The Isle of Man Financial Services Authority has published the final report from its sanctions thematic project, covering risk based onsite inspections and a questionnaire of regulated and registered firms. Compliance has improved compared with the earlier phases conducted in 2024 and 2025, and the inspections found no systemic issues. However, selected firms had isolated procedural contraventions involving the operation of controls, customer risk assessments and links between business and technology risk assessments. Half of the firms inspected had isolated failures to follow documented procedures or evidence periodic sanctions screening, while 33% had not adequately reflected business risk assessment findings in their technology risk assessments. Customer risk assessments generated the most contraventions, including failures to review them regularly or complete them before establishing a business relationship. No contraventions were found in sanctions checks for new business or in governance arrangements for monitoring and testing compliance. Among 580 questionnaire respondents, the number without documented sanctions procedures fell to 11 from 25 in 2024, while the number not screening all persons required by the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019 declined to 10 from 23. Use of automated screening and official sanctions update feeds also increased, although firms reporting no controls to notify compliance or control owners of screening failures rose to 115 from 105. Firms should review the report and ensure controls are implemented in practice, screening systems are tested, discounted matches are documented and sanctions training and risk assessments remain current and proportionate.
2026-09-16Isle of Man Financial Services Authority
Isle of Man Financial Services Authority finds improving sanctions compliance but identifies isolated control failures
The Isle of Man Financial Services Authority found improving sanctions compliance and no systemic failings, but identified isolated weaknesses in screening evidence, customer risk assessments and the operation of documented controls. Questionnaire results showed fewer firms lacking required procedures or screening, although 115 respondents reported no controls for notifying relevant functions of screening failures. Firms should test and document their sanctions controls and keep risk assessments and training current.