ISLE OF MAN: LAW OF OFFSHORE

On this Page:

- ISLE OF MAN TABLE OF STATUTES
- ISLE OF MAN TRUST LAW
- ISLE OF MAN BANKING LAW
- ISLE OF MAN INVESTMENT MANAGEMENT LAW
- ISLE OF MAN BETTING AND GAMING LAW
- ISLE OF MAN INTERNATIONAL AGREEMENTS

Isle of Man Table of Statutes

This is a non-exhaustive list of the main Isle of Man statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute or the legal regime it forms part of.

Advocates Act 1995
Banking Act 1998
Banking Business Regulations 1991
Banking (General Practice) Regulatory Code 2005
Collective Investment Schemes (Compensation) Regulations 1988
Companies Act 1931
Companies Act 2006
Companies, etc. (Amendment) Act 2003
Corporate Service Providers Act 2000
Employment Act 1991
Financial Supervision Act 1988
Financial Supervision (Restricted Schemes) Regulations 1990
Income Tax (Exempt Companies) Act 1984
Income Tax (Instalment Payments) Act 1974
Income Tax Act 1970
Insurance (Limited Partnership) Regulations 2004
International Business Act 1994
Investment Business Act 1991
Investment Business Order 1991
Investment Business Order 2004
Limited Liability company Act 1996
Merchant Shipping (Registration) Act 1984
On-Line Gambling Regulation Act 2001
Partnership Act 1909
Partnership Act 1890 (UK)
Perpetuities and Accumulations Act 1968
Protected Cell Companies (Collective Investment Schemes) Regulations 2004
Purpose Trusts Act 1996
Recognition of Trusts Act 1988
Registration of Business Names Acts 1918 and 1954
Retirement Benefits Schemes Act 2000
Retirement Benefits Schemes (International Schemes) Regulations 2001
Trade Unions Act 1991
Trustee Act 1961
Trusts Act 1995
Variation of Trusts Act 1961

The Companies, etc. (Amendment) Act 2003 came into partial effect in December, 2003, allowing unlisted companies to re-domicile in and out of the Isle of Man. Whilst companies conducting licensable business, e.g. banking, investment, insurance or corporate service provider business, will be subject to additional regulatory approvals, they will also be able to re-domicile should they so wish.

In addition, the Act ushered in a number of other provisions including: registration of prospectuses; the obligation to display a company’s name outside its premises; and procedures relating to a company’s ability to dispense with compliance with certain provisions of the Companies Acts. A right of appeal against a decision of the Commission to refuse to register documents under the Business Names, Industrial and Building Societies and Limited Liability Companies Acts is also introduced.

Other provisions facilitate the electronic filing of documents following the introduction of the FSC’s Online Search Facility. In addition, holders of corporate service providers licenses and their key staff automatically qualify to act as secretaries of exempt companies and international companies. Other provisions correct anomalies and make minor amendments to the Companies Acts 1931 – 1993 and related legislation.

Also, with effect from 1 April 2004, no new bearer shares may be issued by Isle of Man companies and the rights relating to existing bearer shares may not be exercised until the shares are registered.

In June, 2004, the Isle of Man Treasury confirmed that changes would be made to the structure of the Island’s Financial Supervisory Commission, including the replacement of a political figure as chairman of the FSC, which would bring the Isle of Man into line with other offshore jurisdictions and with the conclusions of the 1998 Edwards report on the British dependent territories.

In June, 2006, the FSC issued a second consultation paper outlining initial proposals for regulated activities, exclusions and exemptions which will come into force under proposed new financial services regulatory legislation.

According to John Aspden, Chief Executive of the IoM FSC, the consultation will give the jurisdiction's financial services community the opportunity to identify areas where further legislative amendments are necessary to improve the current framework.

“This consultation primarily consolidates the provisions contained in existing legislation," Mr Aspden explained.

"However, the Commission anticipates that licenceholders and their advisers, who have first-hand knowledge of the changes occurring in their sphere of expertise, may identify areas where further amendment would benefit the industry," he added.

