Isle of Man firms 'should not struggle' to identify Russia links

Isle of Man firms should not struggle to identify sanctioned Russian individuals and firms, the Financial Services Authority (FSA) has said.

Economic penalties imposed by the UK in response to the invasion of Ukraine are automatically applied to Manx finance companies.

Companies are required to report any breaches or links to Manx authorities.

The FSA said beneficial ownership rules were in place so that firms know who their clients are.

Ian Spence, who is the regulator's head of anti-money laundering and countering the financing of terror, said all island firms were required to go through their client lists to find any sanctioned entities and report them to the Financial Intelligence Unit (FIU).

Companies have disclosed more than 51 suspicious activity reports relating to the sanctions since the invasion in February, but no breaches had yet been found, the FIU said.

The unit confirmed some had been referred to it over suspected breaches of sanctions or money laundering, with a number being "explored further".

Although not responsible for enforcing the sanctions, the FSA as regulator has called on companies to follow the rules, and previously warned there had "never been a more important time" for compliance officers.

Mr Spence said existing laws meant finance firms should already have "worked their way down" through ownership structures to identify individuals who are the ultimate beneficiaries.

"Sanctions create a trigger point" for checks to be done, he said, adding that he hoped they had "focused the mind" of any companies that were "becoming a bit lax or becoming relaxed over controls".

He said, while some firms "may want to go and refresh information and identity checks" following the implementation of penalties on Russian firms and individuals, "they should not be struggling" to identify any links.

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