Isle of Man Brings New Risk-Based Terrorist-Financing Code for Non-Profits Into Force

The Isle of Man’s new Specified Non-Profit Organisations (Countering the Financing of Terrorism) Code 2026 came into operation on 1 September 2026, replacing the 2019 framework for specified non-profit organisations carrying on defined higher-risk activities.

The Code, Statutory Document No. 2026/0146, was made by the Department of Home Affairs under the Proceeds of Crime Act 2008 and the Terrorism and Other Crime (Financial Restrictions) Act 2014. It applies to specified non-profit organisations, or SNPOs, that carry on “specified activity”, including disbursing funds to specified relationships in or from higher-risk jurisdictions, or routing funds through another jurisdiction for onward remittance to beneficiaries in a higher-risk jurisdiction where the onward-remittance decision is made in the Isle of Man.

Risk assessment, relationship checks and enhanced measures

SNPOs must establish and maintain documented procedures and controls designed to prevent their activities and relationships from being used for terrorist financing, including reasonable measures to determine whether specified relations appear on sanctions lists. Those controls must reflect materiality and terrorist-financing risk, be approved by senior management and remain the responsibility of the SNPO even where functions are outsourced.

The Code requires a documented specified-activity risk assessment as soon as reasonably practicable after an organisation begins specified activity or registers as an SNPO, whichever is earlier. The assessment must be kept under review and consider factors such as the nature and scale of the activity, relevant findings from the Isle of Man’s National Risk Assessment, jurisdictions involved, the profile and activities of specified relations, diversion risk and existing CFT controls.

Before entering into a specified relationship, and on an ongoing basis, an SNPO must obtain a reasonable understanding of the relationship’s nature and purpose, the identity, credentials and good standing of relevant parties, the ultimate destination of funds and, where appropriate, the source of funds. Enhanced measures are required where the relationship is assessed as higher risk, where unusual activity is detected, or where suspicious activity arises unless further enquiries would create a tipping-off risk.

Higher-risk indicators expressly include relationships connected to jurisdictions on the Isle of Man’s List A, relevant CFT warnings issued by competent authorities, exposure to List B jurisdictions, transaction and funding characteristics, proximity to known or suspected terrorist-financing sources, politically exposed persons and the organisational structure of specified relations.

Ongoing monitoring and reporting

SNPOs must conduct effective risk-based ongoing monitoring, keep relationship information current, scrutinise transactions, actions and behaviours against their understanding of the relationship and monitor sanctions-list exposure. If unusual activity is identified, the organisation must examine it, apply enhanced measures and consider whether there are reasonable grounds to know or suspect terrorist financing.

Where suspicious activity gives rise to knowledge, suspicion or reasonable grounds for suspicion of terrorist financing, an external disclosure must be made to the Isle of Man Financial Intelligence Unit as soon as practicable. SNPOs must also maintain a separate register of terrorist-financing enquiries from competent authorities, provide at least annual CFT training to relevant personnel, and retain records sufficient to reconstruct transactions and demonstrate compliance.

Final version changed after consultation

The Financial Services Authority said consultation feedback resulted in amendments to the final Code. Most notably, a proposed change to the definition of “specified non-profit organisation” was not taken forward at this stage. The Authority said the reform is intended to make CFT obligations more practical and risk-based while aligning the Island’s framework with FATF Recommendation 8 ahead of its 2026 MONEYVAL mutual evaluation.

The Code is already in force from 1 September, but remains subject to completion of the Tynwald negative procedure in November 2026.