The draft Regulated Activities Order consolidates the activities currently encompassed by the Banking Act 1998, Investment Business Acts 1991 – 93, Fiduciary Services Acts 2000 and 2005 and Building Societies Act 1986, as amended, as well as incorporating certain aspects of the Financial Services Act 1988 relating to the managers and trustees of collective investment schemes.

In addition, the Order includes a number of exclusions (activities which fall outside the scope of the legislation) and definitions of specific terms used within the Order.

The draft Financial Services (Exemption) Regulations consolidate the existing exemptions granted under the Banking Act 1998, Investment Business Acts 1991 – 93 and Fiduciary Services Acts 2000 and 2005, with certain outdated exemptions being removed.

To assist licenceholders and other interested parties in reviewing this draft secondary legislation, the Commission has prepared a RoadMap showing the destination of current provisions in the draft new legislation, detailing any changes which are proposed and providing a brief rationale for the change, and the impact to industry that is anticipated as a result of such change.

"This consultation provides an opportunity to embrace developments in the finance sector and to ensure that its needs are met," the FSC stated.

"Suggestions for the modernisation of the existing provisions or proposed new activities will be welcomed from industry to ensure that a meaningful and workable framework is developed," the regulator added.

Mr Aspden said that the proposals will be developed both through the consultative process, and in dialogue with the Legislative Liaison Group.

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Isle of Man Trust Law

The Isle of Man law of trusts is based on English law and is to be found in the following acts:

In addition, being a common law jurisdiction, there is a considerable amount of case law (mainly English) which is persuasive authority for the Manx courts. The distinctions between English law and Manx trust law arise principally from the fact that the Isle of Man has not adopted certain provisions of English trust law, for example, those relating to restrictions on accumulation of income.

Appeal from the Isle of Man courts is to the Privy Council in London.

Trusts do not need to be registered unless they involve real estate on the island, when settlements inter vivos must be registered. However, Unit Trusts (Collective Investment Schemes) are subject to various special requirements under the Financial Supervision Act 1988. There is no stamp duty.

There are no statutory accounting or auditing requirements and there is no need to file tax returns. It is possible to obtain an advance clearance from the relevant registry based on a draft trust deed so that the identity of the settlor and the beneficiaries can be kept totally confidential.

The maximum perpetuity for Manx trusts is 80 years. There are no provisions for non-recognition of foreign judgements; asset protection trusts are not available.

Recent legislation in the form of the Trusts Act 1995 has secured the position of trusts established in the Isle of Man in the face of challenges in the applicable governing law by other jurisdictions, particularly in the area of 'forced heirship'.

Trustees are not licensed or supervised by the Financial Supervision Commission, unless the fiduciary carries on business in investment, banking or insurance, in which case licences are required under those headings. Where this is the case the Financial Supervision Commission (1-4 Goldie Terrace, Upper Church Street, Douglas, Isle of Man 1M99 1DT) acts as the statutory regulator.

As in other jurisdictions whose trust law follows the English pattern, a beneficiary of the trust may apply to the court to stop a trustee from dealing with trust assets in an unauthorised manner. Loss as a result of an authorised conduct will result in the trustee being responsible for making the loss good. The asset value of the trustee is therefore an important consideration.

Where a breach of trust is committed by a corporate trustee, every person who at the time of breach was a director of the trustee may be deemed, in certain circumstances, to be guarantor of the trustee (ie personally liable) in respect of damages awarded by the court. Principles of constructive trusteeship also apply.

For the taxation of trusts in the Isle of Man see Offshore Tax Regimes.

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Isle of Man Banking Law

Banking is regulated by the Financial Supervision Commission under the Banking Act 1998 which governs licensing of banks and inspection of bank records as well as the control of advertising and other activities.

Banking business is defined in Section 1(1) of the Banking Act 1998, as amended, as the carrying on of either of the following: the receipt of deposits; or the payment and collection of cheques. Those carrying on activities defined as banking business require a licence from the Commission.

