Isle of Man Issues Standalone Terrorist Financing Risk Assessment to Bolster International Financial Integrity

The Isle of Man Government has released its first standalone Terrorist Financing (TF) National Risk Assessment (NRA), marking a major development in the Island’s strategy to enhance its resilience against terrorist financing activities. This latest initiative underscores the jurisdiction’s strong alignment with international standards and its commitment to safeguarding the global financial ecosystem.

The new TF NRA builds upon the foundations laid by the Island’s previous Money Laundering and Terrorist Financing National Risk Assessments published in 2015 and 2020. In contrast to those broader evaluations, the current document delivers a concentrated examination of TF risks specific to the Isle of Man’s status as an international financial centre. It is a key component of the Isle of Man’s strategy to meet the recommendations issued by the Financial Action Task Force (FATF), which focuses on anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation (AML/CFT/CPF).

The assessment process commenced in April 2024 and was informed by the expertise of 48 local professionals, representatives from various sectors of the financial industry, and insights from international partners, including the UK Home Office and the World Bank.

According to the report, the Isle of Man continues to face a medium-low overall risk of being misused for terrorist financing purposes. The primary vulnerability identified lies in the area of transit terrorist financing—specifically, the possibility of funds being channelled through the Island’s financial institutions to other jurisdictions. Although the medium-low rating is consistent with the 2020 TF NRA, the current analysis provides greater assurance of this conclusion due to the enhanced data, depth of information, and a more granular risk assessment.

The FATF, as an inter-governmental body, is responsible for establishing global benchmarks and encouraging effective frameworks to combat money laundering, terrorist financing, and associated threats. For the Isle of Man, the FATF-style regional body overseeing these obligations is MONEYVAL—the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism—based in Strasbourg, France.

As part of its continuing efforts to comply with FATF standards, the Isle of Man will undergo an evaluation by MONEYVAL in October next year. The Government has made clear that its chief priority remains the prevention, detection, and disruption of criminal activity on an international scale. Should the Island fail to meet the expected international standards, it risks being placed on the so-called “grey list,” a designation that could inflict serious economic consequences and damage the jurisdiction’s international business reputation.

Jane Poole-Wilson MHK, Minister for Justice and Home Affairs, emphasized the importance of this undertaking, stating: “This assessment is a vital tool in our ongoing efforts to protect the Isle of Man’s financial system and uphold our international obligations. It reflects the depth of collaboration across government, regulators, and industry, and highlights both our strengths and the areas where we must continue to build capacity and awareness. We are committed to ensuring that the Island remains a secure and responsible jurisdiction.”

The TF NRA will be accompanied by targeted outreach efforts to help the financial industry and other stakeholders understand and implement the key findings. In addition, a separate NRA specifically addressing terrorist financing risks in relation to Non-Profit Organisations (NPOs) is currently under development and will be presented for approval in due course.

By fLEXI tEAM