An NRA is a systematic evaluation of the threats and vulnerabilities the Isle of Man faces in relation to financial crime, particularly ML, TF, and PF. It helps shape national strategies and how resources are allocated.

• Undertaking an NRA is a core requirement of the FATF, the international body responsible for setting and reviewing global standards for anti-money laundering and countering the financing of terrorism and the proliferation of weapons of mass destruction (AML/CFT/CPF). The FATF 40 Recommendations provide the international standards which all countries are expected to meet; it is IOM Government policy to adhere closely to these recommendations.
• A country’s understanding of risk is an essential foundation of its national AML/CFT/CPF regime and should be used to allocate resources efficiently across law enforcement, agencies and regulators, as well as by industry. Therefore, the IOM has produced a number of components to its NRA, to further enhance its understanding of the risks to which the jurisdiction may be exposed to as an IFC.

National Risk Assessments help the Isle of Man identify, understand, and mitigate the risks of money laundering, terrorist financing, and proliferation financing. They support risk-based policy-making and ensure compliance with international standards, such as those set by the Financial Action Task Force (FATF).

The FATF Recommendations are applicable to all countries, and as such the Isle of Man is part of an ongoing cycle of Mutual Evaluations undertaken in order to test compliance with the FATF Methodology. In the case of countries that are members of an FSRB, these assessments are undertaken by that FSRB, namely MONEYVAL for the Isle of Man.

NRAs are used by government agencies, regulators, law enforcement, and the private sector. They guide risk-based approaches to compliance, supervision, and enforcement, helping all stakeholders understand where the greatest threats lie and how to respond effectively.

Two NRAs have been published - one in 2015 and another in 2020. Both combined Money Laundering and Terrorist Financing and can be found here: https://www.gov.im/categories/business-and-industries/anti-money-laundering-and-countering-the-financing-of-terrorism-amlcft/

• The NRA is fundamental to protecting the Island from financial crime and is an important part of our commitment to meeting international standards.
• The assessment looks in detail at current and emerging risks and the measures in place to mitigate those risks. The findings will inform national policies and help to focus resources where they are most needed.
•  A ‘ground up’ approach is being taken to inform the new NRA, with sector and topic-based assessments helping to build an overall picture of risk.
• Conducting an NRA is a requirement of the FATF, the body that sets international standards aimed at combating ML, TF and PF. This will be the Isle of Man’s third NRA, building on the reports published in 2015 and 2020.
• The latest NRA process is part of the continual monitoring of the AML/CFT regime and will enable the Island to stay alert to emerging trends and risks, as well as combating existing threats.
• The stand-alone Terrorist Financing NRA was published in July 2025, with other reports scheduled to be issued in the months ahead.

The FATF and FSRBs assess each member’s implementation of the FATF standards on an ongoing basis. The FATF Methodology sets out the assessment process which focuses on two distinct areas: 

• Technical compliance - each assessment also looks at whether a country has all the necessary laws, regulations and legal instruments in place, in line with the technical requirements of the 40 FATF Recommendations. This legal, regulatory and operational framework forms the basis for an effective system to deprive criminals from the proceeds of their crimes and terrorists from their funding. 

Each of the 40 Recommendations will be rated one of the following:

• Compliant (C)- No shortcomings have been identified
• Largely Compliant (LC)- Only minor shortcomings have been identified
• Partially Compliant (PC)- Moderate shortcomings have been identified
• Non-compliant (NC)- Major shortcomings have been identified

• Effectiveness - each assessment will have a significant focus on effectiveness, to ensure that countries are implementing and making use of the laws, regulations and policies that are being passed. A country must demonstrate that, in the context of the risks it is exposed to, it has an effective framework to protect the financial system from abuse.

The Effectiveness assessment comprises 11 components named the Immediate Outcomes, or IOs:

With regards to the assessment of Effectiveness of the measures put in place, the assessment team will allocate one of four effectiveness ratings to each of the 11 IOs:

• High level of Effectiveness (HE)- The IO is achieved to a very large extent and minor improvements are required
• Substantial level of Effectiveness (LE)- The IO is achieved to a large extent and moderate improvements are required
• Moderate level of Effectiveness (ME) - The IO is achieved to some extent and major improvements are required; and
• Low level of Effectiveness (LE)- The IO is not achieved or is achieved to a negligible extent and fundamental improvements are required

The Isle of Man will undergo its next Mutual Evaluation in 2026 which will be carried out by a team from MONEYVAL.

• The maturity of the Island’s AML/CFT technical framework was demonstrated in the outcome of the 2016 MONEYVAL assessment. This rated the Isle of Man as compliant or largely compliant in 39 out of 40 FATF recommendations.
• Since 2016, the Island has strengthened its national response to ML, TF and PF risks, including significant investment in financial intelligence, criminal investigation, and asset recovery.
•  Data collection has also improved through AML/CFT returns and financial flow information from deposit takers.