Where it appears to the Commission that the business being carried on is similar in character to a banking business the Commission has the power under Section 1(3) of the Act to deem the activity to be banking business, and therefore licensable. To accommodate those whose business may technically fall within the definition of banking business, as defined in Section 1(1) of the Act, but in the Commission's opinion is not banking business, the Commission also has the power under Section 1(3) of the Act to deem an activity not to be banking business.

An unrestricted banking licence permits a bank to conduct a full range of banking business with customers both in the Isle of Man and elsewhere. The licenceholder must have a real presence on the Isle of Man. This means that it must satisfy the Commission that it has, on the Isle of Man, management and staff, discrete and secure premises, and adequate systems and resources to conduct banking business.

A Managed Bank employs the services of another licensed bank in the Isle of Man, the "Approved Manager", to provide the day to day management and administrative functions to it. The Managed Bank may not employ any staff in the Island without the consent of the Commission; and it must operate from the premises of the "Approved Manager".

The licensing policy that the Commission adopts for the banks is based upon the fact that the Island has no lender of last resort and is too small to shoulder high risk, or start-up, operations. Thus, licences are only issued to subsidiaries, or branches, of existing banks licensed in jurisdictions which subscribe to the international concordat on banking supervision. Applicants must have an established track record of at least five years' profitable operation and the ownership and management approved. All beneficial interests of 5% or more must be disclosed. In addition, the Commission requires the written consent of the licensing and supervisory authority from the bank's own jurisdiction.

Banks are licensed either as domestic or offshore institutions. Domestic licenses are only issued to subsidiaries, or branches, of existing banks licensed in jurisdictions which are considered by the Commission to exercise proper licensing and supervision in accordance with the principles of the international Concordat on banking supervision. Applicants must have a profit record covering at least 5 years, and ownership and management must be acceptable to the Commission. The Commission requires written consent from a bank's home supervisor, and expects the home supervisor to exercise consolidated supervision over the bank concerned.

Offshore Banking Licenses are issued subject to the same tests as domestic licenses, but on the basis that the applicant bank will operate through managed units, ie it will not have staff or office on the island, but will appoint a local licensed bank as its manager. An offshore banking institution must agree its intended activities with the Commission before the licence is granted; these may not include transacting business with Manx residents (other than banks).

The FSC has a system of supervision based on quarterly or half-yearly financial returns. This is reinforced by annual audited accounts which must be audited by qualified accountants who have effected professional indemnity insurance currently at GBP10 million.

Details of the banks that are licensed and supervised by the Financial Supervision Commission are listed in a public register maintained by the Commission at its offices.

All banking licence holders are required to participate in the Depositors Compensation Scheme. The FSC is the Scheme Manager. The Banking Business (Compensation of Depositors) Regulations 1991 extends to all licensed banking institutions, except those listed by name in the Schedule. Deposits are protected up to 75% of the first GBP20,000 per depositor and the Scheme extends to the sterling equivalent of foreign currency deposits. Compensation is not available with regard to secured deposits or deposits which had an original term to maturity of more than five years.

The Scheme was successfully operated in respect of the default of BCCI which had a branch in the Isle of Man.

In June, 2005, the Isle of Man's Financial Supervision Commission announced that a project was underway to update the Banking (General Practice) Regulatory Code 1999. The key drivers for this project were to update the Banking Code in line with current requirements whilst taking into account the recommendations made by the International Monetary Fund (“IMF”) inspection team following its visit in 2002.

As a result, the Banking (General Practice) Regulatory Code 1999 was replaced by the Banking (General Practice) Regulatory Code 2005 on 1st July 2006.

The Commission published its approach to Basel II adoption in February 2006.

Says the Commission: 'The EU has issued the Capital Requirements Directive (“CRD”) which all regulators of member states must implement. Although this encouraged adoption from 1st January 2007, the CRD contains a qualification that, where a bank has committed to the standardised approach by 1st January 2008 it can continue to report under Basel I during 2007.

'The Isle of Man is not part of the EU and is not under any legal obligation to require locally incorporated banks to report under Basel II from 1st January 2007 or 1st January 2008.'

