Two government consultations could pave the way for new legislation to help combat financial crime in the island.
High on the agenda will be measures to control money laundering and funds used to finance terrorism.
The Financial Intelligence Unit Bill puts the legal framework in place for a separate Financial Intelligence Unit which will have extra information gathering powers. The unit will be distinct from the police’s Financial Crimes Unit. The international norm is for the two functions to be separated.
The island is currently preparing for an external inspection to assess how effectively it meets the latest international standards in preventing money laundering or financing of terrorism. This inspection is to be conducted next year by MONEYVAL, which is the Council of Europe’s committee of experts on anti-money laundering measures and preventing the financing of terrorism. Jersey recently set up a similar unit in preparation for its MONEYVAL assessment in January. MONEYVAL acknowledged the unit was necessary and that it would need additional intelligence gathering powers.
Part of the reasoning behind the proposal is that the separate unit could be more effectively staffed with personnel able to concentrate specifically on intelligence gathering in relation to financial crime. In addition, it would place the Isle of Man on a par with other jurisdictions which have a similar system in place, meaning it would be better able to meet international obligations.
If established, the new unit would have extra powers to gather information from third parties.
Currently the functions of the Financial Information Unit are carried out by a section within the police’s Financial Crimes Unit.
In effect, the FInancial Crimes Unit therefore deals not just with financial intelligence in relation to money laundering and financing terrorism, but also has responsibility for serious and complex fraud issues as well.
In all other countries these functions are dealt with separately. The fact that the different functions are both handled within the Financial Crimes Unit has been criticised in the past for not having a dedicated workforce concentrating solely financial intelligence.
The other proposed piece of legislation is the Terrorism and Crime (Miscellaneious Amendments) Bill, which makes various detailed and technical changes to existing money laundering and funding of terrorism legislation.
As part of its consultation process the government will be assessing public opinion on whether the proposals will give the Financial Intelligence Unit the powers it needs to gather and share information, whether or not any extra powers are needed, whether people agree there is a benefit in creating the new Financial Intelligence Unit and whether people believe the unit should be placed on a separate financial footing with its own governance arrangements.
Comments are welcomed from anyone who may be affected by the proposaled legislation, and they can submit their comments in writing to Yvette Mellor, Cabinet Office, Government Offices, Buck’s Road, Douglas, before September 18. Alternatively, comments can be emailed to Yvette.Mellor @gov.im. A summary of the responses will be published on the government’s website within three months of the closing date for the consultation.