Instruction (Number 03/2017) for Financial Services Businesses

Summary

This Instruction, issued under section 49(7) of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999, directs financial services businesses on how to treat business connected with jurisdictions identified by the FATF as posing money laundering and terrorist financing risks, plus additional jurisdictions of specific concern to the Guernsey Financial Services Commission (GFSC). It repeals and replaces the prior Instruction (Number 02/2017) and reproduces the FATF's Public Statement and its 'Improving Global AML/CFT Compliance: On-Going Process' document, together with the Commission's own concerns regarding Haiti, Venezuela, and Central and West African countries.

• FATF Public Statement jurisdictions (DPRK, Iran): Financial services businesses must apply a greater degree of caution, enhanced client due diligence, and special attention to all existing and new business relationships and transactions connected with these countries; for DPRK and Iran specifically, firms must also take measures to ensure correspondent relationships are not used to bypass counter-measures.
• On-going process jurisdictions (Bosnia and Herzegovina, Ethiopia, Iraq, Syria, Uganda, Vanuatu, Yemen): Financial services businesses must factor the risk posed by these jurisdictions into their risk assessment of any business relationship or occasional transaction.
• Jurisdictions removed from monitoring (Afghanistan, Lao PDR): No special counter-measures are required, though firms should be aware these countries were previously subject to FATF's on-going compliance process.
• GFSC-specific concerns (Haiti, Venezuela, and named Central/West African states): Financial services businesses must exercise greater caution, apply enhanced customer due diligence, and give special attention to existing and new business relationships and transactions connected with Haiti, Venezuela, and the listed Central and West African countries (Cape Verde Islands, Mauritania, Cote d'Ivoire, Morocco, Ghana, Nigeria, Guinea, Senegal, Guinea Bissau, Sierra Leone, Liberia).
• Supervisory review: The Commission states it will review, during on-site inspections and by other means, the action taken by each financial services business under each part of the Instruction.

The document is informational guidance implementing FATF statements into Guernsey's regulatory framework rather than creating new standalone due diligence rules; it operates alongside existing AML/CFT obligations. It has since been superseded by later instructions reflecting updated FATF lists.

Key obligations

• Financial services businesses must exercise a greater degree of caution and apply enhanced client due diligence and special attention to all existing and new business relationships and transactions connected with countries named in the FATF Public Statement (currently DPRK and Iran).
• For DPRK and Iran specifically, financial services businesses must take appropriate measures to ensure correspondent relationships are not used to bypass or evade counter-measures and risk mitigation practices.
• Financial services businesses must consider the risk posed by jurisdictions listed in the FATF 'Improving Global AML/CFT Compliance: On-Going Process' document (Bosnia and Herzegovina, Ethiopia, Iraq, Syria, Uganda, Vanuatu, Yemen) when assessing risk of any business relationship or occasional transaction.
• Financial services businesses must exercise greater caution and apply enhanced customer due diligence and special attention to existing and new business relationships and transactions connected with Haiti, Venezuela, and the named Central and West African countries.

Applies to

financial services businesses