However, the Commission says it understands that locally incorporated banks which are subsidiaries of banks in countries requiring Basel II reporting in 2007 may wish to begin similar reporting to the Commission, whether under standardised or more advanced approaches (re parallel runs). With this in mind the Commission intends to have available the necessary reporting forms and guidance during 2007 but may require these banks to also continue reporting under Basel I.

The Commission says it will require locally incorporated banks to report under Basel II with effect from 1st January 2008 for the standardised approaches, with some degree of flexibility on a case by case basis for later adoption.

Basel II will require the Commission to make some changes to the Banking (General Practice) Regulatory Code 2005, as amended (“the Code”). It is expected that these changes will be minor and will focus on capital, risk management, and reporting forms (which are specified in the schedule to the Code). In addition, the Commission anticipates that guidance notes will be utilised to supplement the Code to ensure compliance with Basel II principles contained within Pillar 1 and Pillar 2.

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Isle of Man Investment Management Law

Licensing of investment management, including that of collective investment funds, was introduced by the Investment Business Acts 1991 to 1993, with a definition of activities to be licensed contained in the Investment Business Order 1991. The regulatory regime for collective investment funds had been previously established by the Financial Supervision Act 1988.

The list of activities requiring a license includes: brokerages offering life, pension and investment products; portfolio investment management; captive insurance management; and collective investment fund management. Futures and options are included in the definition of 'investments'; land and cash are not. Exemptions from the licensing regime include banks, building societies, and Manx and UK legal and accountancy professional firms.

In October, 2004, the FSC announced Tynwald’s approval of the Investment Business Order 2004. The 2004 Order replaces the Investment Business Order 1991.

The government, in partnership with the finance industry, reviewed the 1991 Order to ensure that the definition of investment remained relevant to the current and future business and investment situation on the island.

The following changes appear in the 2004 Order:

• The position of UK and other overseas persons has been refined to allow only UK FSA authorised persons to ‘legitimately’ solicit investment business on the Island;
• The distinction between when non investment-business professionals act in their professional capacity and when they hold themselves out as providing investment business has also been clarified;
• The circumstances in which custody services constitute investment business have been clarified;
• The exclusion relating to introductions has been refined to apply only to introductions made to ‘independent’, permitted persons;
• Relevant CSP activities, which are now regulated under the Corporate Service Providers Act 2000, have been expressly excluded; and
• The definition of futures has been updated and brought in line with the UK approach to achieve greater consistency.

The 2004 Order came into operation on 1st December 2004.

New provisions to the 1931 Companies Act were approved by Tynwald in 2000 and came into operation on 1 January, 2001. Now known as The Companies (Private Placements) (Prospectus Exemptions) Regulations 2000, the regulations allow for the exemption of certain private placements of shares or debentures from the provisions of the Act.

The exemptions in the regulations apply inter alia under three circumstances:

1) Where the shares or debentures are offered to a restricted circle of fifty or less persons who are acquiring the securities for investment purposes and not for imminent resale

2) To persons who are sufficiently knowledgeable to understand the risks involved in accepting the offer

3) Or to persons whose ordinary activities as principal or agent involve them in the acquisition, disposal, holding or management of shares or debentures.

Applicants for an Investment Business License must have a 3-year profit record, and the Commission vets ownership and management arrangements. There are detailed regulatory codes; and substantial reporting requirements. All investment businesses need to have explicit policies directed against laundering of illicit proceeds.

The regime for collective investment funds distinguishes various types of fund:

Authorised Collective Investment Schemes

These funds may be marketed to the public in the Isle of Man, the UK, Ireland, Jersey, Guernsey and Hong Kong. The island obtained designation under Section 87 of the UK FInancial Services Act 1986, and has equivalent arrangements with the other countries mentioned. An authorised fund must have independent Manx Manager and Trustee: the Manager must himself be licensed, and the Trustee must have a banking license.

