Instruction (Number 2) for Financial Services Businesses (2009-11-11)

Summary

This Instruction, issued by the Guernsey Financial Services Commission under the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999, requires financial services businesses to urgently improve the speed and handling of internal suspicion reports and disclosures relating to money laundering and terrorist financing. It follows IMF AML/CFT assessments of Jersey and the Isle of Man that flagged delays between staff reporting suspicions to the MLRO and onward disclosure to the Financial Intelligence Service (FIS).

• Review policies and procedures: The Board of each financial services business must review policies, procedures and controls on staff reporting of suspicions to the MLRO and on disclosures to the FIS, to ensure prompt handling, reporting and disclosure.
• Review past timeliness: Review the timeliness of suspicion reports to the MLRO and disclosures to the FIS made since 15 December 2007, identify lessons learned, and ensure future reports and disclosures are handled promptly.
• Identify repeat disclosures: Draw up a list of customers for whom more than one disclosure has been made to the FIS, with the number of disclosures, to assess whether the customer relationship should continue; documented comprehensive reasoning must be retained if the relationship is continued.
• Remedy deficiencies by deadline: By close of business on 26 February 2010, take any necessary action to remedy identified deficiencies arising from this Instruction and to comply with the customer-review requirement in paragraph (c).

The Commission states it will review compliance with this Instruction during on site inspections and by other means as necessary.

Key obligations

• The Board of each financial services business must review its policies, procedures and controls on reporting suspicions of money laundering and terrorist financing to the MLRO and on disclosures to the FIS to ensure prompt handling, reporting and disclosure.
• The Board must review the timeliness of suspicion reports and FIS disclosures made since 15 December 2007 and act on lessons learned to ensure future promptness.
• The business must draw up a list of customers with more than one disclosure made to the FIS, including the number of disclosures, and assess whether to continue the customer relationship, retaining documented comprehensive reasoning if the relationship continues.
• By close of business on 26 February 2010, the business must have taken any necessary action to remedy deficiencies identified under this Instruction and to comply with the customer-list requirement.

Applies to

financial services businesses

Deadlines

• 26 February 2010 (close of business): Deadline to have taken necessary action to remedy identified deficiencies and comply with the customer relationship review requirement in paragraph (c).
• since 15 December 2007: Period from which past suspicion reports and FIS disclosures must be reviewed for timeliness.