civil penalty

On 7 January 2022 the IOMFSA issued a £353,320 civil penalty discounted by 30% to £247,324 to a Class 1 deposit taker for ‘enabling the transfer of funds [in breach of the terms of a Restraint Order issued by the Isle of Man Courts pursuant to the Proceeds of Crime Act 2008] between the Restrained Accounts within [the bank]; and processing an instruction from the client for further transfer of funds out of the jurisdiction of the Isle of Man, albeit to another [..] group entity.’

This issue was identified by the bank and reported to the Authority upon discovery.

Learning points noted by the IOMFSA are:

  • All firms undertaking business in the regulated sector have an obligation to conduct their affairs in a manner that adequately mitigates the risks faced by them.
  • Any weaknesses in the design, implementation and operation of AML/CFT controls, can expose a licenceholder to being exploited by persons who may wish to launder money or finance terrorism appropriate to the risks. The NRA notes that the AML/CFT risks faced by banks are assessed as Medium High. IOMFSA expect banks to have and to maintain a very robust control environment at all times.
  • The design and operation of any effective suite of AML/CFT controls, particularly any systems-driven solution, needs to appropriately reflect the risk environment faced by the particular business in terms of preventing and detecting breaches of the Island’s regulatory framework.

Find the IOMFSA’s press release here.