Instruction (Number 4) for Financial Services Businesses (2009-11-11)

Summary

This is a 2009 Instruction from the Guernsey Financial Services Commission, issued under section 49(7) of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999, addressing risks arising from introducer relationships with financial services businesses in jurisdictions with secrecy provisions. It follows an IMF assessment concern that such introducers may face barriers to providing customer due diligence (CDD) evidence on request.

The Commission directs the Board of each financial services business to take specific remedial and review actions regarding existing and future introducer relationships, particularly those involving jurisdictions perceived as having secrecy provisions.

• Review compliance: Review compliance with Regulation 10 of the Criminal Justice (Proceeds of Crime) (Financial Services Businesses) (Bailiwick of Guernsey) Regulations 2007 and each rule in section 4.10 of the Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing.
• Testing programme review: Review the testing programme required under rule 140 of the Handbook to ensure risks from introducers based in secrecy jurisdictions (or those widely thought to have secrecy provisions) are identified and managed, including obtaining sample copies of identification data from introducers.
• Remedial action: By close of business on 26 February 2010, remedy any deficiencies identified, or discontinue the introducer relationship if deficiencies cannot be remedied.
• Ongoing scrutiny: Actions taken under this Instruction will be reviewed by the Commission during on-site inspections and by other means.

Key obligations

• Each financial services business's Board must review compliance with Regulation 10 of the 2007 Regulations and section 4.10 of the Handbook rules on introducer relationships.
• Each Board must review its testing programme under rule 140 of the Handbook to ensure risks from introducers in secrecy jurisdictions are identified and mitigated, including obtaining sample copies of identification data from introducers.
• By close of business on 26 February 2010, each business must have remedied any identified deficiencies in introducer relationships or discontinued the relationship if deficiencies cannot be remedied.
• Financial services businesses must not set up or maintain introducer relationships unless certain that originals or copies of CDD information held by the introducer will be provided upon request without delay.

Applies to

financial services businesses

Deadlines

• 26 February 2010 (close of business): Deadline for financial services businesses to have taken necessary action to remedy identified deficiencies in introducer relationships, or to discontinue the relationship if deficiencies cannot be remedied.