Financial Crime Handbook Consultation - Chapter 1 (Introduction) (2020-04-17)

Summary

This is the introductory chapter of a consultation draft of the Guernsey Financial Services Commission's (GFSC) revised Financial Crime Handbook. It explains the background, scope and structure of the Handbook, which sets out the standards expected of all specified businesses in the Bailiwick of Guernsey for compliance with Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 and related AML/CFT legislation. As a consultation draft, it is not yet a final rulebook, but it explains how the eventual Handbook's rules and guidance will operate.

• Scope: Applies to all specified businesses conducting financial services business or prescribed business in the Bailiwick, including Bailiwick branches of overseas companies, whether natural persons, legal persons or legal arrangements.
• Two-level structure: Commission Rules (mandatory, using 'must') and guidance (using 'should'/'may') both explain how firms must meet the legally enforceable requirements of Schedule 3.
• Schedule 3 subject areas: Risk assessment and mitigation, customer due diligence, monitoring and ongoing CDD, suspicious activity reporting, employee screening and training, record keeping, and compliance/corporate responsibility.
• Consequences of failure: Significant failure to meet Schedule 3, Commission Rules or Relevant Enactments can lead to enforcement action, licence withdrawal/restriction/suspension, or affect fit-and-proper and minimum licensing criteria assessments.
• Data protection interaction: Firms retaining AML/CFT records containing personal data must also comply with the Data Protection (Bailiwick of Guernsey) Law, 2017.
• International context: Describes the Bailiwick's National Risk Assessment findings (foreign-sourced ML risk from bribery, corruption and fraud; cross-border FT risk) and its MONEYVAL evaluation history, which firms must have regard to in their own risk assessments.

Because this is Chapter 1 of a multi-chapter consultation draft, it is largely explanatory and does not itself introduce new binding requirements beyond restating existing Schedule 3 and related legislative obligations; substantive rule changes would appear in later chapters of the consultation.

Key obligations

• Firms must have regard to the Bailiwick's National Risk Assessment when formulating their business risk assessments and risk appetite
• Firms retaining records or documentation containing personal data must comply with the Data Protection (Bailiwick of Guernsey) Law, 2017
• Firms must comply with Schedule 3 requirements on risk assessment, CDD, monitoring, suspicious activity reporting, employee screening/training, record keeping and compliance arrangements, as explained and paraphrased in the Handbook

Applies to

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