Britain is poised to impose a form of direct rule over the British Virgin Islands after the Caribbean territory’s premier was arrested in Miami on suspicion of drug running, and a UK-appointed commission of inquiry found rampant failings in governance. Andrew Fahie appeared in federal court in Miami on Friday, a day after he was arrested by the US Drug Enforcement Agency in an elaborate sting operation that also snared the chief executive of the BVI port authority and her son. Hours before his court appearance, the commission of inquiry – launched in 2021 – reported on widespread abuses, including millions of dollars of government funds that were spent each year by politicians and ministries without proper process. In its highly critical final report, the commission, led by Judge Sir Gary Hickinbottom, recommended that the territory should have its constitution suspended, its elected government dissolved and effectively be ruled from London. The UK foreign secretary, Liz Truss, did not immediately impose direct rule but said the report showed “clearly that substantial legislative and constitutional change is required to restore the standards of governance that the people of the BVI are entitled to”. The UK is already responsible for defence and foreign policy in the BVI, which is a British overseas territory, but Governor General John Rankin – Queen Elizabeth’s representative on the island – is now expected to take charge of all BVI domestic policy and budgets. The report is not directly linked to Fahie’s dramatic arrest, but the British government had been clearly aware of the US Drug Enforcement Agency investigation into drug running. After the DEA sting operation on Thursday, British ministers decided to rush out publication of the Hickinbottom report, short-circuiting a planned consultation procedure with island politicians. The UK last imposed direct rule on an overseas territory when it took charge of the Turks and Caicos Islands in 2009, and the British government is clearly nervous over how its plans will be greeted on the islands. The UK minister for the overseas territories, Amanda Milling, is now to fly to the BVI for discussions with local officials. Allegations of rampant criminality on the BVI had prompted starkly contrasting approaches from US and UK authorities, with the UK adopting a public commission of inquiry dominated by lawyers and the US launching an elaborate undercover police operation that eventually led to the territory’s most senior elected official. The BVI commission of inquiry was launched in 2021 amid allegations of corruption and drug running at the highest level on the islands. Those claims were not investigated by the commission, but its 1,000-page report concluded that maladministration was so endemic that it would be impossible to prevent corruption and conflicts of interest in the awarding of contracts, appointments to public office and the administration of money. The UK has come under increasing pressure to crack down on drug trafficking through the territory, which has become a major conduit for narcotics into the US. Fahie was arrested on a private jet in Miami, where he was being shown what he thought was a $700,000 payment in return for allowing BVI ports to be used as a “resting place” for cocaine from Mexico before it was shipped to Puerto Rico and Miami. US agencies had wiretapped an informant acting as drug runner and in a succession of meetings negotiated a deal that Fahie calculated would bring him more than $7m. At a court hearing conducted via Zoom on Friday, Fahie did not speak other than to state his name and date of birth and agree for the hearing to be conducted online. A bond hearing was set for next Wednesday. In his report, Hickinbottom insisted the suspension of the powers of elected ministers “was not only warranted but essential if the abuses which I have identified are to be tackled and brought to an end”. He said that successive BVI governments had “deliberately sought to avoid good governance by not putting processes in place and where such processes are in place by passing them or ignoring them as and when they wish – which is regrettably often”. Hickinbottom said he had no desire to frustrate the islands’ aspirations to self-determination as a modern democracy and recommended a year-long constitutional review to end opportunities for abuse and dishonesty in public office. He urged the governor general to set up an advisory body of local people with whom he should consult about how to rule the island. Hickinbottom said he had made his recommendations, including the dissolution of the assembly, “with a heavy heart”. “[But] unless the most urgent and drastic steps are taken, the current situation with the elected government deliberately ignoring the tenets of good governance will go on indefinitely,” he said. Britain is poised to impose a form of direct rule over the British Virgin Islands after the Caribbean territory’s premier was arrested in Miami on suspicion of drug running, and a UK-appointed commission of inquiry found rampant failings in governance. Andrew Fahie appeared in federal court in Miami on Friday, a day after he was arrested by the US Drug Enforcement Agency in an elaborate sting operation that also snared the chief executive of the BVI port authority and her son. Hours before his court appearance, the commission of inquiry – launched in 2021 – reported on widespread abuses, including millions of dollars of government funds that were spent each year by politicians and ministries without proper process. In its highly critical final report, the commission, led by Judge Sir Gary Hickinbottom, recommended that the territory should have its constitution suspended, its elected government dissolved and effectively be ruled from London. The UK foreign secretary, Liz Truss, did not immediately impose direct rule but said the report showed “clearly that substantial legislative and constitutional change is required to restore the standards of governance that the people of the BVI are entitled to”. The UK is already responsible for defence and foreign policy in the BVI, which is a British overseas territory, but Governor General John Rankin – Queen Elizabeth’s representative on the island – is now expected to take charge of all BVI domestic policy and budgets. The report is not directly linked to Fahie’s dramatic arrest, but the British government had been clearly aware of the US Drug Enforcement Agency investigation into drug running. After the DEA sting operation on Thursday, British ministers decided to rush out publication of the Hickinbottom report, short-circuiting a planned consultation procedure with island politicians. The UK last imposed direct rule on an overseas territory when it took charge of the Turks and Caicos Islands in 2009, and the British government is clearly nervous over how its plans will be greeted on the islands. The UK minister for the overseas territories, Amanda Milling, is now to fly to the BVI for discussions with local officials. Allegations of rampant criminality on the BVI had prompted starkly contrasting approaches from US and UK authorities, with the UK adopting a public commission of inquiry dominated by lawyers and the US launching an elaborate undercover police operation that eventually led to the territory’s most senior elected official. The BVI commission of inquiry was launched in 2021 amid allegations of corruption and drug running at the highest level on the islands. Those claims were not investigated by the commission, but its 1,000-page report concluded that maladministration was so endemic that it would be impossible to prevent corruption and conflicts of interest in the awarding of contracts, appointments to public office and the administration of money. The UK has come under increasing pressure to crack down on drug trafficking through the territory, which has become a major conduit for narcotics into the US. Fahie was arrested on a private jet in Miami, where he was being shown what he thought was a $700,000 payment in return for allowing BVI ports to be used as a “resting place” for cocaine from Mexico before it was shipped to Puerto Rico and Miami. US agencies had wiretapped an informant acting as drug runner and in a succession of meetings negotiated a deal that Fahie calculated would bring him more than $7m. At a court hearing conducted via Zoom on Friday, Fahie did not speak other than to state his name and date of birth and agree for the hearing to be conducted online. A bond hearing was set for next Wednesday. In his report, Hickinbottom insisted the suspension of the powers of elected ministers “was not only warranted but essential if the abuses which I have identified are to be tackled and brought to an end”. He said that successive BVI governments had “deliberately sought to avoid good governance by not putting processes in place and where such processes are in place by passing them or ignoring them as and when they wish – which is regrettably often”. Hickinbottom said he had no desire to frustrate the islands’ aspirations to self-determination as a modern democracy and recommended a year-long constitutional review to end opportunities for abuse and dishonesty in public office. He urged the governor general to set up an advisory body of local people with whom he should consult about how to rule the island. Hickinbottom said he had made his recommendations, including the dissolution of the assembly, “with a heavy heart”. “[But] unless the most urgent and drastic steps are taken, the current situation with the elected government deliberately ignoring the tenets of good governance will go on indefinitely,” he said.