Anti-Money Laundering Guidance
The GSC is committed to combatting Money Laundering, Financing Of Terrorism & Proliferation Financing. Collectively these requirements are known as AML/CFT controls
As the Island's gambling regulator, the GSC is responsible for regulatory oversight of the gambling sector including operators’ compliance with legislation such as the Gambling Acts and the Gambling (Anti- Money Laundering and Countering the Financing of Terrorism) Code 2019 (the Code).
We do this through inspections that are focussed on the policies, procedures and controls a Licence Holder has in place and how they adhere to these and ensure all their staff members are aware of their roles and responsibilities, through a robust training programme.
The GSC participates in national initiatives to continually assess the risk of money laundering and terrorist financing within the gambling sector as well as evaluation exercises, conducted by external teams of assessors, which check the Isle of Man’s national commitment and performance against international standards
This webpage features lots of helpful information in relation to what AML/CFT is, how it affects you as a licence holder and plenty of guidance documents to assist you.
It also sets out the role of the FATF & MONEYVAL and how the Isle of Man's national strategy is geared up to complying with international standards to counter money laundering and the financing of terrorism.
You can email any questions you have to our team at gscamlinspections@gov.im
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What is Money Laundering?
Money laundering (ML) is the processing of criminal proceeds to disguise their illegal origin. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.
For more information on money laundering, read the Isle of Man Government fact sheet here
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What is Proliferation Financing?
Proliferation financing refers to the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual- use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligation. - Financial Action Task Force (FATF) 2012
For more information on proliferation financing, read the Isle of Man Government fact sheet here
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What Is The Financing of Terrorism?
In general terms, the financing of terrorism (“FT”) is the financial support, in any form, of terrorism or those who encourage, plan or engage in terrorism. FT differs from money laundering in that the source of funds can either be legitimate, such as an individual’s salary, crowdfunding or charity donations, or illegitimate, often the proceeds of crimes such fraud, drug trafficking or kidnap for ransom.
For more information on the financing of terrorism, read the Isle of Man Government fact sheet here
- AML/CFT Guidance Documents Published by the GSC
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FATF and MONEYVAL
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989. The objectives of the FATF are to set standards and promote effective measures for combating money laundering, terrorist financing and other related threats to the international financial system. As a 'policy-making body’, it aims to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
The FATF has developed a series of Recommendations that are recognised as the international standards for combating money laundering and the financing of terrorism and the proliferation of weapons of mass destruction. They form the basis for a co-ordinated response to these threats and help ensure a level playing field. First issued in 1990, the FATF Recommendations were most recently revised in 2012 to ensure that they remain up to date and relevant, and they are intended to be of universal application.
The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, promotes appropriate actions globally and works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.
The FATF's decision-making body, the FATF Plenary, meets three times per year.
FATF-Style Regional Bodies
Nine FATF-Style Regional Bodies (FSRBs) have also been established for the purpose of disseminating international standards throughout the world. Each FSRB conducts evaluations of the AML/CFT systems of their member states against the FATF standards and makes recommendations for areas of improvement. The regional bodies also study typologies – the most common schemes used by criminals for money laundering and terrorist financing and disseminate best practices to the private sector, regulatory bodies and law enforcement.
The FATF-style regional body for the Isle of Man is MONEYVAL, the Council of Europe Anti-Money Laundering Group based in Strasbourg, France.
MONEYVAL and Mutual Evaluation
MONEYVAL assesses its members' compliance in the legal, financial and law enforcement sectors through a peer review process of mutual evaluations, including assessing the effectiveness with which measures to tackle money laundering and the financing of terrorism are implemented in practice. The Committee also makes recommendations to national authorities to improve their systems.
In 2016, a group of MONEYVAL experts carried out an assessment of the Isle of Man. The assessment looked at the technical framework in place (legislation, policies and procedures) and the effectiveness with which these measures were implemented.
