The risk of money laundering in the island is ’medium high’, a Cabinet Office report concludes.

A second National Risk Assessment (NRA) of money laundering and terrorism financing has been published, updating the first one which was completed in 2015.

Undertaking an NRA is a requirement of the Financial Action Task Force, the body which sets international standards on tackling money laundering and terrorist financing.

The report, carried out with cross-government participation and input from the private sector, identifies risks to the Isle of Man at national level and for each financial sector.

Its 2020 assessment found that the overall level of money laundering risk remains medium high while the risk of terrorism financing is medium low.

The report notes: ’The main threats to the Isle of Man arise from international money laundering, where the wide range of financial and non-financial services available may be used to launder the proceeds derived from foreign predicate offending.

’The types of services provided may be used to conceal the proceeds of crime or to conceal or disguise the origins of those proceeds, through international transfers of funds and the use of complex corporate structures.

’Criminals may also seek to use jurisdictions which are stable and which have an established rule of law in order to protect their assets; this presents a further risk for the Isle of Man.’

A key finding of the NRA conducted in 2015 was that the island needed to improve in areas such as financial intelligence, financial crime investigation and asset recovery.

These findings were echoed in the conclusions of an evaluation by MoneyVal, the Council of Europe anti-money laundering monitoring body, in 2016.

Since then MoneyVal has said the Isle of Man has made progress in complying with international standards.

But the island remains in ’enhanced follow-up’ - and will have to report back later this year on what further progress it has made.

Chief Minister Howard Quayle MHK welcomed the publication of the 2020 National Risk Assessment.

He said: ’Money laundering and terrorist financing are global threats. All countries have a responsibility to identify the risks that are present and to ensure that they provide a robust response.

’The government is determined to protect the integrity and reputation of the island as a successful centre for international business and finance.

’Meeting international commitments regarding money laundering and terrorist financing has been a key priority and will remain so.’