Guernsey Registered Directors only [less than 6] AML rules

Individuals registered with the Commission under the director registration regime are subject to a reduced set of anti-money laundering and counter-terrorist financing (“AMLCFT”) obligations which reflect the limited scope of their activities.

They are not required to undertake business and customer risk assessments, and they are not required to have policies and procedures as the only regulated activity they can carry out under their registration is acting as a director, which is restricted to no more than six directorships.

This limits their exposure to money laundering and terrorist financing risks compared to most other financial services and prescribed businesses (legal professionals, accountants and estate agents).

This guidance is intended for use by registered directors only [Registered directors refers to individuals registered under Schedule 5 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999]

Other individuals and firms licensed or registered by the Commission can undertake a wide range of regulated activities not capped in law to a few appointments.

Therefore, the money laundering and terrorist financing risks they present cannot be regarded as sufficiently low to support a reduction in their AMLCFT obligations.

A registered director is subject to the following requirements of Schedule 3 of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999:

1. Money laundering and terrorist financing risk understanding (paragraph 1(3) of Schedule 3)
2. Customer due diligence (paragraph 4 of Schedule 3)
3. Enhanced customer due diligence (paragraph 5 of Schedule 3)
4. Customer due diligence for low-risk relationships (paragraph 6 of Schedule 3)
5. Timing of identification and verification (paragraph 7 of Schedule 3)
6. Accounts and shell banks (paragraph 8 of Schedule 3)
7. Non-compliance with customer due diligence measures (paragraphs 9 of Schedule 3)
8. Monitoring transactions and other activity (paragraph 11 of Schedule 3)
9. Reporting suspicion (paragraph 12 of Schedule 3),
10. Training (paragraph 13 of Schedule 3) and
11. Record-keeping (paragraph 14 of Schedule 3)

The following requirements of Schedule 3 have BEEN DISAPPLIED:

1. Understand risk, assess and mitigate risk (paragraph 2 of Schedule 3)
2. Risk assessments (paragraph 3 of Schedule 3)
3. Introduced business (paragraph 10 of Schedule 3) and
4. Compliance and corporate responsibility (paragraph 15 of Schedule 3)

This guidance

• covers the requirements of 1 to 4, and 8 to 11 above as well as a section on sanctions as these are the main obligations a registered director will deal with.
• is for the benefit of those registered directors who may not be familiar with financial services practices, and whose directorships are of companies with straightforward ownership structures and clear and easily understood economic purposes.
• is intended to show in practical terms how they can comply through fulfilling the duties they owe the company as a director.

Registered directors who are on boards of companies holding and/or managing high-value assets for the companies’ beneficial owners in situations which would generally be regarded as private wealth management or under a “family office” arrangement should refer to the Handbook on Countering Financial Crime and Terrorist Financing (“the Handbook”) to ensure that the relevant legal provisions and rules are being applied.

This is because these are companies that can hold high-value assets such as property, investments, art, aircraft and boats, that may hold the beneficial owner/s’ trading or operating companies, that may undertake activities on a cross-jurisdictional basis and whose ownership may be within a corporate structure and/or a structure including trusts, which may have corporate directors and nominee shareholders. These factors, singly or combined, can increase the risk of money laundering and terrorist financing.

Individuals with a directorship of a company owned by a foreign politically exposed person or connected to Iran, North Korea or Myanmar , should also refer to the Handbook.

This guidance takes account of the types of companies registered directors serve.

READ THE DRAFT GUIDANCE https://www.gfsc.gg/sites/default/files/media/helix-file/20230809%20-%20AMLCFT%20guidance%20for%20DRR.pdf