The Authority’s Designated Businesses Registration Policy (“the Registration Policy") sets out the criteria that applicants must satisfy to be successful in the registration of their business. If it is determined an application under the Act must be submitted please ensure you are familiar with the Registration Policy.
In particular a business applying to operate as a convertible virtual currency (“CVC”) business must be able to demonstrate compliance with the real presence requirements as set out in section 4.1 of the Registration Policy:
a) the CVC business must have (and continue to have) at least 2 IoM resident directors; and
b) management and control of the CVC business must be in the Island.
This is because of the limitation of the Authority’s ability to oversee CVC businesses which lacks substance or real presence on the Island and such a characteristic is considered to pose an unacceptably high risk of money laundering and terrorist financing.
Fit and proper test for specified person
The Authority will not register a business where it determines that the applicant, including the persons associated with it, are not fit and proper to undertake the designated business activities.
The fit and proper test is both an initial test at the time of registration and a continuing test in relation to the compliance with AML/CFT legislation of designated business.
Under Section 9 of the Act. In assessing the fitness and propriety of an applicant, the Authority would take into consideration whether the applicant:
- has been convicted of an offence —
- under AML/CFT legislation;
- under the law of a country or territory outside the Island if the conduct giving rise to the offence would constitute an offence under AML/CFT legislation if it had occurred in the Island;
- involving dishonesty (whether under the law of the Island or elsewhere);
- under a relevant Act (as defined in the Act); or
- of perjury or conspiracy to pervert the course of justice (whether under the law of the Island or elsewhere);
- is or has been the subject of any action with respect to any breach of a relevant Act (as defined in the Act) or AML/CFT legislation;
- has knowingly or recklessly provided misleading or false information in the application for registration; or
- is otherwise considered by the Authority not to be fit and proper for reasons related to the risk of money laundering or the financing of terrorism.
Fit and proper test for specific persons
Designated Businesses must take reasonable measures to satisfy themselves that Specified Persons associated with the business are fit and proper. Below are some suggested methods to demonstrate that you are satisfied with the fitness and propriety of your Specified Persons, it is important to document the relevant approach taken by the business:
- Incorporated firms may wish to consider undertaking Disclosure Barring Service Checks, Basic Checks or Access NI Checks for Specified Persons, alternatively the business can contact the Isle of Man Vetting Bureau for advice – these checks will provide a varying amount of detail relating to an individual’s criminal background. To assess which check is the right one for your business please visit the relevant websites for more information; or
- If a Designated Business is satisfied that the Specified Person is fit and proper and one of the suggested checks above does not add value, then the business should set out any reasonable steps taken to demonstrate that the Specified Person is fit and proper.