Isle of Man has less than a year to improve money laundering standards

The Council of Europe’s MONEYVAL watchdog has given the Manx government until July 2019 to improve its money laundering legislation as it notices progress has been made towards the watchdog’s requirements.

Moneyval, which assess compliance with European rules on anti-money laundering and the financing of terrorism, has upgraded the Isle of Man on eight of 40 recommendations it made in a 2016 report.

Moneyval upgraded the Isle of Man to ‘compliant’ from the recommendations it had made in the 2016 report in 8 different fields, including criminalisation of the financing of terrorism, targeted financial sanctions on the financing of terrorism, wire transfers, financial intelligence unit,
cash couriers, and statistics.

It also re-rated the IoM as “largely compliant” on its recommendations on transparency of legal persons and on sanctions.

“The amendments set out in the draft Anti-Money Laundering and Countering the Financing of Terrorism Code 2018 are considered by the [Manx Department of Home Affairs] to be strategically important to the Island’s proposition as a responsible international finance centre”, said Kelly Mercer, of the Isle of Man Financial Services Authority (IOMFSA).

“A short consultation period is required to enable the proposals, subject to any material issues raised through the consultation process, to be brought into effect as soon as is practicable.”

The tight deadline explains why the Isle of Man Financial Services Commission’s consultation on its proposed reforms was only for one week.

“The amendments set out in the draft Anti-Money Laundering and Countering the Financing of Terrorism Code 2018 are considered by the [Manx Department of Home Affairs] to be strategically important to the Island’s proposition as a responsible international finance centre”, said Kelly Mercer, of the Isle of Man Financial Services Authority (IOMFSA).

“A short consultation period is required to enable the proposals, subject to any material issues raised through the consultation process, to be brought into effect as soon as is practicable.”

The proposal’s main additions to the IOMFSA code are: requirements to conduct sanctions screening;
a need to consider whether the regulated person has met the customer in the course of business when conducting client risk assessments; requirements on a regulated person to undertake certain considerations in cases of introduced business; and amendments related to reliance of a regulated person on third parties.

ABOUT THE AUTHOR
Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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