1. GUERNSEY TO ADOPT NEW ANTI-MONEY LAUNDERING FRAMEWORK
The consultation period in respect of the proposed changes to the laws and guidance covering money laundering and terrorist financing closed on 11 June 2007. The package of proposals aims to address the specific recommendations issued by the Financial Action Task Force on money laundering.
In the second half of 2007, Guernsey will introduce new Regulations, updating and amending various “Regulatory Laws” in addition to issuing a new “Handbook”. The previous Guidance Notes were just that. The new Handbook will be a combination of Commission rules, which will be subject to regulatory sanction, and guidance which will present ways of complying with the 2007 regulations and rules.
The intention is to require financial services businesses to adopt a risk based approach to their policies, procedures and controls in relation to AML matters taking into account, amongst other things, its customers and product range.
The risk based approach has three significant features:
- It will allow local licensees to adopt a “lighter touch” to “low risk customers” and conversely enhanced customer due diligence for high risk categories of customer, product or transaction.
- Financial services businesses will be required to regularly address the regulations and Handbook (and issues arising from them and their customer base) at board level.
- The new risk based approach will also enable greater efficiencies with introduced intermediary business which will allow intermediary relationships to be established for a range of transactions and activities and for these relationships to be treated as low risk relationship ensuring easier account opening procedures.
Guernsey’s new draft Trust Law has been the subject of much scrutiny and debate over the last 12 months and it is anticipated that the new Law will be introduced in the latter part of 2007. In particular, the following areas have been addressed:
- Trusts for non-charitable purposes (section 12).
- Reservation or grant of powers by or to settlor or third parties (section 15).
- Duration period (section 16).
- A duty to provide information to beneficiaries (section 26).
- The ability to issue powers of attorney (section 34).
- Power to effect professional indemnity insurance (section 35).
- Non-disclosure of deliberations etc (section 38).
- Provision of non-possessory liens following the change of trustees (section 44).
- Limitation and prescription periods (section 74).
- Removal of individual liability of directors of a corporate trustee (section 82 – removal of old section 70).
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