The Guernsey authorities, including the Guernsey Financial Services Commission are committed to meeting established international standards on anti-money laundering and combating the financing of terrorism. In this connection, both the October 2003 and the January 2011 reports from the International Monetary Fund (IMF) on its evaluations of the AML/CFT framework of the Bailiwick of Guernsey concluded that the Bailiwick has a high level of compliance with the standards set by the Financial Action Task Force (FATF). The IMF’s 2011 evaluation reports are available below.
Further information on FATF and its standards are available on its website at
www.fatf-gafi.org.
Typologies
The methods used for money laundering and terrorist financing are in constant evolution. As the international financial sector and other businesses implement the standards set by the FATF, criminals must find alternative channels to launder the proceeds of their criminal activities and finance their illicit activities.
International organisations such as the FATF and the Egmont Group of Financial Intelligence Units identify new threats and research money laundering and terrorist financing methods. They also produce typologies reports, which describe and explain the nature of these methods and threats, thus increasing global awareness and allowing for earlier detection of money laundering and terrorist financing.
In order to assist financial services businesses and prescribed businesses in Guernsey to be aware of the variety of methods used to launder money and to finance terrorism, the Commission is providing links to documents which provide examples of cases. Businesses may find these cases useful for training and awareness purposes.
In addition, the Jersey Financial Services Commission and the Joint Financial Crime Unit in Jersey have jointly commissioned an AML/CFT Typologies document using local case studies where they are available otherwise international cases are included where they are relevant to local businesses.
A document has also been issued by the Egmont Training Working Group, which undertook an initiative to draw together a compilation of sanitised cases - the
Egmont Case Studies - about the fight against money laundering undertaken by the Egmont Group member FIUs. The cases were subdivided into six categories, containing five general money laundering typologies and one chapter focusing on intelligence exchange successes. The categories used were:
- Concealment within Business Structures
- Misuse of Legitimate Businesses
- Use of False Identities, Documents, or Straw Men
- Exploiting International Jurisdictional Issues
- Use of Anonymous Asset Types
- Effective Use of Intelligence Exchanges
The FATF document on Trade Based Money Laundering can be found
here.
Regulations and Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing and the Regulations and Handbook for Legal Professionals, Accountants and Estate Agents on Countering Financial Crime and Terrorist Financing
The Regulations, Handbook and Business from Sensitive Sources Instructions which apply to all financial services businesses (both regulated and non-regulated) are available from the menus in this section of the website.
For further information on anti-money laundering and countering the financing of terrorism please see the FATF website and the
Egmont case studies.
Dealers in Precious Metals and Precious Stones
On the 1st December 2008 the
Criminal Justice (Proceeds of Crime) (Restriction on Cash Transactions) (Bailiwick of Guernsey) Regulations, 2008 came into force. A copy of the media announcement is available here. The regulations restrict the sale or purchase of precious metals, precious stones or jewellery where the payment is made in cash and exceeds £10,000. A person who contravenes the restriction commits an offence and is liable, for a first offence, to a fine not exceeding £1,000 and, for a second or subsequent offence, to a fine not exceeding twice the value of the cash involved.
The regulations do not detract from the requirements of the Disclosure (Bailiwick of Guernsey) Law, 2007 and the Terrorism and Crime (Bailiwick of Guernsey) Law, 2002 to report suspicion of money laundering and the financing of terrorism to the Financial Intelligence Service. These requirements to report suspicion of money laundering and the financing of terrorism extend to transactions and attempted transactions of any value.
This legislation contains offences if dealers and individuals employed by dealers do not make a disclosure to the Financial Intelligence Service (FIS) where they have knowledge or suspicion of money laundering or terrorist financing or if they have reasonable grounds for knowing or suspecting money laundering or terrorist financing. Copies of the documents which must be used when making a disclosure of suspicion to the FIS can be found on its website at
www.guernseyfiu.gov.gg. Dealers and their staff are legally protected from breaking any obligation of confidentiality when making disclosures to the FIS. The legislation also includes tipping off offences whereby it is an offence to disclose information or any other matter which is likely to prejudice an investigation by law enforcement.
Case studies involving dealers in high value goods can be found here.
Charities and Non Profit Organisations
The Charities and Non Profit Organisations (Registration) (Guernsey) Law, 2008 (“NPO Law”) has been in place since 3 November 2008.
The NPO Law provides for a register of non profit organisations to be established and maintained. A non profit organisation which is not a charity is considered to be a Guernsey Registered Non Profit Organisation whilst it is on the register. A non profit organisation which is a charity is considered to be a Guernsey Registered Charity whilst it is on the register.
A non profit organisation based in the island of Guernsey, Herm or Jethou with gross assets and funds of, or over, £10,000 or gross annual income of, or over, £5,000 and which is not a manumitted organisation, which is not registered is guilty of an offence. Each registered organisation must apply to renew its registration at the commencement of each calendar year.
An application for registration must contain –
the full names of the persons who own, direct or control the activities of the organisation including (without limitation) its directors, officers and trustees and, for each of those persons –
in the case of an individual, his current home and business addresses, or
in the case of an organisation, its registered office or anything similar under the legislation of the country of incorporation or establishment or (if it has no such office) its principal place of business,
a contact address within the Bailiwick at which all communications may be served,
details of the purposes, objectives and objects of the organisation, and
details of the manner in which the assets, funds and income of the organisation are applied or used.
Manumitted organisations are those which are administered, controlled or operated by a person -
who holds or is deemed to hold a licence granted by the Guernsey Financial Services Commission under the regulatory Laws, and
who administers, controls or operates the organisation in the course of his regulated activities.
Registered and manumitted organisations must –
make, keep and retain records of all financial transactions (with whosoever made) in order to evidence the application or use of the organisation's assets, funds and income,
in the case of a registered organisation, file annual financial statements with the Registrar, in such form as may be specified by him; and
in the case of a registered organisation, inform the Registrar as soon as is reasonably practicable of any change to any of the matters required to be stated in the application for registration.
The Charities and Non Profit Organisations (Registration) (Guernsey and Alderney) Law, 2010 was approved by the States of Guernsey at their meeting on 28 April. The law was subsequently approved by the States of Alderney on 23 June and will shortly be provided to the Privy Council for approval. This Law applies the Charities and Non Profit Organisations (Registration) (Guernsey) Law, 2008 to Alderney and makes consequential amendments.
Case studies involving charities and non profit organisations can be found below.
Case studies on the misuse of charities and non profit organisations
World Bank working paper - Non Profit Organizations and the Combatting of Terrorism Financing