The government in the Isle of Man has outlined an increase in the overall money laundering risk, as part of the National Financial Crime Strategy for 2024-2026.
Within the strategy is the Money Laundering Risk Assessment for the island’s overall banking sector, which has increased from medium to medium-high, with specific relevant threats to the gambling industry.
The Isle of Man is a British crown dependency with self-governing status, located in the Irish Sea, between England and Ireland.
The Money Laundering Risk Assessment takes a deep dive into the relevant threats and upcoming risks that need to be monitored for the integrity of the banking system, with warnings issued to both banking and gambling operators.
In July this year, the Isle of Man’s online gambling industry was flagged as having a medium risk of terrorist financing.
It has been set out that the following key threats need to be negated:
- Cyber-enabled crime
- Growing use of virtual currency, particularly USDT
- Rise in activity from organized crime groups in the UK and Asia
Most of the concern arises from these strands, but further warnings were made around indications of human trafficking and the use of illicit funds disguised as legitimate business proceeds.
On the former, many individuals could be registered at the same address, which should be a red flag for banking and gambling organizations, while warnings on the latter were outlined by the Gambling Supervision Commission.
The signs can include:
- Noticeably high transaction volumes for fledgling business entities
- Layered cross-border company ownership structures
- Links to high-risk jurisdictions
GSC aims to strengthen resolve of Isle of Man businesses against financial crime
It was detailed by the Isle of Man Money Laundering Risk Assessment that banks across the sector take in more than £40 billion ($52.1 billion), while presiding over almost £80 billion in payments each year.
Those figures represent around 7.6% of the national income on the island.
The overall view on money laundering has been impacted by more cross-border activity, resulting in the threat level increasing from medium to medium-high.
To strengthen the oversight and due diligence framework, the GSC emphasized the need to:
- Conduct enhanced due diligence (EDD) for high-risk clients and politically exposed persons (PEPs)
- Establish clear sources of wealth and funds
- Maintain robust ongoing monitoring
The report outlined further weaknesses in ongoing monitoring systems, with not enough being done on changes to client banking activity or transaction patterns.
The GSC wants to improve the overall health and resolve of the wider financial infrastructure, working together with government agencies, banking institutions and gambling providers to ensure that there is greater consistency and compliance with the Isle of Man’s strategy to combat financial crime.
Image credit: rcxyz/Unsplash
The post Isle of Man warns of rising money laundering risks impacting gambling sector appeared first on ReadWrite.