The findings of that assessment were published in the ‘Fifth Round Mutual Evaluation Report of the Isle of Man or Mutual Evaluation Report (MER). The MER was published in December 2016 and provided a comprehensive assessment of the extent to which the Isle of Man had implemented the 40 FATF Recommendations and highlighted areas where further progress was required.
Following the completion of the mutual evaluation, the Isle of Man was placed into an ‘enhanced follow-up’ process with MONEYVAL, in order to monitor progress in improving its AML/CFT regime. This is not unusual after a Fifth Round Evaluation; the majority of countries assessed to date have been placed in this category and all jurisdictions are placed into some form of follow-up process.
Progress made since the publication of the Island’s Fifth Round MER
The Isle of Man Government, regulatory and law enforcement authorities have undertaken a considerable amount of work since the publication of the MER in 2016, in order to address the findings and numerous recommended actions of the in-depth assessment. Actions include, increased investment in an expanded Financial Intelligence Unit, the formation of an Asset Recovery Unit within the Attorney General’s Chambers and the enactment of legislation dealing with money laundering, have been publicised.
In 2020, a review report was published by the Isle of Man Government on the progress, which has been made in relation to tackling money laundering and combatting the financing of terrorism. The review demonstrated that the Isle of Man had made significant progress and highlighted what work has been completed since the MONEYVAL evaluation took place, providing a more detailed analysis of actions taken against each of the recommendations made in the MER.
The Isle of Man is now positively marked in 39 out of the 40 FATF Recommendations, which puts the Island amongst a select group of leading nations in the world for technical compliance in anti-money laundering measures. Following the conclusion of the 61st MONEYVAL Plenary Council meeting in April 2021, it was confirmed that the Isle of Man is no longer required to report to MONEYVAL on an annual basis. The Isle of Man will remain in the ‘enhanced follow-up’ process until an on-site review takes place; however will only be required to report to MONEYVAL every three years.
The assessment reports made by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism can be read on their website here
The GSC is committed to meeting the recommendations of MONEYVAL.
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Isle of Man National Strategy on Anti-Money Laundering
Anti-Money Laundering and Countering the Financing of Terrorism Policy Office
The Anti-Money Laundering and Countering the Financing of Terrorism Policy Office was established by the Chief Secretary in 2016. The Policy Office acts as the coordinating body for the Isle of Man’s Anti-Money Laundering and the Combatting the Financing of Terrorism (AML/CFT) regime, coordinating the Island’s engagement with two key international organisations:
- The Financial Action Task Force (FATF),
- MONEYVAL
More information on their aims and objectives can be found on their website by clicking on the Cabinet Office Image
Isle of Man Government National Risk Assessment
The Cabinet Office have also undertaken a National Risk Assessment of Money Laundering and Combating the Financing of Terrorism and the Financial Crime Strategy.
Further information on the national risk assessment work can be found on their website by clicking on the Cabinet Office Image
Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Advisory Group
The AML/CFT Advisory Group is established by the Cabinet Office and its membership includes representatives from the Cabinet Office, IoM Financial Services Authority, Gambling Supervision Commission, Financial Intelligence Unit, Customs and Excise Department of Home Affairs, Department for Enterprise, professional bodies and industry associations.
The purpose of the AML/CFT Advisory Group is to strengthen communications, the exchange of information regarding emerging issues, and facilitate cooperation between Government, the regulators and industry in order to combat the misuse of the Isle of Man's financial systems by persons attempting to commit financial crimes.
Further information on the work of the AML/CFT Advisory Group including the minutes of their meetings, can be found on their website by clicking on the Cabinet Office Image
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Isle of Man Customs & Excise - Sanction & Export Control
Isle of Man Customs & Excise - Sanction & Export Control
The Isle of Man Customs and Excise Division is responsible for the implementation of UN and UK financial and economic sanctions and export and trade licensing controls in the Isle of Man.
Their website is a valuable source of information