Regulation falls under section 3 FSA and detailed in the Financial Supervision (Authorised Collective Investment Schemes) Regulations 1988 and the the Financial Supervision (Scheme Particulars) Regulations 1988. The Authorised Collective Investment Schemes (Compensation) Regulations 1988 provide for the establishment of a Compensation Fund for investors if a manager or trustee of an authorised scheme becomes insolvent. The Regulations generally reflect UK provisions on compensation, through which investors get 100% of their investment for the first £30,000, 90% of the next £20,000 and a maximum of £48,000 of compensation per investor.

Recognised Collective Investment Schemes

These are foreign funds which the Commission admits for local marketing purposes if it is satisfied that the level of supervision and regulation is adequate. Recognised funds must maintain facilities on the island where documents can be seen, and payments in or out can be effected. Regulation falls under sections 12 or 13 FSA. The Financial Supervision (Recognised Schemes) (Notification) Regulations specifies the information and documents required by the Commission when applying for recognition.

Restricted Collective Investment Schemes

All other collective investment funds fall under this heading. Restricted schemes (funds) may be marketed only to Manx professional investors or to existing fund members in some cases, or to overseas investors (if permitted). They must have Managers with Manx Section 3 licenses, and Trustees who are either banks or are authorised to be Trustees in the countries with which the Isle of Man has agreed reciprocal arrangements (UK, Ireland etc as above). Regulation falls under section 11 FSA and under the Financial Supervision (Restricted Schemes) Regulations 1990, which requires that all material particulars are disclosed to potential investors. The Financial Supervision (Restricted Schemes) (Advertising) Regulations 1992 prescribes the necessary information that advertisement in this respect must contain.

Professional and Experienced Investor Funds

Unregulated funds that are specially designed for the exclusive use of institutional and professional investors.

The Experienced Investor Fund (“EIF”) structure was launched in October 1999 and was designed to provide a simple, inexpensive and flexible solution to the ever more complex needs of sophisticated individuals, market professionals and global asset managers, while seeking to provide an adequate level of comfort to investors by ensuring proper disclosure and administration.

The Experienced Investor Fund is subject to a form of regulation that is aimed at the 'Experienced Investor'. Such schemes are exempted from certain of the legal and regulatory requirements that are generally applicable to International Schemes through the Financial Supervision (Experienced Investor Fund) (Exemption) Order 1999.

Exempt Schemes

Unregulated private funds which cannot be marketed to the public and are restricted to having no more than 49 participants.

Close-Ended Funds

Strictly speaking not classified as mutual funds and are used for illiquid long-term investments.

Every authorised and restricted scheme is required to have a manager licensed under section 3 of the Investment Business Act 1991 and a separate trustee, which must be a banking institution licensed under section 3 of the Banking Act 1975. All licensed managers must have shown to the Commission, prior to the granting of a licence, that they have a proven track record in the field of collective investment scheme management in another jurisdiction whose supervisory standards are acceptable to the Commission and which has established primary and secondary markets. Third party fund administrators which provide administrative services are required to hold an investment business licence under section 3 of the Investment Business Act 1991.

In addition to licensed banking institutions in the Isle of Man, the Commission will now consider certain licensed investment businesses, namely those with a Category 4 or 5 licence.

Such licenceholders wishing to act as Custodian will be assessed on a case by case basis taking into account the type or nature of the underlying scheme assets. It will also be required to demonstrate to the Commission that it is an entity with adequate financial resources and has the relevant track record, competence, experience and systems to undertake this function.

The Commission’s existing policy (i.e. under which only a licensed banking institution can act as a Custodian in the Isle of Man) is being retained for those persons wishing to act as Trustee/Custodian of an Authorised or 'pure' International Scheme.

John Aspden, Chief Executive of the FSC commented: “This development should further enhance the attractiveness of the EIF fund structure which was established in 1999 as a flexible fund structure to promote the establishment of hedge and alternative investment funds”.

In April, 2006, following consultation with the Fund Management Association, the Manx Financial Supervision Commission revised its policy on the activities that a fund administrator or fund manager can undertake for a foreign Collective Investment Scheme.

