI has struggled to restore its reputation.

"I realise this will be shocking news for people in the Territory," British Virgin Islands Governor John Rankin said in a statement. "And I would call for calm at this time."

DEA Administrator Anne Milgram said that the arrests should send a clear message that "anyone involved with bringing dangerous drugs into the United States will be held accountable, no matter their position."

According to the complaint, the informant pretended in meetings with Fahie, BVI ports Managing Director Oleanvine Maynard and her son, Kadeem Maynard, that they were a cartel member trying to move thousands of kilograms of Colombian cocaine through Tortola island and later on to Puerto Rico for export to New York and Miami.

"Fahie agreed to allow the confidential source to use the ports to ship his cocaine," according to the complaint, adding that he requested a $500,000 upfront payment in return.

The British Virgin Islands' top politician also allegedly asked for help in paying an $83,000 debt to a man in Senegal who had "fixed" some political issues for him, the complaint alleged.

Fahie was arrested in Miami after being separately shown designer shopping bags in a private plane, the complaint added.

British Foreign Secretary Liz Truss said in a statement she was "appalled" by the allegations.

She added that Fahie's arrest showed the importance of a recently completed but yet to be released Commission of Inquiry into allegations of corruption on the islands.

Deputy Premier Natalio "Sowande" Wheatley will remain acting premier indefinitely.

On the same day an inquiry report said The British Virgin Islands should have its constitution and elected government suspended and effectively be returned to direct rule from London.

The recommendation came from an inquiry commissioned in 2021 by Queen Elizabeth's representative on the island, Governor John Rankin, to investigate "the corruption, abuse of office, and other serious dishonesty" in the territory's governance.