14th September 2009
IMF report confirms high level of compliance
THE Isle of Man’s continuing high level of compliance with global standards of financial sector regulation and supervision - including international co-operation and the combating of money laundering - has been confirmed by the International Monetary Fund (IMF).
A report published today by the IMF shows that the Island is amongst the top countries in the world in terms of implementing the recommendations of the Financial Action Task Force (FATF) to counter money laundering and terrorist financing.
The report has been produced following a thorough assessment by an IMF team, which visited the Island in September last year as part of an international programme of inspections. In addition to the Island’s defences against money laundering and terrorist financing (AML/CFT) the IMF looked at the regulatory and supervisory system, the soundness of the financial system and its ability to cope with stress situations.
The report concludes that ‘…. the Isle of Man is broadly compliant with most aspects of the FATF recommendations ….’, having continued to upgrade its requirements significantly. The report further states that ‘the quality of implementation of AML/CFT measures by financial institutions was found to be mainly of a high standard. In meetings with financial institutions (as well as in some cases their auditors and legal advisors) the assessors found a very high level of awareness of AML/CFT risks and requirements’. Most of the recommendations noted are technical in nature.
The report says the Island has a general high standard of financial sector regulation and supervision, and a ‘very high standard of compliance’ with the Basel Core Principles for effective banking supervision. The IMF found that the Manx banking system had a limited exposure to market shocks, with a ‘very sound’ level of capitalisation. The insurance sector was found to be similarly well regulated, also with ‘considerable resilience against shocks’.
The report goes on to say that ‘the Isle of Man authorities take their responsibilities in the area of international co-operation seriously’, citing supervisory co-operation, mutual legal assistance and tax information exchange agreements.
The report notes that the coverage provided by the Isle of Man’s Depositors’ Compensation Scheme is ‘unusually extensive for a small, internationally-oriented jurisdiction.’
The IMF first gave the Isle of Man a regulatory clean bill of health in 2003, when it reported that the Island complied well with international standards for the regulation and supervision of financial services.
Welcoming the latest report, Chief Minister Tony Brown MHK said:
‘This report from the International Monetary Fund is a comprehensive, independent and expert endorsement of the quality of the Isle of Man’s financial services regime. We in the Isle of Man have always worked hard to achieve a high level of compliance with international standards, and will continue to do so as the standards evolve.’
The full IMF report on the Isle of Man can be found at the Isle of Man Financial Supervision Commission website at: http://www.gov.im/fsc/ViewNews.gov?page=lib/news/fsc/imfreport1.xml