The premier of the British Virgin Islands was due to appear in a Miami courtroom on Friday, accused of money laundering and conspiring to import cocaine in a case that has embarrassed the British overseas territory.

Andrew Fahie, 51, was arrested at a Miami airport along with the managing director of the territory's Ports Authority, according to a complaint by the U.S. Drug Enforcement Administration (DEA).

The hearing coincided with the release on Friday of a report commissioned by Queen Elizabeth's representative in the territory which concluded that its constitution and elected government should be suspended due to concerns about dishonest governance, effectively putting BVI under direct rule from London.

The U.S. District Court for the Southern District of Florida will hold the first hearing in Fahie's case at 1:30 p.m. ET (1730 GMT), an official said.

According to the complaint, a DEA informant claimed in meetings with Fahie, BVI ports Managing Director Oleanvine Maynard and her son Kadeem Maynard to be a cartel member looking to move thousands of kilograms of Colombian cocaine through Tortola island and eventually to the United States.

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

"Surely following the arrest of its Premier, the (Foreign Office) should now take direct control of the British Virgin Islands pending a further investigation into corruption and money laundering?" Chris Bryant, a member of Britain's parliament from the opposition Labour Party, wrote on Twitter on Friday.