Equiom (Guernsey) Limited (2024-07-26)

Summary

This is a Guernsey Financial Services Commission (GFSC) enforcement public statement, not a rule with ongoing obligations for the wider industry. It records the Commission's decision, taken on 19 July 2024, to impose a financial penalty of £455,000 on Equiom (Guernsey) Limited, a licensed fiduciary, and to publish this statement, following findings of serious and repeated AML/CFT and governance failures over the period 1 January 2018 to 7 September 2023.

• Ineffective board: Twenty directors resigned and twenty were appointed during the Relevant Period, leaving the board under-resourced and unable to ensure remediation was completed, contrary to the Minimum Criteria for Licensing and the Code of Corporate Governance.
• Inadequate staffing: Staff turnover exceeded 50% in two consecutive years, and 2019 redundancies (imposed by the parent company) worsened resourcing, contrary to the requirement to have staff of adequate number, skills, knowledge and experience.
• Ineffective policies, procedures and controls: The firm failed to update its AML/CFT policies in line with the 2019 Handbook by the 30 September 2020 deadline and failed to operate an effective compliance review policy under Schedule 3.
• Failure to review relationship risk assessments: Backlogs of periodic and relationship risk reviews (e.g. 216 outstanding in January 2020, rising to 596 by Q3 2021) meant high-risk clients, including a PEP and a client linked to alleged drug trafficking, went unreviewed for years.
• Failure on source of funds/wealth: Despite a dedicated remediation project, several high-risk client files still lacked reasonable measures to establish source of funds and source of wealth, contrary to Schedule 3 ECDD requirements.

The Commission applied a 30% early-settlement discount in recognition of the firm's cooperation and the substantial remediation steps taken, including board changes, a new majority shareholder, third-party oversight of remediation, and exiting a number of high-risk client relationships. The statement is a case-specific enforcement outcome; it does not create new generally-applicable rules but illustrates how the Commission applies the Fiduciaries Law Minimum Criteria, the Code of Corporate Governance and Schedule 3/Handbook AML/CFT requirements.

Key obligations

• Equiom (Guernsey) Limited must pay the £455,000 financial penalty imposed by the Commission under section 39 of the Enforcement Powers Law.

Applies to

fiduciary licensees, trust and corporate services providers, DNFBPs