Guernsey FSC Clarifies New FATF Money Laundering Requirements

by Jason Gorringe, Tax-News.com, London

05 July 2004

Following the issue of revised Recommendations by the Financial Action Task Force in 2003, the Guernsey Financial Services Commission has issued a statement on anti-money laundering standards for existing customers.

The statement requires financial services businesses to assess the risk of each business relationship and to make sure that they have customer due diligence information appropriate to the level of risk.

It allows businesses in the financial services sector to consider whether simplified or reduced information is appropriate for low risk businesses and lower risk customers.

This could mean for example, locally resident retail customers who have a relationship which is understood by the financial services business.

"The Commission has worked with the Guernsey Joint Money Laundering Steering Group, which contains representatives from across the finance sector, in developing this new statement,” explained Peter Neville, GFSC Director General.

“The statement extends the existing flexibility provided by the Commission's Guidance Notes on the Prevention of Money Laundering and emphasises that unnecessary demands on lower risk customers should be avoided," he added.

The Commission has said that it is not issuing more detailed recommendations at this stage on how the FATF standard should be applied in practice.

It has further announced that it intends to consult with industry over the coming months by way of observation during on-site visits and by way of discussions, to develop such recommendations for inclusion in the revised Guidance Notes.

A revised version of the Guidance Notes will be issued only after full consultation with industry and the other Crown Dependencies.

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