The Isle of Man is preparing to update its financial crime laws, taking a significant step toward aligning with evolving global standards and enhancing its ability to counter illicit financial activity in the Crown Dependency.
During next week’s sitting of the Tynwald [Parliament], lawmakers will consider a proposal to expand the legal definition of “financial crime” as set out in the Financial Intelligence Unit Act 2016. The proposed changes, detailed in the Financial Intelligence (Definition of Financial Crime) Order 2025 [SD2025/0081], aim to bring the Island’s legal framework into closer alignment with international expectations and provide the Financial Intelligence Unit (FIU) with a stronger mandate.
Expanding the definition of financial crime
Under current legislation, the FIU’s authority to gather information and take enforcement actions is limited to crimes explicitly defined in the Act. However, its remit has evolved in recent years to include new areas such as:
- Bribery
- Corruption
- Breach of financial sanctions
These offence types are not currently included in the statutory definition of “financial crime.” As a result, the FIU must rely on indirect provisions, such as cooperating with law enforcement, to address these issues. The proposed amendment will formally incorporate these crimes into the definition, strengthening the FIU’s ability to act decisively and independently.
In addition, the Order proposes separating the offences of terrorist financing and proliferation financing into distinct categories. This reflects how such crimes are treated operationally and aligns with international legislative trends, particularly those established by the Financial Action Task Force (FATF).
A broader reform effort
This legislative update is part of a broader strategy to modernise the Isle of Man’s approach to anti-money laundering (AML) and countering the financing of terrorism (CFT). The Island is in the midst of completing an updated National Risk Assessment (NRA) which requires a comprehensive review of threats related to money laundering, terrorist financing, and proliferation financing.
Originally scheduled for earlier publication, key elements of the NRA are now expected later than planned due to the complexity of the data analysis. The updated NRA, the third since 2015, is a critical preparatory step ahead of the MONEYVAL evaluation in October 2026. It is also expected to support local businesses in strengthening their compliance frameworks.
Future-proofing compliance
Alongside the expanded definition of financial crime, the Department of Home Affairs has also launched a consultation to modernise the Proceeds of Crime Act 2008, reflecting technological advancements such as crypto and digital assets. The draft legislative package includes:
- Draft Proceeds of Crime (Miscellaneous Amendments) Bill 2025
- Draft Proceeds of Crime (Amendment) (Forfeiture of Money held in Bank and Building Society Accounts) Bill 2025
- Draft Proceeds of Crime (Amendment) (Unexplained Wealth Orders) Bill 2025
Key proposed reforms include:
- Mandatory reporting of money laundering suspicions to the FIU
- Extending investigatory powers to civilian investigators
- Increasing the transaction exemption threshold from £250 to £1,000
- Shortening the confiscation order timeframe after non-surrender of assets
The proposed Financial Intelligence Order 2025 will require formal approval by Tynwald before coming into effect. If passed, entities which are based in or work closely with the Isle of Man will need to ensure their policies, training and procedures are up to date and aligned with the new legislation.
