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Designated Businesses
The Designated Businesses (Registration and
Oversight) Act 2015 (‘the DBROA15’) came into
force on 26 October 2015. The DBROA15 gave
the Authority responsibility for the oversight of
certain businesses and professions’ (‘designated
businesses’) adherence to the Island’s AML/CFT
regime.
Designated businesses are registered and overseen
by the Authority for AML/CFT purposes only.
Designated businesses retain their status with
any bodies responsible for their wider business,
competence, or other matters.
All designated businesses are subject to a periodic
visit by the Authority, or a body to whom the
Authority has delegated necessary powers, to test
compliance with AML/CFT legislation. At present
the Authority has delegated its oversight powers
to the following professional bodies: Institute of
Chartered Accountants in England andWales;
Association of Chartered Certified Accountants;
Isle of Man Law Society; Institute of Certified
Bookkeepers; Institute of Financial Accountants;
and International Association of Bookkeepers. The
delegated professional bodies are responsible
for the oversight process and feed the findings of
their visits back to the Authority. Registration and
enforcement powers are retained by the Authority.
Ninety-nine designated businesses have elected
to be overseen by a designated body with the
remaining 217 being overseen by the Authority.
Registration
The DBROA15 contains transitional provisions
which mean that designated businesses
established before 26 October 2015 could continue
to undertake designated business, provided they
submitted completed applications for registration
to the Authority by 26 April 2016. Any businesses
formed after 26 October 2015 must be registered
with the Authority before undertaking designated
business.
At the time of publication the Authority has
registered 316 designated businesses, which are
broken down as follows:
40 law firms
183 accounting firms
19 estate agents
58 money lenders
10 convertible virtual currency providers
4 specified non-profit organisations
2 high value goods dealers
Entities may undertake more than one category of
designated business.
The DBROA15 states that the Authority must refuse
to register a designated business if it is not satisfied
that the applicant, or a specified person in relation
to the applicant, is a fit and proper person. During
the period the Authority has refused to register
one applicant. The DBROA15 also states that the
Authority may revoke a registration under certain
circumstances; during the period the Authority has
revoked one registration.
Oversight and outreach
During the last twelve months the AML Unit has
conducted outreach and education sessions with
all the major designated business sectors affected
by the legislation.
A programme of AML/CFT compliance oversight
visits commenced in January 2016. These visits are
undertaken by a dedicated team within the AML
Unit. The AML Unit has now carried out a number
of visits to businesses across the designated
business sector. A key finding of the visits carried
out by the Authority and also from those carried
out by the bodies to whom the Authority has
delegated its oversight powers, is the need for
designated businesses to document their thought
process regarding decisions made and actions
taken.
22 • Isle of Man Financial Services Authority Annual Report 2016/17