Issue 2, April 2024

We have a good story to tell

With our onsite MONEYVAL evaluation just around the corner, I wanted to take this opportunity to say that the Bailiwick has a very good story to tell on how well we collectively prevent money laundering and terrorist financing, but all too often we hide our light. If there is one time to be more like our brasher cousins from across the Atlantic it is now - this is our time to talk up the Bailiwick.

You might ask what are the elements of our framework to celebrate?

Well, here are our thoughts.

As an international finance centre, we recognise that the risks will be higher than if we only had a domestic financial market, but there is extensive experience and expertise to identify, understand and effectively manage the risks. These are some of the factors from which our view is derived:

Mature professional industry long used to and experienced at identifying and assessing its ML and TF risks;
Boards show significant interest in the effectiveness of their compliance function – just think how compliance reporting has changed over the last five years;
Considerable investment in compliance in terms of staff and systems – by how much have your compliance teams grown since MONEYVAL’s last evaluation in 2014?
In dealing with Russian sanctions, industry has shown its clear understanding of beneficial ownership by drilling into complex client structures to identify sanctioned persons;
Huge support for AMLCFT presentations and workshops – not just ours but also Policy & Resources, as the sanctions authority, and the FIU.

In respect of our last point it was hardly surprising to have a 550-strong audience at the industry update on the National Strategy and National Risk Assessment in January, where we talked about NRA2 being an ‘evolution not a revolution.'

You can find more information on NRA2 and the slides from the industry update on the National Strategy and National Risk Assessment (NRA) on the NRA page on our website. For the latest news and updates on the Bailiwick’s approach to combatting financial crime, including MONEYVAL FAQs, please visit the States of Guernsey’s Financial Crime hub.

In the lead up to the visit, we would like to ask you to please keep reading all the various materials and guidance from us and other Bailiwick authorities, and support any events being put on for you, such as the Industry Briefing on the National Risk Assessment for Legal persons and Legal arrangements taking place on Tuesday 9 April at 10:00am. To book your place, visit: Briefing on National Risk Assessment - Legal Persons & Legal Arrangements Tickets, Tue, Apr 9, 2024 at 10:00 AM | Eventbrite

If you have any questions or concerns, you can contact your usual supervisory contact or email info@gfsc.gg

Fiona Crocker
Director of Financial Crime

Save the date for Finovation: The Guernsey Edge conference

Join the Commission, Guernsey Finance and industry experts on Wednesday 11 September 2024 for a one-day conference looking at how we can make financial services better with technology. We’ll examine how we can leverage our island’s nimbleness, robust legal framework and approach to regulation to benefit from new and emerging technologies.

The event will feature leading industry experts and showcase local and international developments.

Full programme details, including how to register, coming soon.

Governance, Risk and Compliance Controls to Counter Financial Crime - Estate Agency, Legal and Accountancy Services

Towards the end of 2023 the Commission’s Financial Crime Division undertook a thematic review of the governance, risk, and compliance controls to counter financial crime within estate agency, legal and accountancy businesses registered with the Commission as prescribed businesses for the purposes of financial crime supervision.

As part of its thematic review, the Commission visited 18 of the 107 registered firms representing a range of business activities and services provided by the sector, meeting with representatives of each firm and reviewing a number of customer files per firm for compliance with the Bailiwick’s anti-financial crime regime.

The Commission has published a thematic report on its findings, providing industry with its conclusions, including case studies, good practice examples and areas for improvement. The report also contains a self-assurance question set designed to assist firms in strengthening their existing policies, procedures, and controls.

All firms supervised by the Commission, and not just prescribed businesses, will find areas within the report which will be relevant to their own businesses.

The Commission will be hosting workshops on the thematic for each of the three prescribed business sub-sectors later in 2024, to which all relevant firms registered with the Commission will be invited.

Visit the States of Guernsey's Financial Crime hub for the latest news and updates on the Bailiwick’s approach to combatting financial crime, including MONEYVAL FAQs

Testing, testing, 1,2,3… Our Innovation SoundBox

The Commission recognises that in order to aid development of innovative products and services, open communication channels and regulatory certainty for business is essential. Our Innovation SoundBox offers prospective innovative or start-up financial services businesses, who are considering applying for a regulatory licence or approval from the Commission, with access to regulators and Commission policy makers. This invaluable access helps prospective applicants understand the Bailiwick regulatory framework and how it may impact their operations.

Last year, we licensed the first Virtual Asset Service Provider (VASP) following early engagement and discussions through the Innovation SoundBox. The VASP was able to take advantage of the introduction of the Bailiwick’s new Lending, Credit and Finance regulatory regime, which complies with the Financial Action Task Force standards.

For more information on the Innovation SoundBox, visit our website.

News in brief

Updates to the AML/CFT/CPF Handbook

The Handbook on Countering Financial Crime (AML/CFT/CPF*), as it is now called, has been updated following a consultation on rules and guidance to support the extension of the existing obligations upon specified businesses to countering proliferation financing.

The consultation also included amendments following the recent publication of the second national risk assessment on the money laundering, terrorist financing and proliferation financing risks to the Bailiwick, changes to the rules on pooled bank accounts for local businesses, and changes to Chapter 12 of the Handbook on UN, UK and Bailiwick sanctions, as well as other minor changes.

*AML/CFT/CPF is anti-money laundering, countering the financing of terrorism and countering proliferation financing

Changes to rules and guidance on pooled accounts

The Commission seeks to engage with industry associations and last year, as part of this engagement and other feedback, the Commission learned of difficulties encountered by some local businesses to access banking services to hold client money in pooled accounts.

Read about the steps the Commission has taken and the resulting amendments to the rules and guidance on pooled accounts in a blog written by Commission Secretary, Alice Joy, on Guernsey Chamber of Commerce’s website.

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Guernsey Financial Services Commission, Glategny Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3HQ

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