AML/CFT/CPF Guidance for DRR (Tracked)

Summary

This is GFSC guidance (dated 15 March 2024, updating an October 2023 version) explaining how individuals registered under Guernsey's Director Registration Regime (DRR) must meet a reduced set of AML/CFT/CPF obligations under Schedule 3 of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999. Because a registered director's activity is capped at no more than six directorships and does not include broader regulated business, several Schedule 3 duties (business/customer risk assessments, formal risk assessments, introduced business, compliance and corporate responsibility) are disapplied for them, but core duties remain.

• Risk understanding: Registered directors must have regard to the Handbook, Commission notices and the National Risk Assessment to judge whether a directorship is high or low risk, even though they need not conduct formal risk assessments.
• Customer due diligence: They must identify and verify the company (their customer), identify and verify anyone authorised to act on the company's behalf, and identify and take reasonable measures to verify beneficial owners (generally those with more than 25% ownership, voting rights or board appointment power, or senior managing officials if no such person exists).
• Enhanced due diligence: Higher-risk directorships (e.g. links to PEPs, high-corruption-risk sectors, opaque ownership, sanctioned jurisdictions such as Iran, North Korea, Myanmar) require enhanced due diligence, with reference to the Handbook and the Appendix's risk factor lists.
• Monitoring and reporting: Registered directors must monitor company activity and transactions and report suspicion of money laundering, terrorist financing or proliferation financing.
• Training and record-keeping: They must undertake training and keep records evidencing compliance with these obligations.
• Sanctions: Registered directors must have regard to UN, UK and Guernsey sanctions regimes.

The guidance is aimed at registered directors of companies with straightforward ownership and clear economic purpose; those serving on boards resembling private wealth management or family office structures, or connected to foreign PEPs or high-risk jurisdictions, are directed instead to the full Handbook on Countering Financial Crime and Terrorist Financing. Schedule 3 and the Handbook remain the definitive legal texts, with this document serving only as practical guidance.

Key obligations

• Registered directors must identify and verify the identity of the company (their customer) using documents such as the incorporation certificate, memorandum and articles, and register of directors.
• Registered directors must identify and verify the identity and authority of any person authorised to act on the company's behalf.
• Registered directors must identify beneficial owners of the company and take reasonable measures to verify their identity and understand the ownership and control structure.
• Registered directors must have regard to the Handbook, Commission notices/instructions and the National Risk Assessment to determine whether a directorship is high risk or low risk.
• Registered directors must apply enhanced customer due diligence where a directorship or its beneficial owner presents higher money laundering, terrorist financing or proliferation financing risk.
• Registered directors must monitor the company's activities and transactions for suspicious activity.
• Registered directors must report suspicion of money laundering, terrorist financing or proliferation financing.
• Registered directors must undertake AML/CFT/CPF training.
• Registered directors must keep records evidencing compliance with their due diligence, monitoring and reporting obligations.
• Registered directors must have regard to applicable UN, UK and Guernsey sanctions regimes.

Applies to

registered directors (individuals registered under the Director Registration Regime / Schedule 5 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999)