Sanctions relating to Terrorism and Terrorist Financing

In the Island, there are a number of sanctions regimes that relate to terrorism and terrorist financing.

For information on the sanctions regimes relating to terrorism and terrorist financing and the potential risks to businesses in the Island and how to mitigate those risks, please read the following guidance:

• Counter-terrorism sanctions guidance
• Counter-terrorism (international) sanctions guidance
• ISIL and Al Qaida sanctions guidance
• Afghanistan sanctions guidance
  
  

What is terrorism and terrorist financing

In general terms, the financing of terrorism is the act of providing funds to terrorists or terrorist organisations in order for them to carry out terrorist acts or to benefit them. Terrorism or terrorist activities can include:

(a) Being responsible for, engaging in, or providing support for, the commission, preparation or instigation of acts of terrorism

(b) Providing financial services, or making available funds or economic resources, for the purposes of terrorism

(c) Facilitating, promoting or encouraging terrorism

(d) Providing or receiving training for the purposes of terrorism

(e) Travelling or attempting to travel from or into the relevant territory for the purposes of terrorism

(f) Carrying out recruitment activities for a person who is involved in terrorism

(g) Being involved in the sale, supply or transfer of arms or material related to arms to a person who is involved in terrorism

(h) Engaging in trade of whatever description with a person who is involved in terrorism

(i) Being responsible for, engaging in, being complicit in, providing support for, or promoting, the abduction, enslavement, forced marriage or rape of, or sexual violence against, persons outside the relevant territory on behalf of, or in the name of, a person who is involved in terrorism

(j) Supporting or assisting any person who is known or believed by the person concerned to be involved in any activity as mentioned in paragraphs (a) to (i)

(k) Being involved in assisting the contravention or circumvention of any relevant provision

Terrorist financing differs from money laundering in that the source of funds can either be legitimate, such as an individual's salary, profit from legal businesses or gifts including those made through non-profit organisations.

Similar to money laundering, terrorism financing often involves three steps: raising, moving, and using funds. Despite the various steps, financing terrorism is done in a manner similar to, and in some instances may be identical to, that of money laundering. In each instance, the offender aims to use the financial or non-financial sectors for improper ends.

This page provides further information about terrorist financing.

Legislation

The United Nations sanctions regimes relating to terrorism and terrorist financing that have effect in the Island are stated below.

Although the Isle of Man is not a UN member in its own right, the UK's membership of the UN extends to the Island.

Afghanistan

United Nations Security Council Resolution 1988 (2011) which is legally given effect in the Island by:

a) Sections 44-50 of the Terrorism and Other Crime (Financial Restrictions) Act 2014 and

b) The Afghanistan (Sanctions) (EU Exit) Regulations 2020 which have effect in the Island by the Sanctions (Implementation of UK Sanctions) Regulations 2024

Impose the following types of sanctions:

• Targeted asset freeze
• Trade sanctions
  
  

ISIL and Al-Qaida

United Nations Security Council Resolution 1267 (1999) which is legally given effect in the Island by:

a) Sections 44-50 of the Terrorism and Other Crime (Financial Restrictions) Act 2014 and

b) The ISIL (Da'esh) and Al-Qaida (United Nations Sanctions) (EU Exit) Regulations 2019 which have effect in the Island by the Sanctions (Implementation of UK Sanctions) Regulations 2024

Impose the following types of sanctions:

• Targeted asset freeze
• Trade sanctions

The United Nations sanctions regimes relating to proliferation and proliferation financing that have effect in the Island are stated below.

United Kingdom sanctions regimes

The United Kingdom sanctions regimes relating to terrorism and terrorist financing that have effect in the Island are counter-terrorism designations implemented pursuant to United Nations Security Council Resolution 1373 (2001) which is legally given effect in the Island by:

a) The Counter-Terrorism (Sanctions) (EU Exit) Regulations 2019 which have effect in the Island by the Sanctions (Implementation of UK Sanctions) Regulations 2024

b) The Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019 which have effect in the Island by the Sanctions (Implementation of UK Sanctions) Regulations 2024

Impose the following types of sanctions:

• Targeted asset freeze
• Trade sanctions
• Immigration
  
  

Isle of Man sanctions regimes

The Treasury also has the power to designate persons pursuant to United Nations Security Council Resolution 1373 (2001).

Designations may be made under section 18 of the Terrorism and Other Crime (Financial Restrictions) Act 2014

Impose the following types of sanctions:

• Targeted asset freeze

There are currently no designations made under this power.

