Consultation on Revisions to the Bailiwick's AML/CFT Framework (June 2017)

Summary

This is a joint consultation paper issued in June 2017 by the States of Guernsey Policy and Resources Committee (P&R) and the Guernsey Financial Services Commission (GFSC), seeking feedback on proposed revisions to the Bailiwick's AML/CFT legal and regulatory framework. The changes are intended to align Guernsey's regime with the FATF's 2012 Recommendations and to address recommendations made in MONEYVAL's 2016 mutual evaluation report. It proposes repealing the existing Proceeds of Crime Regulations and replacing them with new Schedules to the Proceeds of Crime Law, alongside revised Commission Handbooks.

• Structural change: Existing Regulations for financial services businesses and prescribed businesses would be repealed and replaced by Schedules 3, 4 and 5 to the Proceeds of Crime (Bailiwick of Guernsey) Law, 1999, introducing a unified concept of 'specified business' covering both financial services businesses and prescribed businesses.
• Risk-based approach: A new general duty to understand, assess and mitigate ML and FT risk, more detailed business risk assessment requirements, and a requirement to have regard to the National Risk Assessment (NRA).
• Additional Customer Due Diligence (ACDD): A new ACDD category, distinct from enhanced due diligence, proposed to apply automatically to non-resident customers, private banking clients, personal asset holding vehicles, and companies with nominee shareholders or bearer shares.
• PEP provisions: Enhanced due diligence requirements extended to cover domestic PEPs and persons entrusted with a prominent function by an international organisation (IOPEPs), in addition to foreign PEPs.
• Other areas covered: Corporate governance, beneficial ownership, collective investment schemes, reliance on intermediaries/introducers, registration of money or value transfer/currency changing businesses and prescribed businesses, and transitional provisions.

As a consultation paper, this document does not itself impose binding obligations; it invites comments on draft legislation, rules and guidance before P&R and the Commission finalise the framework. Businesses are asked to respond via the Commission's Citizen Space Consultation Hub or in writing to named contacts by the stated deadline.

Key obligations

• Respondents wishing to comment must submit feedback via the Citizen Space Consultation Hub or in writing to the named GFSC and Policy Council contacts by close of business on Monday 31 July 2017.
• Businesses are specifically asked to comment on whether the four categories proposed for automatic Additional Customer Due Diligence (ACDD) should be modified, based on ML/FT risk evidence.

Applies to

financial services businesses, prescribed businesses, legal professionals, accountants and estate agents, money or value transfer services businesses, money or currency changing businesses, collective investment schemes

Deadlines

• 31 July 2017: Deadline for responses to the Consultation Paper on revisions to the Bailiwick's AML/CFT framework.