THE Isle of Man Government has today launched a new public consultation with a view to strengthening the Island’s defences against money laundering and other financial crime.
New proposals are designed to close possible “weak links in the chain of accountability”. The issue has been raided by the International Monetary Fund (IMF).
Treasury Minister Anne Craine MHK said, “This perception creates a reputational risk for the Isle of Man.”
The Treasury is proposing that a requirement is introduced, similar to that already in operation in Guernsey, for all companies under the 1931 Companies Act be required to appoint a local resident agent.
In the case of locally owned companies this could simply mean nominating an existing officer or shareholder of the company as the resident agent, at no extra cost to the business.
At present all companies registered under the 2006 Companies Act must have a local resident agent to identify the beneficial ownership of the company if this is requested by the regulatory authorities in the course of enquiries.
Companies incorporated under the 1931 Companies Act are not required to have such an agent, although many of them are in fact administered by licensed Corporate Service Providers which effectively act as registered agents.
In today’s statement, the Treasury Minister said, “In the case of companies administered by licensed Corporate Service Providers this would simply amount to the Corporate Service Provider acknowledging that they provide services to those companies. As before, there would be no extra costs incurred by the company or the Corporate Service Provider.”
She added, “The current difference in requirements between the 2006 and 1931 Acts creates an inconsistency in the Island’s approach to access to information about the beneficial ownership of companies.
“The discrepancy means there is a perception, in the case of 1931 Act incorporations, that some companies are weak links in the chain of accountability. This perception creates a reputational risk for the Isle of Man.
“This is an issue that has been raised by the International Monetary Fund in its assessment of the Island’s defences against money laundering and other financial crime. It is clearly in the best interests of the Island’s economy and our reputation internationally that we maintain high regulatory standards as recognised by bodies such as the IMF.”
The Minister added, “To be consistent the resident agent requirement would apply to all Isle of Man companies. For locally owned companies, and those already administered by licensed CSPs, compliance should be straightforward and should not create any additional burden.”
“The purpose of the forthcoming consultation, as with all Government consultations, is to gain feedback on the proposal and to gather views to be taken into account in deciding how to progress the matter.”
The consultation paper can be found at:-