Borrowing (Control) (Bailiwick of Guernsey) Law, 1946

Summary

This is 1946 enabling legislation for the Bailiwick of Guernsey that allows the Royal Court (now the States of Deliberation, following a 1949 transfer of legislative powers) to make Ordinances controlling certain borrowing and securities transactions connected with the Bailiwick. The Law itself does not directly regulate anyone; it authorises future Ordinances and lays down the enforcement powers and penalties that apply once such an Ordinance is made. Notably, the text records that the operative Ordinance made under this Law was repealed by the Control of Borrowing (Repeal) (Bailiwick of Guernsey) Ordinance, 2013, so as of that consolidation no borrowing control Ordinance appears to be in force under this framework.

• Transactions that may be regulated by Ordinance: Borrowing money in the Bailiwick where the aggregate borrowed by the same person in the preceding 12 months exceeds ten thousand pounds (exempt: ordinary course borrowing from a bank)
• Raising money by issue of shares by a body corporate
• Issue of shares, debentures or other securities by bodies incorporated in, or securities registered in, the Bailiwick, or issue of securities of non UK/Guernsey/Alderney/Sark governments registered in the Bailiwick
• Circulation in the Bailiwick of offers to subscribe for, sell or exchange shares/securities of non Bailiwick incorporated bodies or foreign government securities
• Registration and business of limited partnerships (added with effect from 1 February 1996)
• Units under a unit trust scheme are treated the same as shares in a body corporate

• Enforcement and penalties (apply once an Ordinance is made under the Law): Contravention of an Ordinance: on summary conviction, up to 3 months imprisonment and/or a fine (level 4 on the uniform scale); on indictment, up to 2 years imprisonment and/or a fine set at the highest of the level 4 scale, the amount borrowed, or the value of the securities involved
• The States Treasurer may direct any person to furnish information or produce documents needed to secure compliance with, or detect evasion of, an Ordinance; a person may refuse to give self incriminating information (but produced documents can still be used in evidence) and privileged legal communications are protected
• The Bailiff may issue a search warrant where documents required to be produced have been withheld
• Failing to furnish information/documents, destroying or concealing documents, or obstructing an authorised person is a summary offence (up to 3 months imprisonment and/or a level 2 scale fine)
• Directors, managers, secretaries and similar officers of a body corporate are personally liable for the body's offence unless they prove it occurred without their consent or connivance and they exercised due diligence
• Fines recovered are split equally between the Crown and the States of Guernsey (or the relevant island where the offence arose in Alderney or Sark)

Because the text notes that the Ordinance made under section 1 was repealed in 2013, compliance officers should verify with the GFSC or Guernsey Legal Resources whether any current Ordinance under this Law is in force before treating any of the above transaction controls as operative.

Key obligations

• If an Ordinance is made under section 1 of the Law, persons carrying out the specified borrowing, share issue, securities issue or circulation, or limited partnership transactions must comply with the terms and any exemptions of that Ordinance
• Any person directed by the States Treasurer must furnish information or produce documents needed for compliance or evasion detection regarding an Ordinance made under the Law, subject to the privilege against self-incrimination for information (not documents) and legal professional privilege

Applies to

persons borrowing money in the Bailiwick of Guernsey, body corporates issuing shares, debentures or securities, unit trust schemes, limited partnerships, persons directed by the States Treasurer to furnish information or documents

Related documents

• Limited Partnerships (Guernsey) Law, 1995 amends this document