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ISLE OF MAN GOVERNMENT

Anti Money Laundering and

Combating the Financing of Terrorism

National Strategy2016 - 2018

Cabinet Office

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Cabinet Office, Isle of Man Government

AML/CFT STRATEGY 2016 — 2018

AML/CFT Strategy — Outline of contents

Foreword

Introduction

Key findings from the national risk assessment

Financial and non-financial services sectors

Overarching strategic themes

Implementation of the national strategy and assessment of outcomes

Appendix I Isle of Man Government AML/CFT Framework

Appendix II FATF recommendations and immediate outcomes

Glossary of terms and acronyms

Goal 1 Ensure the provision of timely and effective international co-operation

Goal 7 Examine the implementation and enforcement of sanctions

Goal 2 Refine national anti-money laundering and combating the financing of terrorism policy making and legislative process

Goal 3 Improve the collection and the analysis of data for national risk assessment and for other anti-money laundering and combating the financing of terrorism purposes

Goal 4 Ensure that the Financial Intelligence Unit is fully enabled to fulfil domestic and international obligations

Goal 5 Implement revised structures for investigations into money launderingand the financing of terrorism and assess effectiveness

Goal 6 Promote measures to increase asset forfeiture and recovery, including civil recovery

Goal 8 Implement oversight and supervision of designated non-financial businesses and professions and assess progress

Goal 9 Implement enhanced measures at the border to strengthen controls on cash and similar instruments and assess effectiveness

Goal 10 Promote training and awareness of anti-money laundering and combating the financing of terrorism within Government

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Fore

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The Isle of Man has a longstandingcommitment to meeting internationalstandards to combat money laundering

and the financing of terrorism andproliferation. This commitment isdemonstrated daily through the work ofofficers in Government and regulators andthrough the excellent working relationshipwith industry which was demonstratedduring the development of the 2014/15national risk assessment of moneylaundering and terrorist financing.

The national risk assessment was the firsttime that a multi-agency group comprisinglaw enforcement, regulators and Governmenthad come together specifically to considerthe national risks relating to moneylaundering and financing of terrorism and toassess the effectiveness of the Isle of Man atcombatting them.

The national risk assessment benefitted fromsignificant input by members of the privatesector who were able to advise upon theirindustries and the ways in which differentproducts and services might be abused.

The goals identified in this Strategy arise outof the work that was undertaken for thatnational risk assessment. Progress hasalready been made on a number of the goalsidentified in this Strategy, but significantwork is still required.

The corrupt, the criminal and the terroristare continuously looking for opportunities tocreate ways to exploit the internationalfinancial sector and the Isle of Man willactively respond to these evolvingchallenges.


Foreword by the Chief Minister

The corrupt, the criminal and the terrorist arecontinuously looking for opportunities to create ways toexploit the international financial sector and the Isle ofMan will actively respond to these evolving challenges.“

“Hon. Allan Bell MHKChief Minister

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Intr

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The Isle of Man Government publisheda formal commitment in 20121 toadopting the revised Financial Action

Task Force (FATF) 40 Recommendationsconcerning International Standards onCombating Money Laundering and theFinancing of Terrorism2 and Proliferation3.

In 2008 the Island was assessed by theInternational Monetary Fund (IMF) againstthe earlier FATF Recommendations and wasfound to be largely compliant with them.Over the past seven years the Governmentand regulators have continued to review andaddress risks identified by the IMF reviewand, more recently, the 2013 MONEYVALreview. This review assessed the progress ofthe Isle of Man against the FATF CoreRecommendations4.

MONEYVAL is the Council of Europe’sCommittee of Experts on the Evaluation ofAnti-Money Laundering Measures and theFinancing of Terrorism. It is a FATF-styleregional body which allows members toundertake mutual evaluations of each other’santi-money laundering and combating thefinancing of terrorism regimes against theFATF standards. The results are published inthe form of Mutual Evaluation reports(MERs). The Isle of Man joined MONEYVALmutual evaluation process in 2012 and willundergo a full evaluation in 2016 against all40 revised Recommendations. The evaluationwill also, for the first time, consider evidencefor the effectiveness of the Isle of Man’s

measures to combat money laundering andterrorist financing as well as the technicalframework that is in place.

The revised FATF recommendations include anew ‘Recommendation 1’. ThisRecommendation requires that countriesundertake an assessment of the moneylaundering and terrorist financing risks forthe country and take action and applyresources to mitigate those risks. The Isle ofMan undertook its first national riskassessment of money laundering andterrorist financing in 2014/2015. Theassessment followed a methodology whichwas established by the World Bank. It wasundertaken by the Island in conjunction withadvisors from the World Bank. This nationalstrategy arises predominantly out of thatwork.

The national risk assessment identifiedactions that were required to deliver a moreeffective approach to anti-money launderingand combating the financing of terrorism.These actions have been grouped togetherunder each of the goals in this Strategy5.Where additional actions have beenidentified following the NRA these have alsobeen included.



1 https://www.gov.im/media/1082460/amlcommitment.pdf

2 For the purposes of this document, wherever the financing of terrorism is referenced, it should be noted that by inference

the term “terrorism” automatically includes the proliferation of weapons

3 The FATF is an independent inter-governmental body established by Ministers of its member jurisdictions. It develops and

promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of

proliferation of weapons of mass destruction.

4 See under ‘Glossary of Terms and Acronyms’.

5 There are national risk assessment action plans at national and sector level which are overseen by the Cabinet Office or

the relevant regulatory authority (including supervisory authorities). This Strategy groups the actions from the national plan

(and some sector actions) into thematic goals to ensure that identified issues are not addressed in isolation.

Introduction

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The National Strategy identifies areas wherethe Isle of Man Government will revise orenhance existing activities, review wherenew policies or guidance may beappropriate, and work with regulators andlaw enforcement to improve transparency.The Strategy highlights the need to improveand exploit available data to better informGovernment about the potential level ofmoney laundering and terrorist financingthreats facing the Isle of Man to allowresources to be targeted more effectively.

The national risk assessment furtherexamined the risks such threats pose to eachlocal industry sector both internationally, andwhere relevant domestically. The nationalrisk assessment also considered howeffective the Isle of Man’s legal framework,policy makers, law enforcement agencies andregulatory supervisors are in preventing anddetecting money laundering and terroristfinancing. This included reviewing theIsland’s effectiveness and achievements inseeking out those who use the Island’sfinancial systems for criminal purposes,prosecuting them and depriving them of theproceeds of their crimes.

Key findings from the nationalrisk assessment include

• As a centre for global financial services co-operation with other jurisdictions toaddress money laundering and terroristfinancing and to confiscate and return theproceeds of crime must continue to be aprimary objective. This includes a proactive

approach to identifying, analysing and whererequired investigating the involvement ofbusinesses and individuals trading from theIsle of Man in such cases and thespontaneous disclosure of intelligence toother jurisdictions6. Appropriate resourcesshould be allocated to these tasks andresults monitored for effectiveness.Domestic collaboration including thesharing of data is key and will also facilitatethe development of typologies for the Islandand contributing towards typologiesdeveloped by international bodies such asthe FATF, so that industry is better informedof the threats. Policy making processesneed to be refined and industryconsulted appropriately.

