AML/CFT/CPF Guidance for Unregistered 'Upto6' Directors

Summary

This is guidance from the Guernsey Financial Services Commission explaining how a specific category of director, those using the 'up to 6' licensing exemption under section 3(1)(g) of the Fiduciaries Law who are exempt from the director registration regime, must meet their AML/CFT/CPF obligations under Schedule 3 of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999. It sets out a reduced but still binding set of duties reflecting the limited scope of their activities (acting as director of no more than six Bailiwick companies or NPOs), and explains in practical terms how ordinary director duties can be used to satisfy these obligations.

• Customer due diligence: Identify and verify the company (the 'customer'), identify and verify persons authorised to act on its behalf, and identify and take reasonable measures to verify the company's beneficial owner(s), including looking through corporate/trust structures where relevant.
• Enhanced due diligence: Apply ECDD where the company is high risk, including where beneficially owned by a foreign PEP, connected to Iran, North Korea or Myanmar, or otherwise assessed as high risk by the director; apply enhanced measures for companies incorporated outside the Bailiwick or holding personal assets of the beneficial owner.
• Low-risk relationships: Simplified due diligence may apply where the relationship is assessed as low risk.
• Monitoring and reporting: Monitor the company's activity and transactions and report suspicions of money laundering, terrorist financing or proliferation financing.
• Training and record-keeping: Undertake relevant training and keep records sufficient to demonstrate compliance with due diligence, monitoring and reporting obligations.
• Sanctions: Have regard to UN, UK and Guernsey sanctions regimes.
• Referral to fuller guidance: Directors on boards resembling private wealth management or family office arrangements, or connected to foreign PEPs or high-risk jurisdictions (Iran, North Korea, Myanmar), must refer to the full Handbook on Countering Financial Crime rather than rely solely on this simplified guidance.

The guidance does not itself create new legal obligations beyond those already in Schedule 3 and the Handbook, which remain the definitive legal texts; it is an explanatory tool for directors who may be unfamiliar with financial services compliance practices.

Key obligations

• Identify the company (customer) and verify its identity using documents such as the incorporation certificate, memorandum and articles, or a company registry search.
• Identify persons authorised to act on behalf of the company and verify their identity and authority to act.
• Identify the beneficial owner(s) of the company and take reasonable measures to verify their identity and understand the ownership and control structure, looking through corporate/trust structures where applicable.
• Apply enhanced customer due diligence where the company is high risk (e.g. foreign PEP ownership, connection to Iran, North Korea or Myanmar, or director's own risk assessment).
• Apply enhanced measures for companies incorporated outside the Bailiwick or holding the beneficial owner's personal assets.
• Apply simplified due diligence measures where a relationship is assessed as low risk.
• Monitor the company's transactions and activity for signs of money laundering, terrorist financing or proliferation financing.
• Report suspicions of money laundering, terrorist financing or proliferation financing.
• Undertake AML/CFT/CPF training appropriate to the director's role.
• Keep records sufficient to evidence compliance with due diligence, monitoring, reporting and training obligations.
• Refer to the Handbook on Countering Financial Crime instead of relying solely on this guidance where the directorship resembles private wealth management/family office work or involves foreign PEPs or high-risk jurisdictions.

Applies to

unregistered, up-to-6-exempted directors (directors using the 'up to 6' licensing exemption under section 3(1)(g) of the Fiduciaries Law who are not required to register under the director registration regime)