The overall risk to the Isle of Man from international money laundering remains ‘medium high’.
This risk remains unchanged since 2020.
An updated National Risk Assessment of Money Laundering, published this week, states that while threats have intensified, national controls have strengthened accordingly.
Its publication comes as preparations continue in the island for the crucial MoneyVal evaluation later this year.
Cyber fraud, investment scams, romance fraud and large-scale international schemes remain the main driver of money laundering, according to the update.
Transnational organised crime, including from Asian and UK-linked organised crime groups, has increased, impacting the online gambling market, immigration systems and virtual asset activity.
But the risk of domestic money laundering remains ‘medium low’, driven by drug importation, labour exploitation and low-value fraud.
Those sectors with the greatest residual money laundering risk are banking, online gambling and trust and corporate service providers.
Home Affairs and Justice Minister Jane Poole-Wilson described the publication of the new risk assessment as a ‘big milestone’.
Jilly Christian, head of the AML policy office, said that while the overall risk remains assessed as medium high, the threat level had ‘definitely gone up’.
‘We are facing increasing levels of threat but fortunately our controls have also improved,’ she said.
Significant improvements since the last national risk assessment in 2020 include strengthened border security and immigration controls, enhanced supervision by regulators and a robust beneficial ownership regime.
But vulnerabilities persist including the emerging risks from artificial intelligence deep fakes, virtual assets and alternative payment methods such as blockchain being increasingly used by criminals to move dirty money around the world.
Financial crime risk assessment specialist Karen Ramsay said: ‘Just because the headline is “medium high” does not mean there hasn’t been a change - there has been a change. The threat picture has definitely increased.’
The Manx government has also published a series of sectoral risk assessment, the latest one being for trust and corporate service providers.
This confirms that the money laundering risk for TCSPs also remains medium high, reflecting the sector’s international client base and its use of complex structures.
The Justice Minister said there were two elements to the risk assessment - the threat landscape and our vulnerability to that.
She said: ‘There has been an increasingly sophisticated and rapidly evolving threat landscape but also significant investment on the island so our position to tackle that has risen exponentially.
‘This is not a static thing - we will have to keep evolving our own controls and understand how well they are operating.
‘The more we understand, the more controls we put in place, the more we make the Isle of Man a less attractive place for sophisticated transnational crime to target.’
Dan Davies, chief officer for the Department of Home Affairs, said it was important to distinguish between threat and risk.