• The role of the Financial IntelligenceUnit (FIU) as the national centre for thereceipt and analysis of Suspicious ActivityReports (SARs)7 and other informationrelevant to money laundering and terroristfinancing is fundamental. An effective FIUenables the investigation, prosecution andconviction of those who commit financialcrime and ultimately enables the recovery ofcriminal assets. The relationship between theFIU and industry particularly in relation tothe provision of good quality SARs foranalysis, is vital, together with the detailedanalysis of that data by the FIU. Togetherwith industry the law enforcement authoritiesand Government can effectively tacklefinancial criminality. The FIU must beequipped with the appropriate resources,people, skills and technology to undertakecomplex work.



6 Disclosure of intelligence which does not take place in response to a request

7 SARs and STRs (Suspicious Transaction Reports) are the means by which the industry alerts the FIU to unusual or suspicious activity

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• Investigation of complex multi-jurisdictional financial crime should beprioritised in a manner which reflects itsimportance to the reputation and economyof the Isle of Man. Investigators should haveappropriate expertise and be properlyresourced. Specialist anti-moneylaundering and combating thefinancing of terrorism training andongoing professional development forfinancial investigators, regulators,prosecutors and the judiciary will ensure thatthere is a robust pool of expertiseappropriate to the Island’s internationaleconomy and the attendant risks.

• Nationally there is a mature legalframework; the Isle of Man is a signatoryto relevant international conventions on anti-money laundering and combating thefinancing of terrorism. The NRA identifiedthat the current framework appeared to beappropriate to the requirements of the Isle ofMan. The Government is committed to acontinuous programme of monitoring and,where needed, to bringing forwardamendments to ensure that this continues tobe the case.

• Although some supervisors have a widerange of powers to direct and, whererequired, to sanction industry, this is not thecase for all supervisors. In order to helpensure that regulatory sanctions improvecompliance and deter non-compliance, a fullsuite of powers should be available, usedand seen to be used by regulators andinformation and data on actions taken madeavailable publically. Providing more detailedguidance for industry on regulatory sanctionsshould aid understanding, co-operation andcompliance.

• Whilst there is no current indication thatterrorist financing takes placedomestically, the use of the Isle of Man’ssophisticated financial services sectors by aterrorist group or a terrorist financierelsewhere than in the Isle of Man remains athreat. There is evidence internationally ofthe ways in which the financing of terrorismis evolving. The competent authorities in theIsle of Man, notably the FIU with its contactsthrough The Egmont Group8, ensure thatinformation and advice is disseminated torelevant groups and individuals so thesepersons can take them into account whenreviewing and revising legislation andguidance and undertaking supervisory visits.

• Tax evasion as a predicate offence stillfeatures significantly in international requestsfor mutual legal assistance. The Isle of Manis at the forefront of both exchange ofinformation on request and automaticexchange of information for direct taxpurposes. Increased due diligence andexchange of information is likely to reducethe attractiveness of Isle of Man businessesfor those involved in tax evasion. Closure oflegal tax avoidance and planningopportunities for middle earners has led toan increased focus on wealthy clients and amore international client base of a higherstandard which is more likely to reduce therisks of receiving the proceeds of foreigncorruption or organised crime.



8 The Egmont Group is an international group comprising of over 150 FIUs which works to promote international co-operation in

anti-money laundering and countering the financing of terrorism.

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• Where trust and corporate serviceproviders (TCSPs) supply services, includingthe establishment of corporate vehicles, foruse in international trade there is a risk thatthose vehicles could be used to carry outtrade-based money laundering. Customsand Excise has undertaken an awareness-raising programme and provided guidance on“trade control” licensing requirements whereTCSPs are involved in movement orbrokering activities around goods and themovement of goods.

• Provisions available in the Isle of Man forobtaining beneficial ownershipinformation were assessed as satisfactory bythe NRA. The regulatory system operated bythe Isle of Man since 2000 makes beneficialownership information available (subject tostatutory gateways), on request to, inter alia,law enforcement authorities on all occasions.Nevertheless recent developments have beentaken into account. The technologicaladvances used for illicit monies to bedispersed continue to accelerate and recentterrorist attacks have highlighted the criticalimportance of providing timely information tolaw enforcement authorities. The FATF hasnow strengthened requirements to preventterrorist financing and the EuropeanCommission has an Action Plan to strengthenthe fight against terrorist financing.Furthermore the EU 4th Anti-MoneyLaundering Directive sets out a number ofrequirements in respect of beneficialownership, including a central register. Witha broader international consensus emergingthe Isle of Man has been examining ways inwhich more timely and relevant informationon beneficial ownership might be providedwhilst keeping existing safeguards in place.

Consequently there is an action in theStrategy to establish a central register forbeneficial ownership which will be availableto law enforcement and other competentauthorities. This information will be availablethrough existing channels.

Financial and DesignatedNon-Financial Businesses andProfessions in the Isle of Man

Schedule 4 of the Proceeds of Crime Act2008 (POCA) lists the business sectorsidentified as “business in the regulatedsector” in the Isle of Man, and thereforesubject to anti-money laundering andcombating the financing of terrorismlegislation. Schedule 4 includes a range ofbusinesses which covers both financial andnon-financial sectors.

The activities of businesses in the financialsector are licensable under the FinancialServices Act 2008, and the Insurance Act2008 and/or the Retirement Benefit SchemesAct 2000; they are therefore subject tosupervision for both anti-money launderingand combating the financing of terrorism andfor prudential purposes by the Isle of ManFinancial Services Authority (IOMFSA).

This sector includes banks, investmentbusiness and funds and insurance andpensions. It also includes trust andcorporate service providers9, money servicebusiness providers and professional officers.Further information on these businesses iscovered later.



9 Although the FATF categorises trust and corporate services as a non-financial sector the Isle of Man treats this as a financial business.

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For the non-financial sector, there hadpreviously been some anti-money launderingand combating the financing of terrorismoversight in relation to certain non-financialbusinesses included in Schedule 4 of POCA.This was mainly undertaken by the relevantprofessional body. This oversight did nothowever extend to all types of non-financialbusiness; therefore in October 2015 theDesignated Business (Registration andOversight) Act 2015 was brought into force.

This legislation now provides the IOMFSAwith powers to conduct compliance oversightvisits for anti-money laundering andcombating the financing of terrorismpurposes in respect of the designated non-financial businesses and professions sector10.This includes accountants, advocates, moneylenders etc. The legislation also permitsthese powers to be delegated. A full list ofthe businesses and professions subject tothis oversight is included in Schedule 1 to theDesignated Business (Registration andOversight) Act 2015.

Gambling businesses, such as onlinegambling and casinos, are subject tolicensing and supervision by the GamblingSupervision Commission.

