Read our Digital & Print Editions
And support our mission to provide fearless stories about and outside the media system
SUBSCRIBE TODAY
Impending spot checks to see how well e-gaming firms and online casinos are deploying measures against financial crimes and terrorism funding have left the Crown Dependency of the Isle of Man badly exposed, a leading authority on Anti Money Laundering (AML), has told Byline Times.
“This is where the Isle of Man definitely has a high risk of being grey-listed,” said Dr Ilaria Zavoli, a senior researcher at the University of Leeds, adding: “What I see is not positive.”
Grey listing is an international designation for jurisdictions with strategic financial-crime and terrorism-funding deficiencies and can trigger rapid ‘de-risking’ by investors.
The warning comes ahead of a critical inspection of the Irish Sea island’s regulatory health next year by Moneyval, the European partner to the Financial Action Task Force (FATF); inter-governmental bodies which combat the financing of terrorism and global cybercrime worth $15Tn a year – a figure set to reach 20Tn in 2026, making it the second biggest economy behind China.
Inspectors are expecting a series of legislative improvements at the Crown Dependency – first called for in 2016 – alongside effective implementation of financial crime protections within the 148 companies it currently regulates.
EXCLUSIVE
Inside the Silicon Valley Plot to Annex Venezuela for Oil That America Can’t Afford
Donald Trump’s decapitation of the Venezuelan Government opens the door to his Big Tech oligarch supporters’ dreams of creating an anti-democratic ‘Network State’ in the country, reports Nafeez Ahmed
Nafeez Ahmed
Dr Zavoli, a lawyer whose academic work informs UK AML policy on property and construction, said: “The Isle of Man Government must show both that it has the tools to fight money laundering and economic crime and that it’s using them properly.
“The inspectors will go into businesses directly and ask them, for example, how their suspicious activity reports and anti-money laundering checks work in daily practice?
“They will not be fooled by fine words and box ticking. This will be the main channel of risk for grey-listing.”
Finding itself in the company of Botswana, Albania and Lebanon on an FATF-body grey list could cost the Isle of Man 11% of its £6bn economy, according to Government predictions.
At £660m a year, it would take just three years to equal the island’s entire circa-£2bn cash reserves, while posing real risk to its prized AA3 credit rating.
The Isle of Man financial services sector has suffered a string of damaging headlines in the last 18 months. Last year a United Nations Office on Drugs and Crime (UNODC) report called the island a “transnational laundromat” for Asian crime groups exploiting “under-regulated” online gambling platforms, while Manx structures have also been implicated in so-called “pig-butchering” crypto scams – long-con investment frauds linked to human-trafficking.
Last month, a Financial Times investigation raised serious questions about the due diligence carried out by the Isle of Man Government in relation to King Gaming, a company under investigation over “huge” allegations of fraud and international money laundering.
Further, day-to-day governance on the island will soon be falling under the Moneyval spotlight. These include a £90m court case featuring allegations, denied by the Manx Department of Infrastructure and its Treasury, of unlawful interference and misfeasance in public office over the award of an infrastructure contract, a saga that has left Douglas locals exasperated and missing a new bus station, shops, and homes first promised more than a decade ago.
“Moneyval looks at all aspects of the way the island is run when it makes its grey listing decisions,” says Dr Zavoli. “Definitely they will care about this. If there is any suggestion of corruption in public offices that obviously has a reputational threat to th…