AML/CFT Notice – Financial Services Businesses

Financial services businesses should be alert to the potential for the increased movement of assets related to events in Bahrain, Egypt, Libya, Tunisia and Yemen and, potentially, other jurisdictions subject to significant unrest.  When assessing risks related to particular business relationships and occasional transactions, financial services businesses should consider that events in the above named countries may have a possible impact on patterns of financial and other activity.  Assets could potentially represent misappropriated or diverted state assets, proceeds of bribery, public corruption or other illegal payments. 

The Commission wishes to remind financial services businesses of the provisions of the Criminal Justice (Proceeds of Crime) (Financial Services Businesses) (Bailiwick of Guernsey) Regulations, 2007 and of the Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing. In particular, the Commission draws your attention to the requirements of regulations 3 and 5 of the 2007 Regulations.  Regulation 3 provides that a financial services business must undertake a risk assessment of any proposed business relationship or occasional transaction and regularly review that risk assessment so as to keep it up to date.  Regulation 5 includes a provision whereby a financial services business must carry out enhanced customer due diligence in certain circumstances.  Such circumstances include business relationships or occasional transactions in which the customer or any beneficial owner or underlying principal is a politically exposed person or which the financial services business considers to be high risk, taking into account any notices, instructions or warnings issued from time to time by the Commission. 

In accordance with the requirements of the Disclosure (Bailiwick of Guernsey) Law, 2007 and the Terrorism and Crime (Bailiwick of Guernsey) Law, 2002, if a financial services business knows or has reason to suspect that another person is engaged in money laundering or terrorist financing a disclosure must be made to the Financial Intelligence Service.  Financial services businesses are reminded that a suspicion may be based upon a transaction or activity which is inconsistent with a customer’s known legitimate business, activities or lifestyle or with the normal business for that type of product/service.  Suspicion need not only be based on transactions or activities within the business relationship, but also on information from other sources, including the media, intermediaries, or the customer himself. The reporting of suspicion is separate to the requirements of sanctions legislation.