• Banks continue to provide a maingateway into the financial system in the Isleof Man. The majority of the Island’s banksare part of wider international groupsestablished in jurisdictions which areconsidered to have equivalent anti-money

laundering regimes. The Island’s banksprovide a wide range of products andservices and, as well as dealing withdomestic customers, also deal withinternational personal customers, corporateand business clients and persons holdingfunds on behalf of others (e.g. wealthmanagement). There are increasedchallenges when dealing with non-residentHigh Net Worth clients, managed corporate /trust clients and the use of the bankingsector by large non-Isle of Man corporates.

• Insurance and pensions is a majorsector in the Isle of Man and overall iscontinuing to grow. It is a well-establishedand mature part of the Island’s industry withsignificant assets under management. Thesector is highly international in nature with alarge proportion of the business conductedon a non-face-to face basis and with thebusiness relationship in many casesestablished through introducers ininternational jurisdictions. The use of legalpersons and arrangements such as trusts iscommonplace.

• Investment business and funds(securities) forms a small part of the Isle ofMan financial services sector overall. Withthe exception of Isle of Man IndependentFinancial Advisors, the customer base issubstantially non-resident clients with foreignbusiness or personal interests and therefore,for the majority of institutions in the sector,presents a higher risk of money laundering.



10 Note that the registration and oversight regime introduced by the the Designated Business (Registration and Oversight) Act 2015 also

extends to the businesses of lending, financial leasing and providing financial guarantees and commitments which although defined as “fi-

nancial institutions” by the FATF are not subject to licensing and oversight by the Financial Services Act 2008.

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Non-retail funds and investment businessrepresent the most significant elements ofthe securities sector; overseas fundsrepresent the element of the sector that hasseen a significant positive growth in therelevant period. The majority of the investorbase is UK resident.

• Online gambling has a significantpresence in the Isle of Man with licencedoperators offering online and mobile devicegambling to a worldwide player base. Themajority of the companies are privatelyowned and some of the ownership structuresare complex. Credible typology reports foronline gambling are still relatively rare,however there are intrinsic risks as theindustry is non-face-to-face, cross-borderand incorporates a type of agency in theform of affiliates who recruit players. Thereare a number of factors which mitigate therisk of players laundering money; howevercriminal ownership of a licence remains themost significant threat.

• Trust and Corporate ServiceProviders are a significant sector in theIsland. Most business is international innature with around 40% estimated to comefrom outside the UK and EU. TCSPs areimportant as gatekeepers to the financialsystem; trustees and directors have controlof assets, investments and bank accounts.There are a number of well-recognisedinherent vulnerabilities associated withTCSPs and existing and significant typologiesfor the sector. It is the case however thatunlike many jurisdictions, TCSPs in the Isleof Man are fully regulated for AML/CFTpurposes and have been for many years.



11 A regulated legal service is one which is subject to the Anti-Money Laundering and Countering the Financing of Terrorism Code 2015

• Money Service Businesses cover avariety of services in the Isle of Man, someof which were subject to anti-moneylaundering registration and oversight at thetime of the national risk assessment. Moneylending is also now included under theDesignated Businesses (Registration andOversight) Act 2015. Money ServiceBusinesses represent a small sectorcompared to other groups in the Island witha low average transaction size and acustomer base that is predominantly localresident (face to face).

• Advocates in the Isle of Man offerservices which include regulated legalservices11 to an international client base. Atthe time of the national risk assessment,around half of all advocates were deliveringsuch services. The extent and the value ofinternational work provided to high net worthcustomers are identified as the predominantinherent vulnerabilities for money launderingor terrorist financing, although the primaryrisk remains deliberate collaboration or intentto commit a legislative breach or criminaloffence. A number of practices haveestablished separately licenced entitiesproviding TCSP services; these businessesare supervised by the IOMFSA.

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• Accountants are not always involved withclient funds and transactions however globaltypologies indicate there are a number ofrisks for the sector including matters relatingto taxation (specifically evasion) andcollusion/complicity in misrepresentingfinancial affairs (accounting fraud). Data onthe sector was generally limited at the timeof the national risk assessment although theDesignated Businesses (Registration andOversight) Act 2015 now ensures that allregistered firms of accountants and thoserepresenting themselves as accountants areobliged to submit confirmation of theircompliance with anti-money laundering andcombating the financing of terrorismrequirements.

Other sectors

The national risk assessment also identifiedother sectors which may require furtherconsideration in future, but for which therewas insufficient data at the time, owing tothe size of the sector or the absence of anyrequirement to report on anti-moneylaundering and combating the financing ofterrorism matters.

These Designated Non-Financial Businessesand Professions (DNFBPs)12 sectors includedthe following:

o payroll agents

o estate agents

o registered legal practitioners

o convertible virtual currency sector

o high value goods dealers

o specified non-profit organisations

This strategy identifies that further work isrequired in respect of these sectors and thiswill be assisted by the requirement forregistration under the Designated Businesses(Registration and Oversight) Act 2015.

12 DNFBPs

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Overarching Strategic Themes

There are three overarching strategic themes which underpin each of the 10 goals thatmake up the strategy. These themes are;

1Monitoring and maintaining compliance withinternational obligations and standards andsupporting measures aimed at tackling money

laundering, terrorist financing and combatingproliferation13

2Ensuring that the Isle of Man Government’snational risk assessment and risk appetite foranti-money laundering and combating the

financing of terrorism is adopted nationally bygovernment, regulators and industry

3Raising awareness and increasingknowledge concerning the threat of terroristfinancing

The 22 actions which were identified during the NRA process are included within the10 goals which make up this Strategy.

Within each goal a lead agency has been identified with responsibility for reportingupon and delivering the required actions, or working with others where the actions areshared between agencies (which are also identified). There is however a broadresponsibility for everyone working in the public sector and beyond, whether explicit ornot, to remain vigilant concerning suspected money laundering or financing ofterrorism.

13 Proliferation of weapons of mass destruction (“WMDs”) can be in many forms, but ultimately involves the transfer or export of

technology, goods, software, services or expertise that can be used in programmes involving nuclear, biological or chemical

weapons, and their delivery systems (such as long range missiles).

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Goal 1



Threats and Vulnerabilities

Predicate offences14 can and do occur in theIsland. However with much of the Island’sfinance and related business beinginternational in nature, assisting otherjurisdictions in their investigations andprosecutions of money laundering andterrorist financing in cases where there is aconnection with the Isle of Man is ofparamount importance. The UK is thelargest market for the Island’s financial andnon-financial services. In 2015 the UKNational Crime Agency’s Report ‘NationalStrategic Assessment of Serious andOrganised Crime’ stated that:

“Many hundreds of billions of pounds ofinternational criminal money is almostcertainly laundered through UK banks,including their subsidiaries, each year”

The need for ongoing vigilance and aproactive approach to information sharing onthe part of the Isle of Man is clear. In respectof tax, the introduction of automaticexchange of tax information is expected toreduce the threat presented by tax evasionin the longer term; it is however likely tocreate an increased demand upon resourcesfor dealing with requests for internationalcooperation in the short to medium term.

