Financial Crime Handbook Consultation (2019-05-07)

Summary

This is a Guernsey Financial Services Commission consultation draft of a revised Handbook on Countering Financial Crime and Terrorist Financing, circulated in tracked-changes form for industry comment. The Handbook sets out the Commission's rules and guidance for meeting the anti-money laundering and countering-the-financing-of-terrorism (AML/CFT) requirements in Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999, the Terrorism and Crime Law, the Disclosure Law and the Transfer of Funds Ordinances. It applies to all specified businesses (financial services businesses and prescribed businesses) operating in the Bailiwick of Guernsey, including Guernsey-based branches of overseas companies.

• Scope of the draft Handbook: Covers corporate governance, risk-based approach, customer due diligence (CDD) for natural and legal persons, certification, enhanced and simplified CDD, introduced business, transaction monitoring, UN/EU and other sanctions, suspicion reporting, wire transfers, employee screening and training, and record keeping.
• Status as rules vs guidance: Distinguishes 'Commission Rules' (mandatory, marked with 'must') from paraphrased Schedule 3 requirements ('shall') and non-mandatory 'guidance' ('should'/'may'), with courts able to take compliance with the Rules into account when assessing Schedule 3 compliance.
• Consultation purpose: The version reviewed is a tracked-changes draft issued by the Commission for stakeholder feedback prior to finalisation; it does not itself create new binding obligations beyond those already in force under Schedule 3 and related enactments.
• Transitional provisions: Chapter 17 addresses transitional arrangements for existing business relationships, business risk assessments, and MLRO/MLCO and nominated firm arrangements once any revised Handbook takes effect.

Because this is a consultation draft rather than the finalised Handbook, firms should treat the tracked changes as proposed amendments to existing AML/CFT obligations and monitor the GFSC source page for the final published version and any consultation response deadline, which is not stated in the extracted text.

Key obligations

• Specified businesses must apply a risk-based approach to AML/CFT, including firm-wide and customer risk assessments
• Specified businesses must apply customer due diligence measures to natural persons, legal persons and legal arrangements, including identifying beneficial owners
• Specified businesses must conduct ongoing monitoring of customer activity and transactions
• Specified businesses must screen customers and transactions against UN, EU and other sanctions lists and report matches
• Specified businesses must report suspicions of money laundering or terrorist financing via the prescribed disclosure channels
• Specified businesses must screen and train employees on AML/CFT obligations
• Specified businesses must maintain records of CDD, transactions and training as required by Schedule 3
• Specified businesses should review the tracked changes to the Handbook and consider submitting comments to the Commission as part of the consultation process

Applies to

financial services businesses, prescribed businesses, specified businesses under Schedule 3, Bailiwick-based branches of overseas companies conducting financial or prescribed business