National money laundering risk remains medium-high

The Isle of Man's vulnerability to money laundering has not changed significantly in recent years despite "increasingly sophisticated" criminal methods, the home affairs minister has said.

A new National Risk Assessment on money laundering has pulled together the overarching threat of firms falling prey to criminal activity, putting the island's risk at medium-high.

The document is designed to help firms strengthen their policies to safeguard against potential criminal activity.

Jane Poole-Wilson said threats facing the island had increased through continued digital advancements, including virtual assets and artificial intelligence.

Data gathered came from the finance industry, regulators, law enforcement bodies and the financial intelligence unit.

Although assessments of individual sectors - including the banking and not-for- profit sectors - have previously been released, the latest report represents the overall risk across the economy.

The document said cyber-enabled fraud, investment scams, and romance fraud remained among the drivers of foreign offending, while the domestic threat was largely driven by drug importation and labour exploitation.

It also identified transnational organised crime – including Asian and UK-linked organised crime groups – affecting the gambling market and immigration systems.

Sectors identified as having the highest risk were banking, online gambling and trust and corporate service providers.

Poole-Wilson said the "nature of the way in which we might see money laundering arising" had changed since 2020, with a "sophisticated criminal risk" associated with "the ways in which people might move money today".

That included moving outside the traditional banking and financial system, and using alternative methods to transfer money, which was enabled by virtual assets and cyber criminality and the use of AI.

However, she said over the same period the island's ability to identify and then tackle the threats had "improved considerably".

Improvements included having a proactive international money laundering investigation team, which was "absolutely geared up to investigate and pursue this type of criminality", including freezing illicit assets.

The publication of the national risk assessment comes ahead of this year's Moneyval evaluation – which will see a committee of the Council of Europe assess the island's compliance with international anti-money laundering and counter-terrorist financing standards.

Poole-Wilson said the document illustrated that "we do understand the evolving nature of risk and our ability to step up and address that as it evolves".

She said the island's place as an international financial centre meant it remained a cornerstone of the Manx economy and the risk assessment would allow the industry to "thrive here in a way that meets international standards and makes sure that we are not facilitating money laundering or other financial crime".

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