Strategy

Ensure the Isle of Man has an effective legalframework for cooperation. Actively monitorand adhere to best practice and ensure thatadequate resources are allocated tointernational cooperation. Continue to shareknowledge and experience with other smallor developing finance centres.

GOAL 1Ensure the provision of timely and effectiveinternational co-operation

14 Predicate offences are crimes underlying money laundering or terrorist finance activity. Money laundering offences assume that a

criminal offence (the predicate offence) has occurred in order to generate the criminal property which is then laundered.

15 http://www.nationalcrimeagency.gov.uk/publications/560-national-strategic-assessment-of-serious-and-organised-crime-2015/file

Lead agency: Attorney General’s Chambers

Other agencies: Cabinet Office, Financial Intelligence Unit, Treasury (Customs and ExciseDivision and Income Tax Division), Regulators.

Goal 1 links to FATF Recommendation/s (R) and Immediate Outcomes (IOs)

R 36, 37, 38, 39 and 40 and elements of R 9, 24, 25 and 32

IO 2, 9 and elements of IO 3,5,6,8 and 10

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Goal 1



Actions

• Ensure that Government has sufficient resources available to deliver internationalcooperation in a timely and effective manner in keeping with international standards.

• Continue to work with international partners to obtain and provide information onrequest, automatically and spontaneously to support anti-money laundering andcombating the financing of terrorism activities.

• Contribute towards typologies16 developed by international bodies such as the FATF andMONEYVAL

• Build upon links with bodies and persons outside of the Isle of Man to develop networksfor information sharing and advice which enhance national anti-money laundering andcombating the financing of terrorism strategies.

• Ensure that accurate and accessible statistical data is maintained on all forms ofinternational cooperation and that quantitative and qualitative analysis of the data isundertaken on a regular basis.

• Seek feedback on the effectiveness of information and cooperation provided to otherjurisdictions by the Isle of Man.

• Continue to provide practical advice, help and support based upon the knowledge andexperience of Isle of Man professionals to aid capacity building and the fight againstcorruption (e.g. through funding the Small Countries Financial Management Programme).

• Ensure that ongoing developments in international cooperation to address moneylaundering and terrorist financing are monitored and that the implications for the Isle ofMan are understood and, where required, acted upon.

• Introduce new legislation and operational processes to ensure that internationalsanctions are applied in a timely manner.

• Continue to develop bilateral and multi-lateral relationships which enhance internationalcooperation including signing up to and implementing the requirements of relevantconventions and agreements.

16 Typology reports provide systematic studies of ML/TF cases that have characteristics or traits in common.

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Goal 2




The Isle of Man is a small jurisdiction withwell-developed and close associationsbetween the competent authorities and ahigh level of political understanding andengagement on anti-money laundering andcombating the financing of terrorismmatters. Nevertheless the national riskassessment identified areas forimprovement, including a need for moreclarity concerning national policydevelopment, a review of communicationand consultation with industry and a reviewof the structure and purpose ofGovernment’s own anti-money launderingand combating the financing of terrorismgroups in light of evolving threats andchanging demands.

Strategy

Ensure that national policy is led by theCabinet Office and that the groupsestablished to consider anti-moneylaundering and combating the financing ofterrorism matters complement each otherand support the Anti-Money Laundering andCombating the Financing of Terrorism andProliferation Strategic Group in its role.

GOAL 2Refine national anti-money laundering andcombating the financing of terrorism policy makingand legislative processes

Lead agency: Cabinet Office

Other agencies: Attorney General’s Chambers, Financial Intelligence Unit, Treasury (Customs& Excise Division and Income Tax Division), Financial Services Authority, GamblingSupervision Commission, Department of Economic Development, Department of HomeAffairs, Isle of Man Constabulary.

Goal 2 links to FATF Recommendation/s and Immediate Outcomes

R 1 and 2

IO 1 and elements of IO 3, 5 and 9

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17 “Agency” includes Isle of Man Financial Services Authority; Gambling Supervision Commission; IOM Constabulary; FIU and others

Actions

• Review and improve as needed the process for anti-money laundering and combatingthe financing of terrorism policy development ensuring a holistic approach andproportionate legislative development.

• Review and improve as needed the process and resources available for making anti-money laundering and combating the financing of terrorism legislation.

• Examine and make revisions to the structure and membership of Government anti-money laundering and combating the financing of terrorism groups to ensure that theycontinue to meet changing circumstances and demands.

• Ensure that appropriate mechanisms exist to enable effective consultation with industry.

• Examine whether policy, legislative changes and progress are communicated effectivelyto industry and to the wider public.

• Introduce an annual Government publication to report progress on anti-moneylaundering and combating the financing of terrorism matters.

• Ensure that the anti-money laundering and combating the financing of terrorismstrategic goals and actions arising out of the national risk assessment are reflected innational, agency17 and departmental plans and reported upon.

• Consider sentencing guidelines for money laundering offences.

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Goal 3



GOAL 3Improve the collection and the analysis of data forNRA and for other anti-money laundering andcombating the financing of terrorism purposes


The level of money laundering and terroristfinancing threat for the Isle of Man isinformed by a variety of key data whichincludes economic data (e.g. financial flowsinto and out of the Island, source of businessetc.) and data linked to law enforcementtype activities (see Goal 4).

The national risk assessment identified that,in the case of the economic information,there were gaps in the available data. In thecase of law enforcement type data, this washeld by different agencies and in differentways.

The national risk assessment recognised thatthere was a need to build upon what hadbeen available in order to obtain a morecomplete threat analysis and respondaccordingly.

Strategy

Identify and establish a methodology forcollecting, collating and analysing data linkedto law enforcement type activities which isheld by Isle of Man competent authorities.Ensure that responsibilities for themaintenance of this data are agreed andthat, where applicable, data is held centrallyand securely in a consistent format. Identifywhich relevant economic data can beobtained and via what route/s and establisha process for collecting, collating andanalysing this data. Improve the timelinessof access to beneficial ownership informationthrough the development of a centralregister.


Other agencies: Attorney General’s Chambers, Financial Intelligence Unit, Treasury (Customs& Excise Division and Income Tax Division), Regulators, Economic Development, Isle of ManConstabulary, Office of Fair Trading.


R 1, 24, 25, 29 and 33

IO 1, 5, 6, 7, 8, 9, 10

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Goal 3



Actions

• Determine short, medium and longer term goals in respect of data collection, sharingand analysis.

• Identify and establish a methodology for collecting, collating and analysing data linkedto law enforcement type activities.

• Ensure data capture is co-ordinated and that data is collated and maintained by therelevant authorities and that summarised data is held in a consistent format centrallyand securely.

• Identify relevant economic data which can be obtained and via what route/s. Establisha process for collecting, collating and analysing this data.

• Review information sharing gateways so that data can be shared within the scopepermitted.

• Establish a central register of beneficial ownership.