Under the revised policy, Isle of Man licenceholders will be able to provide broader administration services to operators of foreign schemes provided these are carried out under an outsourcing contract, and the appropriate licence extension is obtained from the Commission.

Previously, outsourced services could only be provided in relation to one of the 'core' activities of fund administration.

Commenting upon this change, John Aspden, Chief Executive of the Financial Supervision Commission noted that:

“The Commission is always seeking to maximise flexibility in the regulatory environment and to support new business opportunities for industry where it can do so without compromising the regulatory standards."

"The review of the inward outsourcing policy will enable local fund managers and administrators to take on more business with minimal regulatory hurdles.”

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Isle of Man Betting and Gaming Law

During 2001 the Department of Home Affairs progressed first the primary and then the secondary legislation to legalise the operation, from the Isle of Man, of well regulated on-line gambling sites. The primary legislation, the On-line Gambling Regulation Act, came into force in May. Four sets of Regulations were approved by Tynwald in June. The first three licenses under the regulations were issued in September.

The application fee was set at GBP1,000 and the licence fee at GBP80,000 per annum; in addition licence holders were required to deposit GBP2 million as a guarantee for the payment of customers and to establish a formal reserve for gaming based on a stated formula. These terms were somewhat softened in 2003.

In January, 2005, the Isle of Man reversed its four-year-old policy prohibiting e-gaming firms based in the jurisdiction from accepting online casino bets made by US residents.

The US authorities have sought to maintain domestic restrictions on gambling by banning US residents from placing bets with e-gaming firms whose servers are located in foreign jurisdictions, as illustrated by its legal fight with Antigua & Barbuda which has contested that ban through the WTO.

Tim Craine, the Isle of Man’s head of electronic business, said: "There's a lot of business looking to relocate to a reputable, regulated jurisdiction," adding: "We're hoping to capitalize on that business."

However, Mr Craine pointed out in the report that the new policy applies only to online casino and poker games, and the ban on accepting sports bets from US residents remains in place.

John Gilmore, eGaming ambassador to the Isle of Man’s Department of Trade and Industry (DTI), said that the decision was motivated by the government’s desire not to contravene any US federal laws. “We will not extend the policy to sports betting, because the Wire Act prohibits sports betting across states in the US,” Gilmore explained. “But as there is no federal law against poker or casinos we will accept those types of bets from US citizens,” he added.

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Isle of Man International Agreements

In June 2000 the Isle of Man Government wrote a 'Letter of Commitment' to the OECD's Financial Action Task Force in which it promised to comply with international standards of transparency and mutual assistance. The Government has not revealed what specific legislative consequences may follow, but it is supposed that there may be some changes to company law, and a strengthening of international treaty obligations which may be reflected in domestic law

In September 2000, an inter-governmental report was published by the Offshore Group of Banking Supervisors and the Financial Action Task Force (FATF) which praised the Isle of Man authorities for their successful endeavours in countering money laundering and related criminal activities with a 'robust arsenal' of pro-active initiatives. The report examined the effectiveness of the island's legislation, regulations and administration activities directed against money laundering. The authors were particularly impressed with plans to strenghten company sector regulations, saying that these enabled the Island to be 'at the forefront of international efforts to prevent the abuse of company structures for criminal purposes.'

The report also welcomed the creation of a new financial crime unit which draws on the combined efforts and expertise of the police, customs and regulators with a pro-active enforcement strategy. And financial professionals and institutions on the island have also been praised by the report - it says that the financial sector has a 'good compliance culture' which allows it to quickly highlight potentially suspicious transactions.

In October, 2002, the Isle of Man’s Treasury Minister, Allan Bell, signed a bilateral agreement with the United States of America which provides for the exchange of information on tax matters between the two countries. The agreement provides for exchange of information by specific case request.

Allan Bell said: “Today co-operation between Governments is more important than ever as we work to ensure that no safe haven exists - either onshore or offshore - for funds associated with activities such as money laundering, terrorist financing or tax evasion.

