Isle of Man Financial Services Authority publishes phase 2 sanctions thematic inspection report on AML/CFT Code 2019 compliance

The Isle of Man Financial Services Authority has published the results of phase 2 of its sanctions thematic review, based on onsite inspections assessing compliance with the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 as it relates to sanctions. The report sets out examples of good practice and identifies areas where firms should strengthen their sanctions controls. Across inspected firms, documented procedures and controls to identify, manage and mitigate sanctions risk were in place, and most firms could evidence escalation processes and transaction monitoring. The inspections also found scope for improvement in documenting decision-making, strengthening customer due diligence, using screening tools more effectively, and embedding sanctions risk more fully within firms’ Business Risk Assessments. Findings build on phase 1 data gathered via a questionnaire sent to all supervised entities and will feed into the Island’s National Risk Assessment and the Authority’s supervisory risk picture. The Authority encouraged firms across the Island’s finance industry to read the phase 2 report and consider any actions needed to ensure sanctions compliance frameworks are effective, up to date and properly documented.