GOAL 4Ensure that the Financial Intelligence Unit is fullyenabled to fulfil its domestic and internationalobligations


As the national centre for the receipt andanalysis of Suspicious Activity Reports(SARs), Suspicious Transaction Reports(STRs) and other information relevant toanti-money laundering and combating thefinancing of terrorism, the role of the FIU isfundamental. In the Isle of Man the FIU,international cooperation and financial crimeinvestigation together formed the FinancialCrime Unit (FCU), until the functions wereseparated in August 2015.

The FCU was therefore responsible for bothfinancial intelligence gathering and theinvestigation of serious and complex fraud.The FCU was twice subject to inspection bythe International Monetary Fund and broadlyfound to be effective and largely compliantwith international standards. However inrecent times staffing and resilience issueshave contributed to abstractions which onoccasion impacted resilience towardsinvestigations.

Analyses of data and material has beenrestricted with a paper based system and onoccasions lacked analytical oversight,particularly at a strategic level.

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Goal 4



Strategy

Establish the FIU in law as a separate andindependent unit18 with responsibility forfinancial intelligence gathering, the profilingand analysing of data and subsequentdissemination. Improve information sharingwith partners through legal gateways andMOUs; assist regulatory bodies and lawenforcement agencies deliver results througha formal tasking process.

The FIU will be supported by an independentring-fenced staffing structure with oversightfrom a Board providing governance and anappropriate level of autonomy. The FIU tofocus on its primary function, gatheringintelligence and identifying risk relating toAML and CFT and other predicate offencesand the dissemination of the results ofanalysis.

Secure via the transfer and/or recruitment ofofficers, resources appropriate to current andknown demands and the technology requiredto handle and analyse data received by theFIU. Ensure that the FIU has the powers itrequires in law and the resources to fulfil itsobligations.

Establish and deliver a training anddevelopment programme to enable all staffto provide a high quality intelligence product.

18 The Financial Intelligence Unit Bill is due to receive Royal Assent in early 2016

Lead agency: FIU Board

Other agencies: Attorney General’s Chambers, Isle of Man Constabulary, Treasury (Customs& Excise Division), Department of Home Affairs, Cabinet Office.


R 29 and 40 and elements of R 2, 4, 33 and 34

IO 2 and 6

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Actions

• Redefine the role of FIU as an independent Unit established in law.

• Develop and publish an FIU Strategy aimed at ensuring that the Unit provides the centralfocus and lead for all anti-money laundering and combating the financing of terrorismintelligence.

• Secure via legislation effective powers in respect of SARs/STRs.

• Develop and implement a training and development programme for skills, knowledgeand accreditation.

• Introduce online SAR/STR reporting; provide education, guidance and training forindustry on reporting and improve feedback to industry.

• Evaluate the level of disseminations, investigations and prosecutions generated bySARs/STRs.

• Improve level of analysis given to SARs/STRs.

• Develop a methodology for collecting and analysing intelligence provided via Mutual LegalAssistance Requests received by the Isle of Man to inform potential intelligence packages.

• Establish a new body to share information/intelligence between competent authoritiesand to develop typologies relevant to the Isle of Man.

• Undertake regular strategic analysis of threats based upon intelligence received (i.e.identify changing and emerging trends).

• Review and where needed enhance information sharing gateways.

• Report upon and publish progress including relevant work, findings, data and typologieson an annual basis.

20

Goal 5



GOAL 5Implement revised structures for investigationsinto money laundering and the financing ofterrorism and assess effectiveness


The Financial Crime Unit (FCU), which untilrecently incorporated an FIU, internationalcooperation, and financial crimeinvestigations, has experienced recentretirements and some limited abstractions tosupport the demands of the wider Isle ofMan Constabulary (IOMC).

There is a need to provide a more structuredpathway and training regime to align to theemerging threats of ML and FT and buildupon the operational and academicexperience already within the existing team,and develop future investigators to meet theneeds of longer term succession planning.

Strategy

Complete the restructuring of the FCU andits relocation to the Isle of Man ConstabularyPolice Headquarters, embedding ML FT andcriminal investigations into the priorities forthe department.

This approach will be supported by astructured multi-agency tasking approachand the inclusion of better joint agencyworking with the Isle of Man Customs andExcise Law Enforcement and Income TaxDivision.

The revised model must ensure a morerobust resourcing with trained investigatorsavailable to receive intelligence packagesprovided by the FIU and/or third parties.

This will be underpinned by implementingthe training and development programmeenabling investigators to provide high qualityspecialist financial crime investigations.

Lead agency: IOM Constabulary

Other agencies: Home Affairs, Cabinet Office, Treasury Customs and Excise Division


R 30 and elements of R2, 4 and 37

IO 7, 8 and 9

21

Goal 5



Actions

• Re-structure financial crime investigation as a role of the Isle of Man Constabulary and,in relation to customs and indirect tax matters, Isle of Man Customs and Excise.

• Ensure that a policy and procedures for prioritising serious money laundering or financingof terrorism investigations is in place and that it is adhered to.

• Implement financial crime training for skills, knowledge and accreditation.

• Establish and implement the required procedures and processes between the FIU andthe Isle of Man Constabulary financial crime investigations and Isle of Man Customs andExcise Law Enforcement Section including tasking and coordinating.

• Identify and implement inter-departmental procedures to enable joint agency workingand resourcing of financial crime investigations as required.

• Ensure that comprehensive data on financial crime investigation is maintained in aconsistent and accessible manner and that it enables cases to be fully traced and theanalyses of cases to be undertaken.

22

Goal 6



GOAL 6Promote measures to increase asset forfeiture andrecovery, including civil recovery


Depriving criminals of the proceeds of theircrimes, whilst often a challenging andlengthy process, is a fundamental objectiveof the FATF and one which is gainingheightened importance internationally.

As the Isle of Man is an international financecentre, entities in the Isle of Man are at riskof being used for the purposes of layering19

the proceeds of crime rather than necessarilybeing used to hold the proceeds, which mayin fact be moved elsewhere.

Strategy

Ensure that asset forfeiture and recovery(including civil recovery) is workingeffectively in the Isle of Man, thatconfiscation of criminal assets is pursued asa policy objective so that victims can berestituted and confiscated assets contributeto the Island’s Seized Assets Fund orrepatriated or shared with other countries.

19 Layering is where the proceeds of crime are converted from one form to another, e.g. moved between various accounts and/or jurisdic-

tions to disguise the audit trail and the illegitimate source of the funds.

Lead agency: Attorney General’s Chambers

Other agencies: Cabinet Office, Treasury (Customs and Excise), FIU, Isle of ManConstabulary.


R 1, 2, 4 and 38 and elements of R 31 and 40

IO 8 and elements of IO 2, 6 and 7

23

Goal 6



Actions

• Review past and current cases of asset forfeiture and recovery in the Isle of Man toidentify any learning points.

• Develop and publish a national policy statement regarding asset forfeiture and recovery.

• Ensure that the policy is reflected in the approach taken by the FIU, financial crimeinvestigative officers and the Attorney General’s Chambers.

• Ensure that financial intelligence is used effectively in the pursuit of confiscation.

• Develop a process for investigation to enable civil recovery.

• Identify and allocate responsibility for leading on asset recovery and document requiredprocedures and processes with development and delivery of the required training for thestaff involved in forfeiture and recovery.

