Zedra Trust Company (Guernsey) Limited and Mr Colin Andrew Borman (2024-10-14)

Summary

This is a public enforcement statement issued by the Guernsey Financial Services Commission against Zedra Trust Company (Guernsey) Limited and its former executive director Mr Colin Andrew Borman, following an investigation into anti money laundering failings connected to a single client relationship (Client A) between 2020 and 2021. It sets out financial penalties, a prohibition order against Mr Borman, and a disapplication of a regulatory exemption, and explains the underlying breaches of AML/CFT and fiduciary licensing requirements.

• Financial penalties: A £90,000 penalty imposed on the Licensee and a £15,000 penalty imposed on Mr Borman under section 39 of the Enforcement Powers Law.
• Prohibition order: Mr Borman is prohibited for two years from acting as a controller, director, money laundering reporting officer or money laundering compliance officer, under section 33 of the Enforcement Powers Law.
• Exemption disapplied: A notice under section 32 of the Enforcement Powers Law disapplies the exemption in section 3(1)(g) of the Fiduciaries Law in respect of Mr Borman for two years.
• Public statement: The Commission published this statement under section 38 of the Enforcement Powers Law, describing failures in risk assessment, beneficial ownership identification, enhanced due diligence, record keeping and board oversight relating to Client A.
• Underlying breaches: Failures identified include ineffective risk assessments under Schedule 3, failure to identify and verify beneficial ownership under the Beneficial Ownership Law, inadequate enhanced due diligence on a non-resident customer, poor record keeping, and weak board and compliance oversight.

The statement is retrospective and enforcement focused rather than imposing new general rules, but it illustrates the Commission's expectations for fiduciary licensees on beneficial ownership identification, risk-based due diligence, enhanced measures for non-resident customers, and record keeping under Schedule 3, the Beneficial Ownership Law, the Fiduciaries Law and the Handbook.

Key obligations

• Zedra Trust Company (Guernsey) Limited must pay a financial penalty of £90,000 to the Commission.
• Mr Colin Andrew Borman must pay a financial penalty of £15,000 to the Commission.
• Mr Borman is prohibited for two years from holding the position of controller, director, money laundering reporting officer or money laundering compliance officer at any licensed entity.
• The exemption under section 3(1)(g) of the Fiduciaries Law does not apply to Mr Borman for a period of two years.

Applies to

fiduciary licensees, trust and corporate service providers, money laundering compliance officers, money laundering reporting officers, directors and controllers of licensed fiduciary businesses

Deadlines

• two years from 7 October 2024: Duration of Mr Borman's prohibition from acting as controller, director, MLRO or MLCO.
• two years from 7 October 2024: Duration of the disapplication of the exemption under section 3(1)(g) of the Fiduciaries Law in respect of Mr Borman.