MONEYVAL – the wait is over for Guernsey!!!

The report on the 4th assessment visit of Guernsey by MoneyVal was published on Friday 15^th January.

1. Full 322 page Report here – http://bit.ly/1QhsPDl
2. executive summary here – http://bit.ly/1OuGSkj

Guernsey was found to be compliant or largely compliant with all but one of the 40 FATF recommendations and the nine special recommendations; the exception being

1. in relation to sanctions for breaches of the money-laundering laws. – The report suggests that the use of financial penalties for legal persons CANNOT act as an effective deterrent to non-compliance and notes that cases of STR non-reporting are rarely fined or in any other way sanctioned. In regards to this latter point one wonders if this could lead to more aggressive local prosecutions of purported cases of non-reporting of suspicious transactions as seen in the 2015 Jersey prosecution of Michelle Jardine and STM Fiduciaire Limited
2. Another point of note includes a MoneyVal comment that “documentary evidence with respect to the source of funds and wealth for high risk customers is requested rather infrequently.” This is a requirement in the GFSC’s AML Handbook however and sometimes it is, of course, possible to obtain this information without contacting the client. It seems likely that documentary evidence of source of funds may be a focus point of future on-site visits as a result of this comment. As such this may be an area in which financial services businesses wish to revisit their existing practices and focus more intensively on.

MoneyVal also question

1. the sufficiency of AML measures where assessment is done on an intermediary (e.g. foreign bank acting on the account of the ultimate investor) rather than on the beneficial owner and underlying principal(s) for whom the intermediary is acting.
2. This is of course a reference to the introducer regime and seems to be largely focused on the funds sector so we may see some changes there.

Notwithstanding the above, there will no doubt be more commentary and analysis as the full 322 pages are unpacked and acted on, however for now it seems to be good news for Guernsey and Jersey is next up…………………………