• Ensure that comprehensive statistics are kept regarding the proceeds of crime, assetsseized or frozen and the number and amount of confiscation orders and amountsrecovered.

24

Goal 7



GOAL 7Examine the implementation and enforcement ofregulatory sanctions


Supervision and monitoring by regulators isaimed at mitigating the risks of moneylaundering and terrorist financing in thefinancial and other relevant sectors. In orderto be effective it is important that violationsor failures in anti-money laundering andcombating the financing of terrorism areidentified and dealt with promptly, byregulatory sanctions where appropriate toencourage compliance and discourage abuse.

The NRA identified a general lack ofawareness within industry concerning theimplementation and enforcement ofsanctions by the regulators which mightdetract from the deterrent feature of theapplication of sanctions and thereby,effectiveness. Sanctions available to oneregulator were not necessarily available toanother.

Strategy

The administrative, civil and criminalsanctions regimes will provide proportionate,appropriate and dissuasive measures.Government agencies and industry are awareof the escalation criteria. The application ofsanctions is transparent and fair. Regulatorsare seen to have the full support ofGovernment in respect of the sanctionsregime.

Lead agencies: Financial Services Authority & Gambling Supervision Commission

Other agencies: Cabinet Office, Department of Home Affairs


R 26, 27, 28 and 35

IO 3 and elements of IO 1

25

Goal 7



Actions

• Assess impact of new civil penalty regime.

• Ensure all supervisors have a proportionate suite of sanctioning powers.

• Provide more published guidance to industry and guidelines regarding the uses ofremedial action, the application of administrative sanctions and the circumstances inwhich this may escalate to criminal sanctions.

• Maintain and publish statistics on levels and type of actions taken.

• Maintain statistics on referrals for criminal sanctions and outcome.

26

Goal 8



GOAL 8Implement oversight and supervision ofdesignated non-financial businesses andprofessions and assess progress


Designated non-financial businesses andprofessions (DNFBPs) include sectors whichact as gatekeepers to the financial system,for example advocates and accountants, aswell as smaller specialist sectors such aspayroll and estate agents.

It is a wide group some of which has beenself-regulated by professional bodies andsome of which has not been regulated foranti-money laundering and combating thefinancing of terrorism purposes.

There was little NRA data available in2014/15 for some DNFBPs other than fortrust and corporate service providers andgambling, which have been subject tooversight in the Isle of Man for some time20.

Strategy

Further to the enactment of the DesignatedBusiness (Registration and Oversight) Act inOctober 2015, continue registration ofapplicable DNFBPs and programme ofoutreach for information and educationalpurposes.

Ensure that all non-financial businessesundertaking activities in the Island have theappropriate oversight and supervision by theFSA and/or designated professional bodies inrespect of their obligations under relevantmoney laundering and financing of terrorismlegislation and that the identified risks areappropriately managed. Identify any otherapplicable sectors which require bringingunder the legislation.

20 TCSPs and gambling are therefore not the subject of this strategic goal.

Lead agency: Financial Services Authority

Other agencies: Cabinet Office, Office of Fair Trading


R 22, 23, 28, 34 and 35 and elements of 25

IO 3, and 4 and elements of IO 5

27

Goal 8



Actions

• Continue to undertake information provision and awareness raising with DNFBPsregarding the requirements of the legislation.

• Review progress on registration of relevant businesses and professions and take suchmeasures as required to ensure compliance.

• Establish arrangements for oversight by supervisory bodies and reporting where this isto be delegated.

• Develop sector specific anti-money laundering and combating the financing of terrorismguidance to assist the sectors.

• Commence programme of visits adopting a risk based approach.

• Review and determine process for assessing or re-assessing the money laundering andfinancing of terrorism risk of the sectors as required once a baseline of data andinformation is obtained.

• Identify any required amendments to guidance or regulations arising out of theregistration and oversight process or a visiting programme.

28

Goal 9



GOAL 9Implement enhanced measures at the border tostrengthen controls on cash and similarinstruments and assess effectiveness


As a member of the UK Common TravelArea21 the Isle of Man does not have formalborder controls. There are a number ofreasons why the absence of fixed controls isnot considered to be a significant risk.

Priorities will continue to be detectingprohibited or restricted items such as drugs,rather than cash, however the NRA identifiedmeasures that would assist in controlling themovement of cash and similar instrumentsinto the Island.

Strategy

Proactively monitor the effectiveness of newcontrols introduced in 201522 and the impactof training and awareness raising work withstaff at the ports and airport. Examine howreporting on movements at the airport(including private jets) and marinas might beimproved.

21 The Common Travel Area (CTA) comprises the UK, the IOM, the Channel Islands and Ireland. Subject to certain exceptions, the

CTA's internal borders are subject to minimal or non-existent border controls and can normally be crossed by British and Irish citizens

with minimal identity checks.

22 The Customs and Excise Management Act 1986 was amended in 2015 and the definition of ‘cash’ widened to cover e.g. stored value

cards.

Lead agency: Treasury (Customs and Excise Division)

Other agencies: Department of Home Affairs, Department of Infrastructure; FIU; Isle of ManPost Office


R 32 and elements of R 4, 38 and 40


29

Goal 9



Actions

• Review the impact of controls and regulations concerning declarations on cash andsimilar instruments (e.g. stored value cards).

• Improve reporting on movements at airport (including private jets) and the ferryport/marinas.

• Continue training and awareness programme with security and other staff at ports/airportand amongst postal and freight carriers.

• Progress the Customs and Excise Bill which introduces powers to strengthen controls;examine the case for other powers as needed.

• Maintain statistical data on cash seizures, data on training etc.

30

Goal 10



GOAL 10Promote training and awareness of anti-moneylaundering and combating the financing ofterrorism within Government


Domestic money laundering, though mainlyconnected with drugs, does take place onthe Isle of Man. As the largest employer inthe Island, the Government has aresponsibility to ensure that its officers areaware of this threat.

At a strategic level, as an internationalfinance centre it is highly relevant thatMinisters and senior officers in particularhave an understanding of the issues so thatthey are informed when assessing risks tothe Isle of Man.

Strategy

Ensure that all persons across government,including Ministers, Chief Officers andrelevant front line personnel, are aware ofthe threats of money laundering and terroristfinancing and the vulnerabilities of the Isle ofMan to those threats and how these mightmanifest themselves within the area ofgovernment applicable to them so thatdepartmental operations and proceduresmay be enhanced and developed to counterthose risks.

Ensure that Ministers responsible fordetermining policy in respect of combattingmoney laundering and terrorist financing aremade aware of emerging threats relevant tothe Isle of Man.


Other agencies: All Government departments, boards and offices handling large contractsand cash; the Isle of Man Constabulary, Attorney General’s Chambers, Courts Division, FIU,Office of Fair Trading; Treasury, Customs and Excise Division


R 33


31

Goal 10



Actions

• Develop and deliver programmes for raising awareness of anti-money laundering andcombating the financing of terrorism with political members, Chief Officers and seniorofficers

• Ensure that anti-money laundering and combating the financing of terrorism training forGovernment addresses the international standards which the Isle of Man is required tomeet.

