The Isle of Man Financial Services Authority has published the final report from its proliferation financing thematic review, finding that most firms have strengthened their understanding, procedures and controls since the review began in 2024. All seven firms inspected had documented proliferation financing controls and related staff training. Identified contraventions were mainly isolated, customer-specific matters rather than material or systemic deficiencies. The report builds on the Island’s first standalone proliferation financing national risk assessment, which rated residual risk as medium low but highlighted indirect exposure through cross-border finance and complex structures. Responses from 579 firms to the 2026 follow-up questionnaire showed broader recognition of proliferation financing as a distinct risk. The proportion of firms referring specifically to it in their business risk assessments rose to 77% from 42% in 2024, while those providing staff training increased to 88% from 66%. Inspection weaknesses centered on customer risk assessments, sanctions screening and aspects of customer due diligence and enhanced due diligence. The authority expects firms to assess proliferation financing with the same rigor applied to money laundering and terrorist financing, including through current, effective and properly documented controls. The findings will inform future guidance and outreach. Firms should use the report to review their risk assessments, screening, monitoring, reporting procedures and training, and implement relevant observations and good practices under the Anti-Money Laundering and Countering the Financing of Terrorism Code 2019.

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