The Isle of Man has still not fully satisfied one of MONEYVAL’s 40 recommendations and needs to do more to prevent money laundering and terrorist financing.
The island was last inspected by the Council of Europe’s financial experts in December 2016 where it was placed into an “enhanced follow-up” procedure.
In its fourth follow-up report on the island, MONEYVAL has “considered the Isle of Man to comply or mostly comply with 39 out of 40 Financial Action Task Force (FATF) recommendations”, as it did in a 2020 follow-up report.
Whilst progress has been made, MONEYVAL found there are still “moderate deficiencies” in technical requirements such as an independent audit function for anti-money laundering, counter-terrorist financing, or gambling codes.
Also, “there was no specific requirement in the AML/CFT Code for groups to have group-wide programmes against money laundering or terrorist financing”.
The jurisdiction must report back in three years’ time to see if these concerns have been addressed.
That means the island will have been working to rectify issues identified within the initial inspection for nine years.
Pictured: The States of Guernsey has handed legal powers to a new bureau designed to independently manage financial crimes.
MONEYVAL is due to inspect Guernsey next year, having last visited in 2014 which showed good progress in applying international financial standards. However, the criteria has been strengthened significantly since then.
If a jurisdiction fails an inspection they can expect to move onto the Financial Action Task Force’s (FATF) grey list. A negative report can lead to banks in the region losing access to some levels of global financial architecture and the jurisdiction as a whole can seem less enticing to investors.
Deputy Peter Ferbrache, President of the Policy & Resources Committee, recently assured the States Assembly that everything possible was being done to prepare Guernsey for a positive inspection outcome.
Guernsey’s Economic and Financial Crime Bureau, established in 2021, now has legal powers to enforce laws and investigate cases autonomously. It’s hoped this statutory body will demonstrate the island is serious about investigating and tackling financial crimes.
The Bureau’s establishment required the hiring of 50 new specialist civil servants, including lawyers and financial experts.
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