Two United Nations Resolutions [1373 and 1267] in respect of the freezing of terrorist funds or other assets have been implemented in the Bailiwick by the Terrorism (United Nations Measures) (Channel Islands) Order 2001 (“Terrorism Order 2001”) and by the Al-Qa’ida and Taliban (United Nations Measures) (Channel Islands) Order 2002 (“Al-Qa’ida Order 2002”).

Both Orders create offences of strict liability in respect of the release of funds to persons involved in terrorism or in breach of a notice from HM Procureur.

On 4 February 2010, the Supreme Court in the United Kingdom made a ruling which quashed the Terrorism (United Nations Measures) Order, 2006. Following that decision, the Terrorist Asset-Freezing (Temporary Provisions) Act, 2010, was introduced. This makes provision for the temporary validity of the UK Order as well as confirming the validity of the Terrorism Order 2001, below. As such the following Orders must still be complied with. Any person or body considering entering into any form of financial or other type of business relationship that is in any way connected with the countries or subjects covered by those orders must exercise great caution and closely consider the details contained within the two orders.

 

 

Under Article 5, it is a criminal offence for any person to make any funds or financial services available to or for the benefit of any of the following persons (including legal persons);
(a) persons who commit, attempt to commit, facilitate or participate in the commission of terrorism,
(b) persons controlled or owned directly or indirectly by persons referred to in paragraph (a) above, or
(c) persons acting on behalf of, or on the direction of, persons referred to in paragraph (a) above.

The United Nations and the European Union have each imposed sanctions against specified countries and/or those who are or were involved in their government on the grounds of suspected or known involvement in terrorist activity. The full list of individuals and entities may be found in the financial sanctions section of the HM Treasury website at:

http://www.hm-treasury.gov.uk/fin_sanctions_index.htm

This is a consolidated list of specified countries, organisations and individuals who have been designated by the United Nations, European Union and United Kingdom under legislation relating to current financial sanctions regimes. While neither this legislation nor the lists issued under it are binding in the Bailiwick (other than in respect of persons listed by the United Nations under United Nations Resolution 1267 - see below) and Guernsey does not maintain its own list of asset freeze targets, the presence of individuals and entities on the United Kingdom‟s consolidated list is a strong indication that such persons also fall within the definitions in the Terrorism Order. However, it is important to appreciate that there are likely to be legal or natural persons who come within those definitions but are not on the consolidated lists.

If you have any concerns or queries about a person who is not on the list you should contact the FIS in the first instance.

In addition to this general prohibition, Article 6 provides that HM Procureur, as the Bailiwick’s licensing authority, may by notice [referred to here as a Freezing of Funds Notice] direct that particular funds are not to be made available to any person, where HM Procureur has reasonable grounds for suspecting that the person by, for or on behalf of whom any funds are held is or may be involved in terrorism.

HM Procureur may issue a licence permitting the release of specified funds which would otherwise be caught by the provisions of Articles 5 and 6. No offence is committed in respect of such funds provided that the terms of the licence are complied with.

Obligations under Freezing of Funds Notice– if you receive a Freezing of Funds Notice your obligations are twofold. You must:

(i) Refuse to make the funds available to the person for or on behalf of whom the funds are held, unless authority has been given to release funds in accordance with the terms of a licence;

(ii) Send a copy of the Freezing of Funds Notice, without delay, to the person whose funds they are, or on whose behalf they are held. You will be treated as complying with this requirement if, without delay, you send a copy of the Freezing of Funds Notice to the owner at his last-known address or, if you do not have an address for the owner, you make arrangements for a copy of the notice to be supplied to the owner at the first available opportunity.

Failure to comply with either of these requirements is an offence under the Terrorism Order 2001.

A Guidance Note issued by HM Procureur which explains the effect of a Freezing of Funds Notice will be served with a Freezing of Funds Notice, and a copy of this should also be sent on to the person for or on behalf of whom the funds are held.

