Legal

“MorCryp” is the trading name of Mortha Limited for its Cryptocurrency Business.

Mortha Limited can be verified at the Companies Registry of the Isle of Man Government Online Services link below:

https://services.gov.im/ded/services/companiesregistry/companysearch.iom

The Company Registration Certificate is Displayed below for reference:

MorCryp (Trading name of Mortha Limited) is Registered as a Designated Non-Financial Businesses and Professions (DNFPB) for AML/CFT oversight with the Isle of Man Financial Services Authority (IOMFSA).

This can be verified at the link https://www.iomfsa.im/register-search/

The Search Result Screenshot has been displayed below for reference:

A Brief on Designated Non-Financial Businesses and Professions

Notes from https://www.iomfsa.im/designated-business/overview/

Overview

Background to the Designated Businesses (Registration & Oversight) Act 2015:

Following comments from the IMF report in 2009, the Council of Ministers considered proposals put forward by the then Chief Secretary’s Office (now the Cabinet Office) to place responsibility on the Isle of Man Financial Services Authority (“the Authority") for the oversight of the adherence of certain businesses and professions (“Designated Businesses”) to the Island’s anti-money laundering and countering the financing of terrorism legislation (“AML/CFT legislation”).

Designated Businesses are also commonly referred to as Designated Non-Financial Businesses and Professions or “DNFBPs”.

Designated Businesses (Registration and Oversight) Act 2015 (“the Act”) was passed in order to address these comments and came into force on 26 October 2015.

The Act does not make persons affected by its provisions licence holders of the Authority. The Authority’s role in licensing and supervising Financial Institutions is distinct and entirely separate from its role under this Act.

Designated businesses are registered and overseen by the Authority for AML/CFT compliance only –they retain their current status with the various bodies (if any) responsible for their wider business, competence or other matters, such as the Isle of Man Law Society, the ICAEW, ACCA, CIMA, the Office of Fair Trading etc.

The Designated Businesses (Disclosure of Information) Order 2017 made under the Designated Businesses (Registration and Oversight) Act 2015 came into operation on 1 November 2017.

What is "Designated Business"?

A designated business is any person who undertakes the business as defined in Schedule 1 of the Act which can be found here.

  • Lawyers where the business includes

    • managing any assets belonging to a client;

    • the provision of legal services which involves participation in a financial or real property transaction (whether by assisting in the planning or execution of any such transaction or otherwise) by acting for, or on behalf of, a client in respect of —

      • the sale or purchase of land;

      • managing bank, savings or security accounts;

      • organising contributions for the promotion, formation, operation or management of bodies corporate;

      • the sale or purchase of a business; or

      • the creation, operation or management of a legal person or legal arrangement;

  • the business of audit services in respect of a body corporate;

  • the business of an external accountant as defined by Schedule (1)(1)(f) of the Proceeds of Crime Act 2008;

  • the business of lending including, but not limited to, consumer credit, mortgage credit factoring and the finance of commercial transactions;

  • the business of financial leasing arrangements in respect of products other than consumer products;

  • the business of providing financial guarantees and commitments;

  • the business of an estate agent within the meaning of the Estate Agents Act 1975;

  • the business of dealing in goods or services of any description (including dealing as an auctioneer) whenever a transaction or series of linked transactions involves accepting a total cash payment (in any currency) that is equivalent to at least €15,000.

  • the business of a tax adviser as defined in the Income Tax Act 1970;

  • the business of a payroll agent as defined by Schedule  4 (1)(6) of the Proceeds of Crime Act 2008;

  • the provision of safe custody facilities for cash or liquid securities, deposit boxes or other secure storage facilities;

  • the business of issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies, including crypto-currencies or similar concepts where the concept is accepted by persons as a means of payment for goods or services, a unit of account, a store of value or a commodity; and

  • the activity of a specified non-profit organisation as defined by Schedule 4 (1)(6) of the Proceeds of Crime Act 2008;

AML/CFT

The Island introduced its first anti-money laundering legislation in 1987, the Drug Trafficking Offences Act. In due course this was followed by other legislation such as the Prevention of Terrorism Act 1990, the Criminal Justice Act 1990 and the Criminal Justice Act 1991.