• Develop and implement training programmes for front line staff handling certain typesof transactions including large cash settlements.

• Monitor and report progress on plans for increasing knowledge, training anddevelopment in financial crime matters including within the police, customs and excise,prosecutors and the judiciary.

• Ensure that data on anti-money laundering and combating the financing of terrorismtraining is kept and that the effectiveness of programmes, in particular those deliveredinternally, is assessed.

32

Imple

menta

tion o

f th

e n

ational st

rate

gy



Implementation of thenational strategy

The Anti-Money Laundering and Counteringthe Financing of Terrorism Strategic Group(the Strategic Group) will be responsible formonitoring and assessing the effectivenessof this strategy and reporting upon progresson an annual basis to the Council ofMinisters.

In delivering this national strategy, theStrategic Group will take also into accountany anti-money laundering/combating thefinancing of terrorism evaluations or relatedreports that are published, notably theoutcomes of the 5th Round MutualEvaluation Report by MONEYVAL which isexpected to be finalised in December 2016,and any relevant developments in the widerinternational environment.

Consequently this Strategy will be a dynamic,living document which accurately reflects andaddresses identified money laundering andterrorist financing risks for the Isle of Manand evidences progress to combat thoserisks.

Assessment of outcomes

Each lead agency identified within thestrategy will provide reports (verbal andwritten) on progress against relevant Goalsto meetings of the Strategic Group. Actionswill be monitored and amended where itappropriate to do so.

This Strategy will be a dynamic, living documentwhich accurately reflects and addresses identifiedmoney laundering and terrorist financing risks forthe Isle of Man and evidences progress to combatthose risks“

“

33

Appendix

I



Isle of Man GovernmentAML/CFT Framework

Several AML/CFT pan-Government groupsexist in the Isle of Man, including:

• The AML/CFT Strategy Group - a high levelcommittee consisting of senior officers fromGovernment, the regulators and lawenforcement, chaired by the Chief Secretary.

• The AML/CFT Technical Group - whichreports into the Strategic Group.

• The Joint Anti-Money Laundering Advisory

Group (JAMLAG) - an industry liaison forumwhich brings together Government,regulators and industry. The work of thisgroup feeds into the considerations of boththe Strategic and the Technical AML/CFTgroups.

The diagram below sets out the inter-relationships between the various AML/CFTgroups. Political bodies are highlighted inblue; officers in green and industry in pink.The Serious Crime Strategic Board will bereplaced by the FIU Board once the FinancialIntelligence Unit Bill receives Royal Assent.

Appendix I

Council of

Ministers

National Strategy

Group

Serious Crime

Strategic Board of

the FCU

NRA Strategic

Group

JAMLAG Consultative

Group

Industry bodies and

Professional

Associations

AML/CFT

Strategic Group

AML/CFT

Technical Group

Figure 1 Isle of Man Government AML/CFT Groups

34

Appendix

I



Council of Ministers

The Council of Ministers is the highest leveldecision making body within the Isle of ManGovernment. It consists of eight Ministersand the Chief Minister with a small numberof advisers also present. Its purpose is to setnational and international policy whichincludes matters in respect of AML/CFT andto provide clear leadership to the separatelegal entities of departments, offices andstatutory boards which make up the Isle ofMan Government. It also has some statutorydecision-making functions and importantlyhas a reserved power to give a departmentor statutory board directions with regard tothe exercise of functions where it appears toit to affect the public interest.

National Strategy Group

The National Strategy Group (NSG) is a sub-committee of the Council of Ministers andconsists of the Chief Minister and theMinisters for Treasury and EconomicDevelopment with a number of advisorspresent. It is responsible for ensuring thatpriority is given to national imperativeswithin the National Strategic Plan. TheCommittee identifies work streams whichrequire policy development and togetherwith the other Council of MinistersCommittees, identifies and drafts policies torecommend to Council of Ministers.

Anti-Money Laundering and Combating theFinancing of Terrorism Strategic Group

The purpose of the Anti-Money Launderingand Combating the Financing of TerrorismStrategic Group (AML/CFT Strategic Group) isto provide an effective mechanism to enablerelevant officers in Government, theregulators and law enforcement in the Islandto cooperate and coordinate with each otherconcerning the development andimplementation of policies and activities

related to combating ML/TF, the financing ofproliferation of weapons of mass destruction,and compliance with related internationalfinancial standards. The terms of referenceare as follows:

a. To support the Isle of Man GovernmentCommitment to Combating MoneyLaundering and the Financing of Terrorismand Proliferation through the provision ofcorporate advice and support.

b. To consider the implications for the Islandof the development of relevant internationalstandards and related initiatives.

c. To lead on and coordinate preparations forassessments of the Island’s compliance withthe FATF Recommendations, and otherrelevant international standards such asBasel, IOSCO and IAIS, by internationalbodies.

d. To lead on and coordinate theconsideration and progression of anyrecommendations made following theinternational assessments referred to above.

e. To provide advice to the Council ofMinisters on relevant matters and to makerecommendations to Council where anysignificant policy decision is required, and inparticular where there may be financial orresource implications, or issues concerningthe international reputation of the Island.

The AML/CFT Strategic Group is chaired bythe Chief Secretary and comprises, ex officio,the Chief Financial Officer, Chief Executive ofthe Department of Home Affairs, HM ActingAttorney General, Chief Executives of theregulators, the Chief Constable and anumber of advisers from across Government.The Strategic Group is not a legal entity,neither is it provided for in currentlegislation; rather the Strategic Groupreceives its mandate from the Council ofMinisters.

35

Appendix

I



Serious Crime Strategic Board23

The Serious Crime Strategic Board is chairedby the Chief Constable and brings togetherpartner agencies in order to provide thenecessary governance for the operation ofthe Financial Crime Unit (which includes theFIU).

The Chief Constable is accountable to theMinister for Home Affairs, but works closelywith the partner agencies to meet strategicand operational objectives and ensures thatthe Board considers any strategic andorganisational requirements proposed for itby the Council of Ministers. The partneragencies are the Department of HomeAffairs, HM Attorney General’s Chambers, theIncome Tax Division of the Treasury, and theCustoms and Excise Division of the Treasury.

The FCU also has a role in formulating AMLpolicy and strategy. Furthermore the ChiefConstable sits on the AML/CFT StrategicGroup and the Head of the FCU sits on theAML/CFT Technical Group. This ensures thatany practical difficulties and findings madethrough the process of investigation caninform the formulation of strategy and thepotential risk areas for the Isle of Man.

