Criminal Justice (Proceeds of Crime) (Financial Services Businesses) (Bailiwick of Guernsey) Regulations, 2007 (Consolidated as at 2013)

Summary

This is the core Guernsey statutory instrument setting out anti-money laundering and countering terrorist financing (AML/CFT) requirements for financial services businesses in the Bailiwick of Guernsey. This consolidated version (as at 2013) incorporates amendments made between 2008 and 2013 and covers risk assessment, customer due diligence, record keeping, monitoring, reporting of suspicion, employee screening, registration, and offences.

• Risk assessment: Businesses must carry out and document a suitable and sufficient money laundering and terrorist financing business risk assessment, review it at least annually, and assess the risk of each proposed business relationship or occasional transaction before entering into it.
• Customer due diligence (CDD): Requires identification and verification of customers, persons acting on their behalf, beneficial owners and underlying principals, determination of PEP status, and understanding of the purpose and intended nature of the relationship.
• Enhanced due diligence: Mandatory for PEPs, correspondent banking or similar relationships, high risk jurisdictions or relationships, and relationships assessed as high risk, including senior management approval and source of funds/wealth checks.
• Reduced/simplified due diligence: Permitted only for relationships assessed as low risk, in accordance with Commission Handbook requirements, and never where suspicion of money laundering or terrorist financing exists.
• Timing of verification: Identification and verification must generally occur before or during establishment of a business relationship or occasional transaction, with limited scope to complete verification afterwards under specified conditions.
• Accounts and shell banks: Prohibits anonymous or fictitious-name accounts and correspondent relationships with shell banks or banks known to permit shell bank use of their accounts.
• Monitoring, reporting, training and record keeping: Businesses must monitor transactions and relationships, report suspicion internally, screen and train employees, keep records, and ensure corporate responsibility for AML/CFT compliance (Part III).
• Registration and notification: Certain non-licensed financial services businesses must register with, and notify information to, the Guernsey Financial Services Commission (Part IIIA and regulation 16), and money/value transmission providers must maintain a list of agents.
• Offences: Part IV creates offences, including for providing false or misleading information, with associated penalties.

The Regulations also amend the definition of financial services business in Schedule 1 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999, and require courts to have regard to the GFSC Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing when assessing compliance.

Key obligations

• Carry out and document a suitable and sufficient money laundering and terrorist financing business risk assessment as soon as reasonably practicable, and review it at least annually, updating it where necessary
• Undertake a risk assessment of each proposed business relationship or occasional transaction before establishing it, and review that assessment regularly
• Carry out customer due diligence (identification and verification of customer, persons acting on their behalf, beneficial owners and underlying principals) when establishing a business relationship, carrying out an occasional transaction, or where suspicion or doubts about identification data arise
• Carry out enhanced customer due diligence for politically exposed persons, correspondent banking relationships, high risk countries/relationships, and relationships assessed as high risk, including obtaining senior management approval and establishing source of funds and wealth
• Only apply reduced or simplified due diligence to relationships assessed as low risk and never where money laundering or terrorist financing is suspected
• Complete identification and verification before or during establishment of a business relationship or before an occasional transaction, subject to limited exceptions requiring prompt completion afterwards
• Not set up anonymous accounts or accounts in fictitious names, and not enter into or continue correspondent banking relationships with shell banks
• Monitor business relationships and transactions on an ongoing basis, with more frequent monitoring for higher risk relationships
• Report internal suspicions of money laundering or terrorist financing
• Screen and train employees on AML/CFT obligations
• Keep records sufficient to demonstrate compliance with the Regulations
• Ensure corporate responsibility for compliance, including appointment of appropriate compliance oversight
• Register with the Guernsey Financial Services Commission where required under Part IIIA and notify prescribed information
• Maintain a list of agents where providing money or value transmission services
• Provide accurate information to the Commission and avoid making false or misleading statements

Applies to

financial services businesses, money or value transmission service providers, non-regulated financial services businesses required to register under Part IIIA, correspondent banks

Deadlines

• 15th December, 2007: Commencement date of the Regulations
• as soon as reasonably practicable after these Regulations come into force: Deadline for a financial services business to carry out its initial business risk assessment
• annually (at a minimum): Required frequency for reviewing and updating the business risk assessment
• 28th March, 2013: Effective date of amendments to regulations 3, 5 and 6 made by the 2013 Amendment Regulations
• 22nd April, 2013: Effective date of amendment to regulation 5(1)(d) made by the 2013 (No. 2) Amendment Regulations
• 6th July, 2009: Effective date of amendments to regulations 4 and 5 made by the 2009 Amendment Regulations
• 22nd February, 2010: Effective date of amendment to regulation 5(1)(c)(ii) made by the 2010 Amendment Regulations
• 21st June, 2010: Effective date of amendment to regulation 6(3) made by the 2010 (No. 2) Amendment Regulations

Related documents

• This document amends Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999
• This document is made under Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999