The Isle of Man government has cautioned the island’s extensive financial and gambling industries to be cautious of overseas criminal threats.
Criminal networks in East and Southeast Asia are of particular concern to the island’s government, which is wary that its extensive and ‘well established’ financial and gaming sectors are a target of exploitation.
The island’s geographical and constitutional links to the UK as one of the three Crown Dependencies of the British Isles, the others being Jersey and Guernsey, and the international reach of Isle of Man-based and registered businesses, further illuminate the island as a criminal target, the government believes.
Businesses based on the island are being encouraged to ensure AML and CTF processes are being upheld to a high standard. The government adds though that companies, particularly those in gambling, can expect a higher degree of regulatory scrutiny around crime prevention and safeguarding.
Jane Poole-Wilson MHK, Deputy Chief Minister and AML/CFT Lead for the Isle of Man Government, said: ”The Isle of Man Government and the Island’s authorities take the illicit actions by transnational organised criminals to exploit the Island’s business environment and immigration security extremely seriously.
“Significant and wide-reaching actions are being taken by agencies, with investment in law enforcement and investigation capability. This includes strengthening the Island’s immigration systems and processes.”
Isle of Man not alone
The Manx government is not the first institution and authoritative body to express concern regarding the international reach of East and Southeast Asian criminal networks setting up shop on the island, particularly regarding the gambling sector.
In January 2024, a United Nations (UN) crime prevention report highlighted a proliferation of unlicensed casinos and crypto exchanges in Southeast Asia, playing a critical role for regional criminal networks.
The UN asserted at the time that organised crime rings in Myanmar, Laos, Cambodia, Vietnam and Thailand were using casinos and crypto as a means of revenue generation and money laundering.
This is likely not the Isle of Man’s only concern, however. The Isle may also have been paying close attention to developments in some other notable European gaming and financial industry hotspots, namely Malta and Gibraltar.
Both Malta and Gibraltar found themselves placed on the ‘grey list’, as it is commonly known, of the Financial Action Task Force (FATF), the AML and CTF unit of the G7 group of nations.
Malta was able to leave the list in 2022 after one year, while Gibraltar spent two years on the list between 2022-2024. The latter may be particularly resonant for the Isle of Man as Gibratlar has a similar status to the island, in its case being a British Overseas Territory rather than a Crown Dependency.
Though being on the greylist does not come with any major enforcement actions, it is typically not a great look for countries and territories looking to attract overseas businesses and investment. For the Isle of Man, which relies heavily on oversea firms setting up a HQ or tax domicile on its shores, ensuring robust AML practices is good for business.
Isle of Man’s action plan
So what exactly does the Isle of Man have planned? As the government’s Poole-Wilson referenced, authorities are working to enhance inter-agency cooperation across regulation and law enforcement, with the goal of strengthening financial crime prevention.
The island’s gambling regulator, the Gambling Supervision Commission GSC), is reviewing how its frameworks and practices can be strengthened while developing further amendments to legislation and the island’s existing AML and CTF regime.
In particular, reviews are focusing on how licence applications with ‘links to East and Southeast Asia’ are assessed, and the government states that these reviews will be ‘published soon’. More scrutiny over licence applications while the reviews take place can be expected.
Lastly, the government is working on an updated National Risk Assessment (NRA), building on previous assessments in 2015 and 2020. This mirrors similar developments in Malta, which published its NRA last year, and the government has earmarked this as a ‘key tool in identifying, assessing, and understanding the money laundering and terrorist financing risks facing the Isle of Man’.
Poole-Wilson concluded: “These actions aim to ensure that any vulnerabilities are identified, and that urgent action is taken to mitigate vulnerabilities, thereby strengthening the Island’s countering financial crime regime for the future.
“We will not tolerate the use of the Island for criminal activity and will not hesitate to act to disrupt and prosecute those responsible.”
