National Risk Assessment

National Risk Assessment of Money Laundering and Combating the Financing of Terrorism and the Financial Crime Strategy

Recommendation 1 of the Financial Action Task Force (FATF), which is the body responsible for setting international standards for anti-money laundering and combating the financing of terrorism (AML/CFT), requires countries to conduct assessments of their Money Laundering / Terrorist Financing (ML/TF) risks and to introduce measures to address these risks. These assessments are referred to as National Risk Assessments (NRA).

In 2015, the Isle of Man was one of the first countries to publish the results of an NRA under this Recommendation, using the World Bank NRA Self-Assessment Tool, a recognised model that has since been widely used by other countries.

The NRA identified what the highest domestic and non-domestic threats were to the Isle of Man in respect of ML and TF. In addition, it also sets out detailed analysis of each financial and non-financial sector in the Island, the size and significance of that sector to the economy, the relevant money laundering and terrorist financing threats and vulnerabilities for each sector and the nature of the controls in place to frustrate this happening.

The Isle of Man Government has since published an updated risk assessment of money laundering and terrorist financing, the NRA 2020, which builds upon the 2015 assessment and the findings of the MONEYVAL Mutual Evaluation Report of 2016.

The NRA 2020 was developed through cross-government participation, including the police, financial intelligence, customs, the courts, prosecutors and the regulators. The process also included industry involvement, with representatives from professional bodies and associations of relevant sectors contributing to the development of the NRA.

Further to the production of the Islands NRA 2020, the Council of Ministers has also adopted the Financial Crime Strategy 2021-2023. This high-level report is the Isle of Man’s third national strategy specific to fighting AML/CFT and has been informed by the key findings of the NRA 2020 and several of the outstanding matters carried forward from the Financial Crime Strategy 2017-2020.