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Guernsey Amends Anti-Money Laundering Rules

Thursday, November 22, 2012

The Guernsey Financial Services Commission has announced that it is preparing revisions to the regulations and rules governing anti-money laundering (AML) standards for financial services businesses and for prescribed businesses (firms of lawyers, accountants and estate agents) in the island following a number of recent on-site inspections and comments received from the industry.

Amendments are to include:

  • The adoption of a more sophisticated approach for firms in risk profiling their customers to take into account international and local developments in best practices in the area. The Commission said the changes will be particularly beneficial for Guernsey firms which are part of financial groups as they will allow these firms’ procedures to mesh more easily with group procedures.
  • The removal of general insurance from the AML regulations and rules. The Commission considers that the risk of general insurance being used for money laundering is very low and that, as a result, firms providing or advising on general insurance should not be required to meet detailed AML regulations and rules for that type of insurance. This reflects a more ‘risk-based approach’ to AML issues, it said.
  • Revisions to the "likely to benefit" rules so that, other than in high risk situations, there will be more flexibility for firms in the timing of verification of identity of beneficiaries of trusts falling within the rules; and
  • A new chapter will be introduced providing guidance for firms in relation to bribery and corruption, which are of increasing international concern as crimes in their own right as well as motivations for money laundering.

The Commission said the revisions would be issued early in the New Year, and confirmed that firms would be allowed a transitional period to amend their policies, procedures and controls before the changes come into effect. In some areas no transitional period is needed, such as the removal of general insurance from the detailed requirements for firms.

Richard Walker, Director of Policy and International Affairs said: “It is crucial that Guernsey’s work in preventing the products and services we offer from being used by money launderers is focused as much as possible, and industry’s efforts put to the best effect possible. The current AML framework has been in place for several years. The experience of both the Commission and industry with it is enabling us to take the positive steps of revising the framework and enhancing its focus.”