 

 

This Order contains similar provisions in respect of the provision of funds to listed persons. A listed person as defined in Article 2 is (a) Usama bin Laden or (b) any person designated by the Sanctions Committee in the list maintained by that Committee in accordance with resolution 1390 adopted by the Security Council on 16th January 2002 as: (i) a member of the Al-Qa’ida organisation; (ii) a member of the Taliban; (iii) an individual, group, undertaking or entity associated with the persons covered by (a), (b)(i) or (ii) above. The Sanctions Committee list can be accessed here.

Under Article 7 it is an offence for any person to make any funds available to or for the benefit of listed persons or any person acting on behalf of a listed person.

Under Article 8 of the Al-Qa’ida Order 2002, HM Procureur as the Bailiwick’s licensing authority may by notice [referred to here as a Freezing of Funds Notice] direct that particular funds are not made available to any person, where he has reasonable grounds for suspecting that the person by, for or on behalf of whom any funds are held is or may be a listed person or a person acting on behalf of a listed person.

It should be noted that HM Procureur may issue a licence permitting the release of specified funds which would otherwise be caught by the provisions of Articles 7 and 8. No offence is committed in respect of such funds provided that the terms of the licence are complied with.

Obligations under Freezing of Funds Notice– if you receive a Freezing of Funds Notice, your obligations are twofold. You must:

(i) Refuse to make the funds available to the person for or on behalf of whom the funds are held, unless authority has been given to release funds in accordance with the terms of a licence;

(ii) Send a copy of the Freezing of Funds Notice, without delay, to the person whose funds they are, or on whose behalf they are held. You will be treated as complying with this requirement if, without delay, you send a copy of the Freezing of Funds Notice to the owner at his last-known address or, if you do not have an address for the owner, you make arrangements for a copy of the Freezing of Funds Notice to be supplied to the owner at the first available opportunity.

Failure to comply with either of these requirements is an offence under the Al-Qa’ida Order 2002.

A Guidance Note issued by HM Procureur, which explains the effect of a Freezing of Funds Notice, will be served with a Freezing of Funds Notice, and a copy of this should also be sent on to the person for or on behalf of whom the funds are held. 
 

 

Any person within the Bailiwick who wishes to challenge or seek a review of a particular designation by the Sanctions Committee of the United Nations as set out in Article 2 should contact HM Procureur.

 

 

HM Procureur may issue a licence permitting the release of specified funds which would otherwise be caught by the provisions of Articles 5 and 6 of the Terrorism Order and Articles 7 and 8 of the Al Qa’ida Order 2002.  No offence is committed in respect of such funds provided that the terms of the licence are complied with. HM Procureur will entertain applications for licences from any party. Licences will normally only be issued in respect of funding for necessities such as food, medical treatment and accommodation, but funding for extraordinary expenses will also be considered.

A licence may be made subject to conditions, and it is an offence to breach any such conditions.

Applications for licences, setting out the grounds on which the application is made and including any supporting documentation, should be made in writing to HM Procureur at law@gov.gg or by post to St. James Chambers, St. Peter Port, Guernsey, GY1 4BY. It is an offence under both Orders for any person knowingly or recklessly to make a false statement or to furnish false information for the purposes of obtaining a licence.

Further information about licences is contained in the Guidance Note issued by HM Procureur.

Unfreezing of funds

 

 

 

 

The two Orders create various offences related to the funding of terrorism. Financial institutions should note in particular that, under both Orders, it is a criminal offence for an institution to fail to disclose its knowledge or suspicion that a present or former customer is involved in terrorism, is a listed person or has committed any of the specified offences in the Orders.

Further information

 

HM Procureur’s office should be contacted if you require further information.

Contact details –

 

Email - law@gov.gg

 

Post to St. James Chambers, St. Peter Port, Guernsey, GY1 4BY.

 

Telephone/fax 01481 723355/725439