Next phase of sanctions thematic project to start

The Isle of Man Financial Services Authority (“the Authority”) is launching the next stage of its thematic review to assess AML/CFT compliance in relation to sanctions.

Following the successful completion of Phase 2 of the project, which started in January 2024 with a focus on banks and money transmission service licence holders, Phase 3 will be risk-driven and cover firms in other sectors.

The work forms part of the Authority’s supervisory engagement plan for 2025/26 and will be led by the AML/CFT Supervision Division in conjunction with other supervisory divisions where appropriate. 

In Phase 3, requests for relevant documentation to be provided to the Authority will be sent to Island firms at the same time as they are notified of their inclusion of the project. The nature and scale of the project means that notifications, and the involvement of individual licence holders and designated businesses, will be staged over a period of time.

Further assistance and guidance in relation to the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 (“the Code”) is available on the Authority’s AML/CFT webpage.

Useful documents include, but are not limited to – the Anti-Money Laundering & Countering the Financing of Terrorism Handbook, the Customs & Excise Sanctions Guidance, and the latest Isle of Man Financial Crime Strategy 2024 -2026.

Ashley Whyte, Head of AML/CFT Supervision, said: ‘The Island is committed to fulfilling its international obligations with regard to:

• sanctions regimes, and denying terrorist groups access to the financial system;
• countering the proliferation of weapons of mass destruction; and
• effective controls on the export and trade in military equipment, dual-use items, and other goods of concern.

‘The Authority is progressing the thematic project to assess the AML/CFT frameworks established by Island firms to consider sanctions risks and vulnerabilities. A Phase 2 report will be published in due course presenting learnings, best practice and key observations. The importance of awareness relating to both financial and non-financial sanctions is long established in AML/CFT legislation, albeit additional focus has arisen in recent years as a result of global conflict, including the invasion of Ukraine and elsewhere.’

She added: ‘Phase 3 of this project presents the opportunity to further test and evidence how relevant persons are meeting their AML/CFT responsibilities in this area utilising the data provided by firms via STRIX as part of the annual return. It is the Authority’s intention to publish further reports following the completion of Phase 3. These projects are an important part of the Authority’s toolkit to build a picture of the Isle of Man risk environment in combination with our other engagement with the financial services sector. Continued collaboration will ensure we are able to evidence, as an international financial centre, that the Isle of Man maintains strong frameworks to limit and disrupt financial crime.’