International Regulatory and Supervisory Bodies

In its November 2003 report on the Bailiwick of Guernsey’s regulatory and criminal justice framework, the International Monetary Fund (“IMF”) concluded that Guernsey has ‘a high level of compliance’ with each of the international standards against which the Bailiwick was assessed - the Basel Core Principles for Effective Banking Supervision, the Insurance Core Principles of the International Association of Insurance Supervisors; the Objectives and Principles of Securities Regulation of the International Organization of Securities Commissions; and the Financial Action Task Force 40+8 Recommendations. Guernsey’s legal framework for company and trust service providers was also found by the IMF to be fully consistent with the Offshore Group of Banking Supervisors Statement of Best Practice for Company and Trust Service Providers. All of these standards have been adopted by Guernsey as the foundations on which to build its reputation as a leading finance centre.

In its January 2011 financial stability assessment program reports on the Bailiwick the IMF concluded that the regulatory, supervisory and AML/CFT frameworks are comprehensive.

Select this link to the External Evaluations section of the website to view further details (including ratings of compliance) of the assessments.

The Commission is actively involved with a number of international regulatory and supervisory organisations. A brief summary of bodies with which the Commission is involved is provided below. Further details can be obtained from their websites, for which addresses have been provided below (except for the Enlarged Contact Group on the Supervision of Collective Investment Funds, which does not have a website).

Banking

The Basel Committee on Banking Supervision

The Basel Committee on Banking Supervision is a committee of banking supervisory authorities which was established by the Central Bank Governors of the G-10 countries in 1975. The Basel Committee is responsible for issuing guidelines on standards which the international community expects from banks and bank supervisors. In 1988 the Committee introduced a capital measurement system known as the Basel Capital Accord. The Capital Accord established how supervisors should measure the amount of capital needed to support a bank’s risk and introduced the concept of a minimum risk asset ratio of 8%. A revised framework was issued in 2004. In 1997 the Basel Committee introduced Twenty-Five Core Principles of Effective Banking Supervision, followed in 1999 by the Core Principles Methodology. The Basel Committee has produced papers on a wide variety of subjects and has contributed substantially to the improving of international standards of banking supervision. A complete list of publications is available on the website for the Bank of International Settlements under Basel Committee, Publications. The website address is www.bis.org.

The Group of International Financial Centre Supervisors

The Offshore Group of Banking Supervisors changed its name to the Group of International Finance Centre Supervisors (GIFCS) on 1 April 2011 to reflect more accurately the current scope of the Group's activities.

Guernsey was a founding member of the Offshore Group of Banking Supervisors which was established in 1980 as a forum for supervisory cooperation between banking supervisors. The group meets twice a year, once in London and in years when the International Conference of Banking Supervisors is held, it meets at that conference’s venue; in other years it meets at a location in one of the jurisdictions represented in the group.

With the passage of time the Group has been increasingly recognised by relevant international organisations as a representative body whose members are making a valuable contribution to combating money laundering/terrorism financing and to the regulation of trust and company service providers.

The current members of the GIFCS are: Aruba, Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Gibraltar, Guernsey, Isle of Man, Jersey, Labuan, Macau China, Mauritius, Panama, Samoa, Vanuatu and the Central Bank of Curacao and Saint Maarten.

The Group has observer status with the Financial Action Task Force on Money Laundering and Terrorist Financing, has a close working relationship with the Basel Committee on Banking Supervision and continues to play an active role in contributing to the discussions on revisions to the Basel Core Principles and other relevant international standards and to promoting compliance with those standards. More details about the GIFCS can be found on the website www.gifcs.org.

Insurance

The International Association of Insurance Fraud Agencies

Guernsey is a member of the International Association of Insurance Fraud Agencies (“IAIFA”). The IAIFA was formed in 1986 by the directors of insurance fraud agencies from the United States of America and Canada. The IAIFA aims to coordinate efforts, training and education to prevent and combat insurance fraud worldwide more effectively. By working with regulators, law enforcement agencies and companies, the IAIFA attempts to break down jurisdictional barriers. The association is also active in encouraging other enforcement agencies to share information to the mutual benefit of all who are involved in assuring a high level of integrity throughout the insurance industry. The IAIFA website address is www.iaifa.org.

