Authority publishes findings of sanctions questionnaire

The Isle of Man Financial Services Authority has published the findings of a questionnaire focusing on compliance with the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Code 2019 in relation to sanctions.

The questionnaire was issued to all supervised entities in the Island and focuses on the procedures and controls in place regarding sanctions, including the screening of customers. The phase one report, which is available to view on the Publications section of the Authority’s website, sets out the responses provided via the STRIX system by a total of 596 registered and regulated firms – a response rate of 98.5%.

The publication highlights examples of good practice and areas for improvement, along with the Authority’s observations on the data. The results will feed into the Island’s updated National Risk Assessment, as well as informing the Authority’s overall picture of risk to support its work to protect consumers, reduce financial crime and maintain confidence in the finance industry through effective regulation.

Phase two of the thematic project is already under way and involves onsite inspections at selected firms. A report on the findings of phase two will be issued in 2025 to share learning points with industry.

All relevant persons in the Island are required to have a comprehensive understanding of their responsibilities in respect of sanctions, which are used by countries to impose restrictions on certain international trade and services.

In line with the Island’s constitutional position, sanctions imposed by the UK Government are automatically implemented and enforced in the Isle of Man by the Customs & Immigration Division of the Treasury, with updates published online.

The Authority’s thematic questionnaire explores the procedures and controls, staff training and ongoing monitoring put in place to mitigate any sanctions-related risks. Firms are encouraged to read the report and consider any action necessary to ensure their own compliance regimes are effective, up-to-date and properly documented.

Tristan Caley, Senior Manager, AML/CFT Supervision, said: ‘It’s important for all relevant persons and businesses to be aware of AML/CFT requirements in respect of sanctions. This matter has been brought into sharp focus in recent times in connection with the global sanctions against Russia following its invasion of Ukraine. Our thematic review provides an opportunity to capture key data and test how firms are complying with the AML/CFT Code when it comes to identifying and mitigating sanctions risk.’