As the Isle of Man gears up for the vital MoneyVal evaluation visit in 12 months’ time, the scale of what is at stake has been made clear to island businesses.

MoneyVal’s inspectors are due to visit the island in October next year.

Giving an update on the preparations, head of the Financial Services Authority (FSA) Bettina Roth said grey listing would negatively impact the island’s finances and cause significant reputational damage.

Addressing an event at the Claremont Hotel organised by the Chamber of Commerce, she said one listed jurisdiction estimated a loss to its economy of £38bn, 11% of its GDP.

And she said the work involved in removing the Isle of Man from the grey list would be even more onerous, with challenging remediation targets.

‘To avoid a similar fate, it’s vital that the Isle of Man uses the next 12 months to enhance collaboration and put in place the necessary building blocks,’ she said.

She assured the audience that the Isle of Man is not aiming for a ‘gold-plated’ approach.

‘There’s no intention of using the forthcoming evaluation as a reason to go above and beyond the scope of what is required,’ she said.

‘Our ambition is to demonstrate the effectiveness of the island’s frameworks while trying to avoid adding unnecessary burden to firms.’

She said that absence of civil penalties for key individuals for a serious regulatory failing had been identified as a key weakness in the island’s framework to combat financial crime. It was an additional option already available to regulators other jurisdictions.

But some in the financial services sector have expressed deep concern.

Ms Roth said she recognised this but insisted: ‘We are most definitely not an enforcement-led regulator.’

She stressed the importance of a having a ‘consistent country narrative’ with businesses, politicians, government agencies and regulators all being on the same page.

‘A joined up national approach has been highlighted as the single biggest factor in achieving a successful outcome.

‘Of course, singing from the same hymn sheet does not rule out constructive challenge or the need to discuss difficult issues but I would respectfully suggest a MoneyVal interview is not the time to highlight disagreements or air any grievances.’

MoneyVal’s overarching goal is to ensure there is no weak link in the global fight against financial crime.

But preparations for its visit come at a time when Manx police have no fewer than 10 international money laundering investigations ongoing.

George Pearmain, who headed the delegation for Jersey’s recent MoneyVal evaluation and has been brought in as external adviser to the Manx Government, said this was not necessarily a negative.

He said: ‘In fact it can be seen in almost the opposite way, it’s showing the mechanisms in place to investigate financial crime are working effectively.

‘The way the methodology is set up it’s not designed as zero-sum game, that if you have these standards there will be no crime in your country.

‘It’s that if crime does happen, it’s able to be identified and investigated and hopefully lead to a successful prosecution and conviction.’