The Bailiwick of Guernsey is committed to preventing the abuse of its financial services sector
The Bailiwick authorities are committed to ensuring that criminals, including money launderers, terrorists and those financing terrorism or the proliferation of weapons of mass destruction, cannot launder the proceeds of crime through the Bailiwick or otherwise use the Bailiwick’s finance and business sectors. The Commission endorses the International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation issued by the Financial Action Task Force (“FATF” and “the FATF Recommendations”).
The FATF Recommendations are recognised as the global anti-money laundering and countering the financing of terrorism standard. The FATF Recommendations therefore set an international standard which countries should implement through measures adapted to their particular circumstances. The FATF Recommendations set out the essential measures that countries should have in place to:
- identify risks and develop policies and domestic co-ordination;
- pursue money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction;
- apply preventive measures for the financial sector and other designated sectors;
- establish powers and responsibilities for the competent authorities (for example, investigative, law enforcement and supervisory authorities) and other institutional measures;
- enhance the transparency and availability of beneficial ownership information of legal persons and legal arrangements; and
- facilitate international co-operation.
The September 2015 report from MONEYVAL, and prior reports in January 2011 and October 2003 from the International Monetary Fund (IMF), on their evaluations of the anti-money laundering and countering the financing of terrorism framework of the Bailiwick of Guernsey concluded that the Bailiwick has a high level of compliance with the standards set by the FATF. The 2015 MONEYVAL and 2011 IMF evaluation reports are available below:
MONEYVAL 2015 Evaluation Report
IMF 2011 Evaluation Report
- Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism
- Report on Observance of Standards and Codes-FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism
Further information on the FATF and its standards are available on its website.
Proceeds of Crime Law
Under Section 1(1) of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 as amended (“the Law”) all offences that are indictable under the laws of the Bailiwick are considered to be predicate offences and therefore funds or any type of property, regardless of value, acquired either directly or indirectly as the result of committing a predicate offence, are considered to be the proceeds of crime.
Under Bailiwick law all offences are indictable, with the exception of some minor offences which mainly concern public order and road traffic. The range of predicate offences is therefore extremely wide and includes, but is not limited to, predicate offences such as:
- terrorism, including the financing of terrorism;
- financing of proliferation of weapons of mass destruction;
- illicit trafficking in narcotic drugs and psychotropic substances;
- bribery and corruption;
- fraud and tax evasion;
- environmental crime;
- and insider trading and market manipulation.
Should a firm assist in laundering the proceeds of crime or in the financing of a terrorist act or organisation, it could face regulatory investigation, the loss of its reputation, and law enforcement investigation. The involvement of a firm with criminal proceeds or terrorist funds would also damage the reputation and integrity of the Bailiwick as an international finance centre.
Schedule 3 and the Handbook
Schedule 3 to the Proceeds of Crime Law can be found on the Guernsey Legal Resources website and includes requirements relating to:
- risk assessment and mitigation;
- applying CDD measures;
- monitoring customer activity and ongoing CDD;
- reporting suspected money laundering and terrorist financing activity;
- employee screening and training;
- record keeping; and
- ensuring compliance, corporate responsibility and related requirements.
The Handbook on Countering Financial Crime and Terrorist Financing is applicable to all financial services businesses and prescribed businesses and can be found via the Handbook page. The Handbook is issued to assist firms in complying with the requirements of the relevant legislation concerning money laundering and terrorist financing, financial crime and related offences to prevent the Bailiwick’s financial system and operations from being abused for money laundering and terrorist financing. The Proceeds of Crime Law and the Terrorism Law as amended state that the Bailiwick courts shall take account of rules made and instructions and guidance given by the Commission in determining whether or not the firm has complied with the requirements of Schedule 3.
Any Instructions which apply to all financial services businesses (both regulated and non-regulated) and prescribed businesses can be found on the Notices, Instructions and Warnings page.
Should you have any questions in respect of the Bailiwick's anti-money laundering and countering the financing of terrorism regime, or the requirements of Schedule 3 and the Handbook, please contact the Financial Crime Division. The Investment, Fiduciary and Pension Division and the Banking and Insurance Division remain the primary point of contact in respect of all other regulatory matters.