Financial Crime Handbook Consultation

The Commission is undertaking a short consultation on changes proposed to rules and guidance in the Handbook on Countering Financial Crime and Terrorist Financing (version issued on 1 March 2019).  This follows the publication on 7 May 2019 of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) (Amendment) Regulations, 2019 (“the Amendment Regulations”) made by the Policy and Resources Committee, proposing changes to Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 as amended.

These amendments introduce an activation date of 31 March 2019 for the application of measures relating to domestic politically exposed persons (“domestic PEPs”) and change the legal definitions of Money Laundering Compliance Officer (“MLCO”) and Money Laundering Reporting Officer (“MLRO”).  There are also a small number of amendments correcting typographical errors.  The Amendment Regulations will be laid before the States of Guernsey on 12 June 2019 and, if approved, will come into force the following day.  The Amendment Regulations are available via the below link:

https://www.gov.gg/article/171523/The-Criminal-Justice-Proceeds-of-Crime-Bailiwick-of-Guernsey-Amendment-Law-2019

The amendments introduce the following changes:

1. An activation or start date of 31 March 2019 for domestic PEPs, whereby the provisions for identifying a domestic PEP and considering the implication of them having held political office as part of a relationship risk assessment do not apply if the individual ceased to hold a prominent public function in the Bailiwick before 31 March 2019.  This has been introduced to ensure the proportionate application of measures which apply to domestic PEPs, relative to the risks associated with such persons.
2. A revised definition of the MLCO role to reflect that the role is to monitor a specified business’s compliance with its policies, procedures and controls.  It replaces the current definition which refers to “responsibility” which was being interpreted as a director-level appointment by some firms.
3. A revised definition of the MLRO role to include “make” as well as “receive” disclosures of suspicious activities or transactions.  This change aligns the definition of MLRO with the terminology used in the Disclosure and Terrorism and Crime Laws.

Outside of these changes the Commission, following discussion with relevant private sector parties, is proposing a very small number of changes to rules and guidance on collective investment schemes traded on a recognised stock exchange and to guidance on employer funded benefit and pension schemes.  These changes can be found in Sections 4.8.3. and 7.12.2. respectively.

All proposed changes to the rules and guidance are redlined in the draft revised version of the Handbook, available here.

The Commission is inviting comments on Sections 2.8.1., 2.8.2., 4.8.3. and 7.12.2. of the Handbook, which should be submitted to [email protected], by no later than 5pm on Tuesday 21 May 2019.