Copies of primary and secondary legislation can be found on the Attorney General's Chambers legislation website.

The introduction of the Criminal Justice (Money Laundering Offences) Act 1998 extended the definition of money laundering to cover all serious crimes, leading to its informal title of "the all crimes legislation". In addition, it led to the creation of the Anti-Money Laundering Code 1998, which came into force on 1st December 1998. The Anti Money Laundering Code 1998 was replaced by the Criminal Justice (Money Laundering) Code 2007 in September 2007, subsequently replaced by the Criminal Justice (Money Laundering) Code 2008 which came into effect on the 18 December 2008. On 1 September 2010 this was superseded by the Proceeds of Crime (Money Laundering) Code 2010. This was supplemented by the Prevention of Terrorist Financing Code 2011 which came into effect on 1 September 2011. On 1 May 2013 the Money Laundering and Terrorist Financing Code came into effect which broadly mirrored the requirements of the previous Codes but combined the AML and CFT provisions into one piece of legislation. It should be noted that the Money Laundering and Terrorist Financing Code 2013 was amended by the Money Laundering and Terrorist Financing (Amendment) Code 2013 on 1 July 2013.

Following this, on 1 April 2015 the revised Anti-Money Laundering and Countering the Financing of Terrorism Code 2015 (“the Code”) came into effect. The revision to the legislation included:

  • changes made to take into account the revised FATF Recommendations adopted in 2012;

  • changes in relation to simplified CDD concessions; and;

  • general amendments to improve the layout, flow and language of the Code.

In addition, Schedule 4 to the Proceeds of Crime Act 2008 was extended to cover:

  • tax advisors;

  • payroll service providers;

  • controlled machines;

  • specified non-profit organisations; and

  • convertible virtual currencies.

Oversight

Once registered, a designated business must advise the Authority of any changes in its circumstances. The changes that should be notified include any changes to the information submitted at registration such as contact details or details of those charged with the governance of the business. This change will be notified by the business logging into the online portal on the Authority’s website and updating the forms used at application stage. The system will then notify the Authority who will approve the changes or revert with any queries.

Each year, a registered designated business will be required to submit an annual compliance declaration. This will be made available on the online portal from the 1 October of each year (starting in 2016) and must be submitted by 1 November of that year. The declaration is a brief form in which the registered designated business confirms, among other things, that any changes have been notified to the Authority, and any instances where the designated business has failed to comply with the AML/CFT legislation have also been notified to the Authority.

All registered persons will be subject to a periodic visit from the Authority or a body to whom the Authority has delegated its powers to test compliance with AML / CFT Legislation.

At present the Authority has delegated its oversight powers to the following professional bodies:

  • Institute of Chartered Accountants of England and Wales

  • Association of Chartered Certified Accountants

  • Isle of Man Law Societyleft

  • Institute of Certified Bookkeepers

  • Institute of Financial Accountants

  • International Association of Bookkeepers

Should a business wish to be overseen by its professional body, it should elect to do so at registration. Once registration is complete and the oversight body chosen, the choice of oversight body will be fixed for a period of 3 years.

The professional bodies will be responsible for the oversight process and will feed back to the Authority. Registration and enforcement powers will be retained by the Authority.

It is intended that all registered businesses will receive a visit in the first 3 years of the operation of this regime. The purpose of an onsite visit is to test a designated business’ compliance with the AML/CFT legislation. The principle is to test that the business has adequate procedures in place to prevent and forestall money laundering and terrorist financing and that these procedures are being implemented effectively.

The Authority (or professional body) will provide feedback on any weak areas or any areas where a business may not be in compliance with the legislation. It is anticipated that the length of visits will range from half a day to up to 2 days depending on the size and nature of the designated business.

It is anticipated that from January 2019 the regime will move to a 6-year cycle.

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