At its annual general meeting this month the Offshore Group of Banking Supervisors approved an in-depth evaluation which endorses the Bailiwick's anti-money laundering systems.
The evaluation reviewed Guernsey's compliance with the 40 Recommendations issued by the Financial Action Task Force on Money Laundering and was carried out in 1999 by independent experts from France (law enforcement expert), Malta (financial expert), the United Kingdom (financial crime expert) and the United States of America (legal expert). The summary of the investigating team's report, including its recommendations, is available here.
The evaluation team's report considers that:-
- The Guernsey authorities have constructed a comprehensive anti-money laundering system.
- The standards set by Guernsey are close to complete adherence to FATF's 40 Recommendations.
- The Bailiwick of Guernsey, encompassing Guernsey, Alderney and Sark, has in place a robust arsenal of legislation, regulation and administrative practices to counter money laundering.
- In the steps they have taken to deter and detect money laundering, the authorities have demonstrated the political will to ensure that their offshore financial institutions and the associated professionals, maximise their defences against criminal funds.
- The Guernsey authorities are determined to co-operate effectively in international investigations into criminal funds.
- The Guernsey authorities have a positive record of co-operation with overseas requests for assistance, on both regulatory and criminal matters.
- The system of financial regulation is comprehensive and effective and the Guernsey Financial Services Commission can employ wide-ranging sanctions for non-compliance.
- The Fiduciary and Administration Businesses Law will place Guernsey at the forefront of international efforts to prevent the abuse of company structures for criminal purposes.
Peter Crook, Director General of the Guernsey Financial Services Commission, stated:-
"This report was also considered by FATF during that body's review of non-co-operative countries and territories and, to some extent, its conclusions have already been overtaken. It clearly contributed to FATF's conclusions in its report, published in June 2000, that Guernsey is co-operative in the fight against money laundering.
The OGBS report follows closely on the heels of the G7 Financial Stability Forum's review and conclusion that Guernsey is a Group 1 jurisdiction for its financial regulation and anti-money laundering systems. The Bailiwick's anti-money laundering systems were also endorsed by a United Kingdom Home Office review in 1998 which not only described Guernsey as being in the top division of offshore finance centres but also as possessing anti-money laundering legislation better than that of most EU and FATF countries.
Some of the specific suggestions set out in the summary of the OGBS report have already been satisfied. All of the report's suggestions are being addressed and the Commission and the other authorities in Guernsey are taking steps to ensure complete compliance with FATF's 40 Recommendations. New legislation will enable the Bailiwick to ratify the Vienna Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the Council of Europe Convention on Laundering, Seizure and Confiscation of the Proceeds of Crime. In addition, in the autumn the Commission will be issuing a consultation paper setting out proposals on a number of technical anti-money laundering matters.
However, we cannot be complacent. Global anti-money laundering standards will continue to evolve and all of the authorities in the Bailiwick are committed to ensuring that Guernsey remains at the forefront of the international fight against financial crime."
Enquiries to: Peter Crook, Director General
Tel - 44 1481 712706
Fax - 44 1481 712010
E-Mail - [email protected]
The Offshore Group of Banking Supervisors
The Offshore Group of Banking Supervisors ("the OGBS") was established in 1980 as a forum for supervisory co-operation between the banking supervisors in offshore financial services. Current members of the Group are:- Aruba, Bahamas, Bahrain, Barbados, Bermuda, Cayman Islands, Cyprus, Gibraltar, Guernsey, Hong Kong, Isle of Man, Jersey, Labuan, Malta, Mauritius, Netherlands Antilles, Panama, Singapore and Vanuatu.
The group meets annually. In years when the International Conference of Banking Supervisors is held, it meets at that conference's venue, in other years at a location in one of the jurisdictions represented in the group.
Guernsey was a founding member of the OGBS. It is a useful forum where offshore centres can make their views known and compare experience with like minded centres. It also enables concerns to be passed to the Basel Committee. One such example is the working group made up of Basel Committee and OGBS members. This working group has produced papers on the supervision of cross-border banking and continues to provide input and put forward proposals. The Director General of the Guernsey Financial Services Commission is a member of this joint working group.
The Financial Action Task Force on Money Laundering
The Financial Action Task Force on Money Laundering ("FATF") is an inter-governmental body, set up in 1989, whose purpose is the development and promotion of policies to combat money laundering - the processing of criminal proceeds in order to disguise their illegal origin. These policies aim to prevent such proceeds from being utilised in future criminal activities and from affecting legitimate economic activities.
Membership of FATF is by invitation only. Whilst Guernsey is not a member, it has formally subscribed to the standards set by FATF.
FATF currently consists of twenty-nine countries and two international organisations. The twenty-nine FATF member countries and governments are: Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States of America. The two international organisations are the European Commission and the Gulf Co-operation Council. The Offshore Group of Banking Supervisors is one of several bodies which is affiliated to FATF.
FATF originally drew up Recommendations in 1990. In 1996 the Forty Recommendations were revised to take into account the experience gained over the previous six years and to reflect changes in the global money laundering environment. 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 co-operation.
In early 2000 FATF issued Twenty-Five Criteria for defining non-co-operative countries or territories. These criteria are designed to ensure that international co-operation in the fight against money laundering is not impeded by detrimental rules and practices of financial centres.
Summary of the Offshore Group of Banking Supervisors Mutual Evaluation Report of the Anti-Money Laundering System in Guernsey - here