Anti-Money Laundering and Combating theFinancing of Terrorism Technical Group

The overall purpose of the AML/CFTTechnical Group is to provide advice andsupport to the AML/CFT Strategic Group inrespect of the development of ML regulation,the implications for the Isle of Man of

changes to international standards and theeffectiveness of measures intended to tackleML/TF at Government and industry level. TheTechnical Group comprises representativesfrom the regulators, law enforcement, theTreasury, the Cabinet Office, theDepartments of Home Affairs and EconomicDevelopment and the Office of Fair Trading.Ad hoc sub groups may be formed toconsider particular issues. The Group is aforum for coordination and discussion acrossGovernment as well as focussing on mattersin respect of AML/CFT regulation andguidance and emerging issues in respect ofthe application of regulation.

Joint Anti-Money Laundering Advisory Group

The Joint Anti-Money Laundering AdvisoryGroup (JAMLAG) is a representativediscussion forum for regulators, lawenforcement authorities and industry. Itprovides a forum in which key stakeholderscan comment and advise on prospectivechanges to AML regulations and guidance.Furthermore, JAMLAG aims to fostercoordination of AML practices betweendifferent industry sectors and acts, asappropriate, as a review body for majorchanges to international ML standards whichmight be promulgated. Ad hoc sub groupsmay be formed to consider particular issues.Chairmanship of JAMLAG meetings rotatesbetween the relevant authorities.

23 A Financial Intelligence Unit Bill is expected to receive Royal Assent in spring 2016. The SCSB will then be

superseded by an FIU Board, established in law, as the FIU becomes a separate legal entity. The FIU Board will

comprise HM Attorney General, the Chief Constable and the Collector, Customs and Excise. Its functions are set

out in the legislation. The FIU Board will have a role in advising the Strategic Group regarding AML/CFT policy

and strategy.

36

Appendix

II



THE FATF RECOMMENDATIONS AND IMMEDIATE OUTCOMES24

Appendix II

24 For information concerning the details underpinning each Recommendation see http://www.fatf-gafi.org/publications/fatfrecommendations/.

For information concerning the background to the FATF Methodology and IOs see http://www.fatf-gafi.org/media/fatf/documents/methodology.

Version as adopted on 15 February 2012.

INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION

R 1 Assessing risks & applying a risk-based approach

R 2 National cooperation and coordination

R 3 Money laundering offence

R 4 Confiscation and provisional measures

R 5 Terrorist financing offence

R 6 Targeted financial sanctions related to terrorism & terrorist financing

R 7 Targeted financial sanctions related to proliferation

R 8 Non-profit organisations

R 9 Financial institution secrecy laws

R 10 Customer due diligence

R 11 Record keeping

R 12 Politically exposed persons

R 13 Correspondent banking

R 14 Money or value transfer services

R 15 New technologies

R 16 Wire transfers

R 17 Reliance on third parties

R 18 Internal controls and foreign branches and subsidiaries

R 19 Higher-risk countries

R 20 Reporting of suspicious transactions

R 21 Tipping-off and confidentiality

R 22 DNFBPs: Customer due diligence

R 23 DNFBPs: Other measures

R 24 Transparency and beneficial ownership of legal persons

R 25 Transparency and beneficial ownership of legal arrangements

R 26 Regulation and supervision of financial institutions

R 27 Powers of supervisors

R 28 Regulation and supervision of DNFBPs

R 29 Financial intelligence units

R 30 Responsibilities of law enforcement and investigative authorities

R 31 Powers of law enforcement and investigative authorities

R 32 Cash couriers

R 33 Statistics

R 34 Guidance and feedback

R 35 Sanctions

R 36 International instruments

R 37 Mutual legal assistance

R 38 Mutual legal assistance: freezing and confiscation

R 39 Extradition

R 40 Other forms of international cooperation

37

Appendix

Ii



THE FATF IMMEDIATE OUTCOMES

IO 1Money laundering and terrorist financing risks are understood and, where

appropriate, actions co-ordinated domestically to combat money laundering

and the financing of terrorism and proliferation.

IO 2International co-operation delivers appropriate information, financial

intelligence, and evidence, and facilitates action against criminals and

their assets.

IO 3Supervisors appropriately supervise, monitor and regulate financial

institutions and DNFBPs for compliance with AML/CFT requirements

commensurate with their risks.

IO 4Financial institutions and DNFBPs adequately apply AML/CFT preventive

measures commensurate with their risks, and report suspicious transactions.

IO 5Legal persons and arrangements are prevented from misuse for money

laundering or terrorist financing, and information on their beneficial

ownership is available to competent authorities without impediments.

IO 6Financial intelligence and all other relevant information are appropriately

used by competent authorities for money laundering and terrorist financing

investigations.

IO 7Money laundering offences and activities are investigated and offenders are

prosecuted and subject to effective, proportionate and dissuasive sanctions.

IO 8Proceeds and instrumentalities of crime are confiscated.

IO 9Terrorist financing offences and activities are investigated and persons who

finance terrorism are prosecuted and subject to effective, proportionate and

dissuasive sanctions.

IO 10Terrorists, terrorist organisations and terrorist financiers are prevented from

raising, moving and using funds, and from abusing the NPO sector.

IO 11Persons and entities involved in the proliferation of weapons of

mass destruction are prevented from raising, moving and using

funds, consistent with the relevant UNSCRs.

38

Glo

ssary

or

term

s and a

cronym

s



GLOSSARY OF TERMS AND ACRONYMS

AGC Attorney General’s Chambers

AML Anti-Money Laundering

AML / CFT Anti-Money Laundering / Combating Financing of Terrorism

AML / CFT Code Anti-Money Laundering and Countering the Financing of Terrorism Code 2015

C&E (Isle of Man) Custom and Excise Division

CFT Countering the Financing of Terrorism

CSP Corporate Services Provider

CTA Common Travel Area

CVC Convertible Virtual Currency

DED Department of Economic Development

DHA Department of Home Affairs

DNFBP Designated Non-Financial Business or Profession

DB(RO) Act 2015 Designated Businesses (Registration and Oversight) Act 2015

FATF Financial Action Task Force

FCU Financial Crime Unit

FIU Financial Intelligence Unit

FSA Financial Services Authority

GSC Gambling Supervision Commission

HVGD High Value Good Dealer

OFI Other Financial Institution

ILOR International Letters of Request

IOM Isle of Man

IOMG Isle of Man Government

JAMLAG Joint Anti-Money Laundering Advisory Group

ML Money Laundering

MLAR Mutual Legal Assistance Request

MLRO Money Laundering Reporting Officer

ML / TF Money Laundering / Terrorist Financing

ML / TF Code Anti-Money Laundering and Countering the Financing of Terrorism Code 2015

MONEYVAL Council of Europe’s committee of experts on money laundering, which conducts

AML/CFT assessments of the Isle of Man

MSB Money Service Business

NPO Non-Profit Organization

NRA (Isle of Man) National Risk Assessment

OFT (Isle of Man) Office of Fair Trading

PEP Politically Exposed Person

SAR Suspicious Activity Report

STR Suspicious Transaction Report

SCSB Serious Crime Strategic Board

SRB Self-Regulated Body

TIEA Tax Information Exchange Agreement

TCSP Trust and Company Services Provider

TF Terrorist Financing

Tynwald Parliament of the Isle of Man

WMD Weapons of Mass Destruction

Term or acronym Definition

39



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