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What do I need to do

If you suspect a person or entity is a match to a person or entity included in the UK Sanctions List, and you hold or otherwise deal with funds or economic resources of that person:

1. You must freeze the assets immediately upon identification
   
   
2. You must review the information you hold for that person against the UK Sanctions List to ensure you do not have a false positive identification
   
   
3. Do not deal with those assets or make them available to, or for the benefit of the designated person unless:
• You have a legal exemption
• You have a licence
  
  
4. You must report the frozen assets to the Financial Intelligence Unit ('FIU')
   
   

If you have a suspicion or knowledge that there has been a breach of sanctions law, or any attempted transactions that you have blocked, report your suspicions to the FIU.

If you are a relevant firm, you must have appropriate AML/CFT/CPF policies, procedures and controls in place to mitigate the risk of breaching sanctions law.

You must have appropriate procedures in place to be able to:

• Determine if a customer is included on the UK Sanctions List
• Know how to freeze an account if you have a sanctions match
• Know how to report frozen assets or a suspicion to the FIU
• Know what to do if a person or entity is removed from the UK Sanctions List ('delisting')

Note: determining if a customer is on the UK sanctions list includes whether any corporate entity is owned or controlled, directly or indirectly, by a person on the UK Sanctions List.

You should also ensure that you and your employees have appropriate training and keep this up to date. Further guidance on sanctions compliance can be found here:

Further guidance on false positives and delistings and what to do can be found in the financial sanctions general guidance:

Reporting requirements

The financial sanctions regimes have two reporting components to them. The first is a general obligation that applies to everyone. The second is a more targeted obligation that applies to specified businesses and professions.

General reporting requirement

There is a requirement for natural and legal persons, entities and bodies to supply the Financial Intelligence Unit ('FIU') as soon as practicable with any information that facilitates compliance with sanctions legislation.

This requirement applies to natural and legal persons, entities and bodies in the Isle of Man or under Isle of Man jurisdiction and not just to credit or financial institutions or to individuals working for them. If you are unsure of your reporting obligations, you should seek independent legal advice.

How do I make a report

Many businesses on the Island in the regulated sector will already be familiar with the FIU's online reporting system THEMIS. Those registered to use THEMIS should make their reports via this online system.

If you are not registered on Themis, please contact the FIU in the first instance.

Reporting frozen assets

Include in your report:

• The value of the funds or economic resources
• Details of any accounts held, e.g. account numbers, policy references etc
• Where funds or economic resources are located
• Ownership and control structures if applicable

Reporting a suspicion or knowledge of a sanctions breach

Include in your report:

• The information or other matter on which the knowledge or suspicion is based
• Any information you hold about the person or designated person by which they can be identified
  
  

Challenging designations

Those who are subject to financial sanctions can challenge their listing and request their delisting. The financial sanctions will remain in place while the challenge or request is being considered.

UN listing

For UN listings under the ISIL (Da'esh) and Al-Qaida sanctions regime, a petition for delisting can be made to the UN Office of the Ombudsman to the ISIL (Da'esh) and Al-Qaida Sanctions Committee. For more information about the Office of the Ombudsman please see the UN's website.

For other UN listings, a request should be sent to the UN focal point for delisting. More information about the focal point is available on the UN's website.

Alternatively, if you are a UK resident or citizen (which for the purposes of UN listing includes an Isle of Man resident), you can petition the UK by submitting a Sanctions Review Request Form to the UK directly at sanctions.reassessment@fcdo.gov.uk (see more below)

UK listings

If you are a designated person (other than a person designated under a UN list), you, or a person acting on your behalf, have the right to request a revocation or variation of your designation. You may wish to request a revocation, for instance, if you believe that the reasons for your designation are incorrect, or a variation if, for instance, particular information associated with your designation, such as your date of birth, is incorrect. Other reasons for seeking a revocation could include if you believe your designation is inappropriate having regard to the purpose of the regime, or the likely significant effects of the designation, or it is incompatible with the Human Rights Act 1998. For further information, including eligibility to apply for a variation or revocation of a designation, submitting a sanction challenge form and other information, consult the Foreign and Commonwealth Office guidance.

Isle of Man designations

There are currently no persons or entities who are designated under the Terrorism and Other Crime (Financial Restrictions) Act 2014.

Further Information and Guidance

Further information on the sanctions regimes relating to terrorism and terrorist financing can be found in the following guidance.

For information highlighting potential risks to businesses in the Island from terrorism and terrorist financing and how to mitigate those risks, please read the following guidance:

• Counter-terrorism sanctions guidance
• Afghanistan sanctions guidance
• ISIL (Da'esh) and Al-Qaida sanctions guidance

You may also be interested in:

• Sanctions Guidance
• Isle of Man Financial Intelligence Unit
• Office of Financial Sanctions Implementation