“Equally the Isle of Man believes that the expansion of the global economy depends on both onshore and offshore international financial centres combining highly competitive entrepreneurial environments for business with a quality of regulation and stability.”

The Isle of Man sets out to be a well regulated and responsible jurisdiction and is financially strong, as evidenced by its Triple A rating with Moody’s and Standard & Poors. It has been recognized by the FATF as being ‘at the forefront of international efforts to prevent the abuse of company structures for criminal purposes’.

Allan Bell continued: “The ability to exchange information in relation to criminal matters already exists between our countries via the Department of Justice in the United States and the Attorney General in the Isle of Man.

“The Island’s early commitment to OECD has permitted us to play an active role with the United States and other member countries in the development of a model agreement on which the agreement being signed here today is based. This provides an alternative route to obtain information in relation to criminal tax matters and also provides for a timetable for this to be extended to include civil tax matters.

“The development of a network of such agreements between member states and committed jurisdictions, whether on a multilateral basis, or a bilateral basis as adopted by the Isle of Man, will in due course evidence the existence of a new and truly international standard on Exchange of Information.

“The Isle of Man will continue to support the development of such international standards and seek to foster business relationships with other countries based on those standards and we look forward to participating in the ongoing discussions with the United States to further develop and establish closer economic and fiscal ties.”

The IOM's agreement with the US forms part of the jurisdiction's efforts to implement its commitments to the OECD, given in early 2001, which included a commitment to develop effective exchange of information. Over the following 12 months the Isle of Man, together with other jurisdictions, negotiated a Model Tax Information Exchange Agreement.

The Model being adopted provides for exchange of information based upon a formal request being received by the Competent Authority in the Isle of Man. A request must be made on an individual case basis and the subject of the request must be under investigation in the requesting jurisdiction. Other safeguards are included to prevent ‘fishing expeditions’ for example, the requesting party must first take all means available in its own jurisdiction to obtain the information. All information that is exchanged may not be passed on to third parties and there are strict confidentiality measures.

The US Treasury Department announced in September, 2006, that the Tax Information Exchange Agreement had entered into force.

According to the Treasury: "An exchange of letters between the United States and the Isle of Man was completed on June 26, 2006, thus bringing into force an agreement that allows for the exchange of information on tax matters between the United States and the Isle of Man."

In February, 2005, agreements were signed with the Dubai Financial Services Authority, the UAE Central Bank, and the Bahrain Monetary Agency.

Dubai Financial Services Authority (DFSA) signed two memoranda of understanding with the Isle of Man's Financial Supervision Commission and Insurance and Pensions Authority.

The two agreements aim to provide a framework for the provision of mutual assistance and information exchange between the two jurisdictions with regard to cross-border transactions. In addition, the agreements are designed to improve compliance, thereby helping to prevent money laundering and fraud.

Under each agreement, the Middle East Agencies, the FSC and IPA will consult with each other on an on-going basis to enhance regulatory co-operation and to collaborate on international supervision between the regions.

The MOUs also provide a framework for regulatory cooperation through the exchange of information and mutual cooperation in the field of on-site examinations of entities, subject to regulation in both jurisdictions.

In October, 2007, an association of Nordic countries concluded a package of Tax and Information Exchange Agreements (TIEA) with the Isle of Man, providing for the exchange of information between governments on a case-by-case basis, as the Manx government seeks to reinforce its global reputation as a well-regulated financial centre.

The Nordic countries started joint negotiations in July 2006 to conclude tax information exchange arrangements with jurisdictions that have made a commitment to apply the OECD standards on transparency and exchange of information in the tax area. The taxation and economic co-operation agreements have been signed with the seven members of the Nordic Council, namely Norway, Sweden, Finland, Iceland, Denmark, Greenland and the Faroe Islands. The package of 28 agreements was signed at a ceremony in Oslo. The package include tax information exchange agreements based on the OECD model of exchange of information on request on a case by case basis, and shipping and aircraft taxation agreements ensuring that a relevant business based in the Isle of Man will not be taxed in the Nordic countries so long as it is conducting international trade.

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