First published in Business Life May 2019
The revised Handbook on Countering Financial Crime and Terrorist Financing (Handbook), issued by the Guernsey Financial Services Commission (GFSC), came into operation on Monday 1 April 2019.
The GFSC’s goal for the Handbook is keep the Bailiwick’s framework for anti-money laundering (AML) and countering financial crime (CFT) in line with international standards. By doing so, the GFSC aims to nullify the evolving threat of increasingly sophisticated financial crime and methods of terrorist funding.
The Handbook is intended to achieve this as an accessible source of clear guidance to assist businesses, and their responsible employees, in understanding and adhering to their AML and CFT obligations.
Summary of Key Changes
1. Retirement of the previous distinction between “financial services businesses” (such as banks) and “prescribed businesses” (such as lawyers, accountants and insolvency practitioners). The Handbook applies to both under the term “specified businesses”.
2. Introduction of the role of Money Laundering Compliance Officer (MLCO) to be appointed by 31 March 2019 and the GFSC notified of that appointment within 14 days. The MLCO has responsibility for monitoring the business’s compliance with its AML/CFT policies, procedures and controls and reporting to the board. However, the responsibility for the business’s compliance with the Bailiwick’s AML/CFT regulatory framework lies with the board. This will be welcome clarification to those appointed to the position of MLCO, who might also (if appropriate) hold the position of Money Laundering Reporting Officer (MLRO).
3. Businesses must ensure that a reviewed business risk assessment (BRA) has been revised and approved by the board by 31 July 2019.
4. The implementation of additional customer due diligence measures is no longer reserved for those matters considered to be high-risk. Enhanced measures must be applied, whether or not the matter is considered to be high risk, in the following circumstances:
- The customer is not resident in the Bailiwick of Guernsey;
- The relationship or transaction relates to the provision of private banking services;
- The customer is a legal person or arrangement used for holding personal assets; or
- The customer is a legal person with nominee shareholders or is owned by a legal person with nominee shareholders.
5. Politically exposed persons (PEPs) are now categorised into Foreign PEPs and Domestic PEPs, with the introduction of International Organisation PEPs applicable to persons entrusted with prominent functions by international organisations. Businesses must have suitable procedures in place to minimise the risks associated with their dealings with the different categories of PEPs.
Technological advances require constant adaptation by businesses, and guidance for those within them responsible for ensuring compliance with AML/CFT policies, to ensure that the Bailiwick’s prestigious financial system is protected from illegitimate use. The Handbook, a development in the Island’s already rigorous AML/CFT regime, seeks to do exactly that and should prove to be yet another means to attract potential business to the Bailiwick.
In the event of any uncertainty as to their obligations under the Handbook, businesses should seek advice as soon as practicable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.