The Isle of Man Financial Services Authority has published its review findings on foreign Politically Exposed Persons (PEPs), a major international crime threat to the Island’s reputation as a well-regulated jurisdiction. The thematic review, conducted between 2021 and 2023, assessed the risks PEPs posed to the Isle of Man business sector. PEPs are individuals who may present higher risks in money laundering, terrorist financing, and proliferation financing due to their potential exposure to bribery or corruption.
The review evaluated firms’ measures and controls to mitigate PEP-related risks and protect businesses from criminal abuse. The findings, available online, will inform the Authority’s risk assessment and the Island’s National Risk Assessment. The review involved data collection, analysis of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) returns, a questionnaire, and onsite inspections across various sectors.
Inspectors found some firms had a strong understanding of ML/FT risks, backed by good systems and controls, clear procedures, experienced staff, and documented PEP assessments. However, contraventions of the AML/CFT Code were identified in several inspected firms, leading to necessary remedial action. Cases with significant contraventions were referred to the Authority’s Enforcement Division.
The PEP project supports the Isle of Man’s commitment to meeting international standards in ML/TF and combating bribery and corruption involving PEPs. Firms are encouraged to review the report and ensure their compliance regimes for foreign PEPs are effective, up-to-date, and documented.
Ashley Whyte, Senior Manager of AML/CFT Supervision, emphasized the importance of robust controls and skilled staff in dealing with PEPs. She hopes the PEP report provides valuable learning points and good practice suggestions for firms.
A live webinar discussing the PEP report and allowing firms to ask questions is scheduled for 10 am on Wednesday 17 May 2023. Further information will be available on the Authority’s website and social media channels.