Willow Trust Limited (2014-06-19)

Summary

This is a public enforcement statement issued by the Guernsey Financial Services Commission (GFSC) against Willow Trust Limited, a licensed fiduciary business. On 17 June 2014 the Commission imposed a financial penalty of £30,000 on Willow under Section 11D of the Financial Services Commission Law and published this statement under Section 11C, following findings of systemic anti-money laundering and corporate governance failings.

• Risk assessment failings: Relationship risk assessments did not adequately consider products, services, purpose of the relationship, or transaction type/volume/value, contrary to Handbook Rule 56; source of funds and wealth were not established for high risk customers, contrary to Regulation 5(2)(a)(iii) and Rule 184.
• Monitoring failings: Willow failed to review risk assessments with sufficient regularity (Regulation 3(2)(b)) and failed to conduct ongoing customer due diligence as part of monitoring (Rule 286), resulting in an inability to properly scrutinise transactions (Rule 276).
• Governance and reporting failings: Despite Board awareness of a growing backlog of file reviews and advice from external compliance consultants, the issues were not adequately addressed; Willow also failed to notify the Commission of material compliance failures, contrary to Rule 30 of the Handbook.
• Mitigating factors considered: The Commission took into account Willow's full cooperation, a remediation plan to be completed by the end of September 2014, and early settlement, applying a discount to the financial penalty as a result.

The statement serves as a public record of the enforcement outcome against Willow specifically; it does not itself create new generally applicable rules, but illustrates the Commission's expectations under the Fiduciaries Law, the Proceeds of Crime Regulations, and the AML/CFT Handbook for fiduciary licensees.

Key obligations

• Willow Trust Limited is required to complete its remediation plan addressing the identified AML and governance failings by the end of September 2014.
• Willow Trust Limited must pay the £30,000 financial penalty imposed by the Commission.

Applies to

fiduciaries, trust companies, licensed administration businesses

Deadlines

• end of September 2014: Willow Trust Limited's remediation plan to address the identified AML procedural and governance failings is to be completed by this date.