The International Association of Insurance Supervisors

The Commission is a founder member of the International Association of Insurance Supervisors (“IAIS”). The IAIS was formed in 1994 and comprises international regulatory officials representing over 100 countries. It is located at the Bank for International Settlements in Basel, Switzerland. The IAIS was formed:

to promote cooperation among insurance regulators;
to set international standards for insurance supervision;
to provide training to members; and
to coordinate work with regulators in the other financial sectors and international financial institutions.

The IAIS issues global insurance principles, standards and guidance, provides training and support on issues related to insurance supervision, and organises meetings and seminars for insurance supervisors. The IAIS updated its Twenty-Eight Insurance Core Principles and the methodology for assessing compliance with these Principles in October 2003. The IAIS website address is www.iaisweb.org.

The Group of International Insurance Centre Supervisors

The group’s main objectives are:

to provide mechanisms and forums whereby insurance supervisors from jurisdictions concerned with offshore insurance business may discuss areas of mutual interest and concern and formulate appropriate policies;
to provide assistance and encouragement to appropriate non-member jurisdictions to establish regimes for the supervision of offshore insurance business at least to standards equivalent to those of the group;
to represent the interests of the group at international insurance forums; and
generally, to promote the proper supervision of offshore insurance business.

The GIICS website address is www.giics.org.

Investment

International Organization of Securities Commissions

The International Organization of Securities Commissions (“IOSCO”) is an association of securities regulatory organisations which was created in 1983 and now comprises more than 180 members. The Commission was originally admitted as an Associate Member in 1991 and became a Full Member in 1997.

IOSCO now embraces almost all the world’s securities and derivatives regulatory bodies and plays an increasingly important role in assisting members to achieve and maintain high regulatory standards in the interests of investors and the prevention of crime.

IOSCO members have resolved:

to cooperate together to promote high standards of regulation in order to maintain just, efficient and sound markets;
to exchange information on their respective experiences in order to promote the development of domestic markets;
to unite their efforts to establish standards and an effective surveillance of international securities transactions; and
to provide mutual assistance to promote the integrity of the markets by a rigorous application of the standards and by effective enforcement against offences.

The IOSCO website address is www.iosco.org.

Enlarged Contact Group on the Supervision of Collective Investment Funds

The Enlarged Contact Group on the Supervision of Collective Investment Funds (“ECG”) is an informal group of collective investment fund regulators, which was established in 1970.

Membership was originally restricted to the regulatory authorities of the European Union Member States, but has widened significantly to include, in addition to many European Union Member States, Guernsey and the other Crown Dependencies, Brazil, Canada, Hong Kong, Japan, Mexico, Norway, Switzerland, South Africa and the United States of America.

The ECG holds annual meetings, chaired and organised by the host regulatory authority. These annual meetings include discussions on current regulatory topics, international regulatory cooperation and recent developments in regulation in the member countries. During the year, members maintain contact on regulatory matters such as the exchange of information.

Economic crime

The Financial Action Task Force on Money Laundering

The Financial Action Task Force on Money Laundering (“FATF”) is an inter-governmental body whose purpose is the development and promotion of policies to combat money laundering and terrorist financing.

Guernsey is not a FATF member but is a Crown Dependency of the United Kingdom (which is a FATF member). Guernsey is also a member of the Offshore Group of Banking Supervisors (“OGBS”), a body that is an observer to FATF.

Since its creation in 1989, FATF has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. FATF originally drew up Recommendations in 1990. Since then, the Forty Recommendations have been revised twice, in 1996 and 2003, to ensure that they remain up-to-date and relevant to the evolving threat of money laundering. From time to time, the Forty Recommendations are extended by the issue of interpretative notes.

The Forty Recommendations set out a basic framework for anti-money laundering efforts and they are designed to be of universal application. They cover the criminal justice system and law enforcement, the financial system and its regulation, and international cooperation.

In early 2000 FATF issued Twenty-Five Criteria for Defining Non-cooperative Countries or Territories. These criteria are designed to ensure that international cooperation in the fight against money laundering is not impeded by detrimental rules and practices of financial centres.

In the autumn of 2001 FATF issued Eight Special Recommendations on Terrorist Financing and in October 2004 added a Ninth Special Recommendation. When combined with the revised Forty Recommendations, the Special Recommendations set out the basic framework to detect, prevent and suppress the financing of terrorism and terrorist acts.

Further information on FATF and its standards are available on its website at www.fatf-gafi.org.