Beneficial Ownership of Guernsey and Alderney Legal Persons – Thematic Review 2018/2019

Summary

This is a Guernsey Financial Services Commission thematic review report, published in 2019, summarising the findings of an onsite and questionnaire-based review of how Full Fiduciary and Personal Fiduciary Licensees (acting as resident agents) implemented the Beneficial Ownership Legislation that came into force in August 2017. It is a findings and observations report rather than new rules, but it restates the underlying legal requirements resident agents must meet and flags areas of weak practice the Commission expects fixed.

• Scope of review: Covered all 190 Guernsey and Alderney Full and Personal Fiduciary Licensees via questionnaire, with in-depth onsite file reviews at 20 Licensees covering almost 400 legal persons.
• Core legal requirement restated: Resident agents of Guernsey and Alderney legal persons must maintain accurate, up to date beneficial ownership information (using the three-tier ownership/control/senior managing official test) and submit it to the Registrar of Beneficial Ownership of Legal Persons.
• Findings: Beneficial owners were correctly identified and verified in all sampled files; however, 5% of sampled files had incomplete or incorrect information actually submitted to the Register (e.g. missing power-holder details, misidentified corporate holding companies as beneficial owners instead of underlying individuals, missing trustee or life tenant information, or failure to record a senior managing official where no natural person held over 25%).
• Systems and controls: The report reviews Licensees' policies, procedures and controls for identifying beneficial owners, direct contact with beneficial owners, and use of nominee shareholder arrangements, noting generally sound but improvable practices.
• Ongoing supervisory approach: The Commission states it will continue to sample the accuracy of beneficial ownership information submitted to the Registry as part of its regular AML/CFT onsite supervision of Licensees.

The report does not introduce new legal obligations but reminds Licensees of existing statutory duties under the Beneficial Ownership Legislation and AML/CFT Regulations, and signals continued and enhanced Commission scrutiny of Register accuracy going forward.

Key obligations

• Resident agents of Guernsey and Alderney legal persons must identify and verify beneficial owners according to the three-tier test (ownership, control by other means, senior managing official) set out in the Beneficial Ownership Regulations.
• Resident agents must submit complete and accurate beneficial ownership information (including power-holders, trustees, settlors, beneficiaries, protectors and life tenants where relevant) to the Guernsey and Alderney Registers.
• Licensees identified with incomplete or incorrect Register submissions during the review were required to review and resubmit correct information to the Register.
• Licensees must maintain up to date information on settlors, trustees, beneficiaries and protectors of trusts controlling legal persons in accordance with the Bailiwick's AML/CFT Regulations, available to Competent Authorities on request.

Applies to

Full Fiduciary Licensees, Personal Fiduciary Licensees, resident agents of Guernsey and Alderney legal persons, Trust and Corporate Service Providers (TCSPs), corporate trustees

Deadlines

• 28 February 2018: Transitional deadline by which Licensees were required to provide accurate and current beneficial ownership information on existing Guernsey and Alderney legal persons to the Register.