Guernsey: Changes To The Guernsey AML/CFT Handbook

Last Updated: 12 February 2019
Article by Marcus Leese, Tim Clipstone, Alex Horsbrugh-Porter and Chris Hards

The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) (Amendment) Ordinance, 2018 was approved by the States of Guernsey in December 2018 and is set to come into force on 31 March 2019.  The new legislation represents a substantial revision of Guernsey's anti-money laundering and countering financing of terrorism (AML/CFT) regime designed to satisfy the requirements of the 2012 Financial Action Task Force (FATF) and the Guernsey specific recommendations made by MONEYVAL in 2016. 

In November 2018, a final draft of the revised Handbook on Countering Financial Crime and Terrorist Financing (the Handbook) was published and for all practical purposes, this document will be the key reference for the local financial industry.

The GFSC has announced that in anticipation of the changes to the law it has already begun adopting the new rules to allow for technical issues which could lead to complications once the law is in force. Consequently, the new Handbook should already be the reference point for local business on all matters of AML/CFT and client due diligence (CDD).  In this briefing, we set out the key changes to the Handbook and the operational changes that will likely be required in order to comply with the new framework.

Corporate Governance

There are minimal changes to the corporate governance chapter of the Handbook generally, but it adds scope to maintain effective policies, procedures and controls.  Notably, the GFSC has opted not to implement FATF recommendations to require firms to have an independent audit function to test AML/CFT policies.  In a subtle change however, the previously named "financial crime compliance officer" has been replaced with the "money laundering compliance officer" (MLCO) and his/her duties amended from "having oversight" to holding "responsibility for policies, procedures and controls to forestall, prevent and detect money laundering and the financing of terrorism".  Furthermore, any person employed as MLCO needs to have the necessary "knowledge, skill and experience" rather than simply be "qualified".  Despite appearances, these are material changes; reinforcing the GFSC's determination to hold MLCOs accountable for failings in their respective businesses. 

Each firm must appoint an MLCO by 31 March 2019 and notify the GFSC of the appointment by 14 April 2019; however there is nothing in the new Handbook to prevent firms continuing to outsource this function.

Minor changes have also been made to the way firms may share information between subsidiaries and branches in a bid to ensure that Guernsey's most recent data protection law (drafted to be consistent with GDPR) takes precedence over the rules of the Handbook.

Risk-Based Approach

A significant change to the Handbook as a whole is the shift in focus towards a case-by-case determination of a firm's risk appetite as against the objectives of a firm's AML/CFT policies and the objectives of the law.  Guidance on risk-based assessments has been expanded to incorporate new concepts such as the accumulation of risk and weighting of risk factors which will assist in the assessment of each case.

Firms will need to ensure that their risk assessment policies are updated in line with the revised Handbook.  All matters rated high-risk as at 31 March 2019 are required to be reviewed by the end of 2020 (with all other matters reviewed by the end of 2021) and firms will be expected to subject these matters to on-going review under the revised approach.  Where firms utilise IT systems to determine risk-ratings, such systems must be fully understood to ensure that ratings are generated in accordance with the updated policies.

A firm's Business Risk Assessment (BRA) may also require amending to ensure that assessments made in respect of money laundering, the financing of terrorism and the proliferation of weapons of mass destruction are concluded separately and that all employees are informed of the BRA and risk appetite of the firm.  Each firm's BRA must be bespoke according to such firm's own risks and requirements.

Customer Due Diligence

Extensive additional guidance has been provided on the verification of identification documentation which each firm will need to ensure has been incorporated into their client take-on procedures.  The beneficial ownership provisions have also been extended but firms already compliant with the current requirements under the beneficial ownership of legal persons regime should have little difficulty in meeting the standard of the Handbook.

Enhanced measures replace additional CDD and are now required automatically for all relevant business that involves a non-Guernsey resident customer, banking services, a legal person or arrangement used for personal asset holding purposes and nominee share ownership and bearer share ownership.  There is substantial guidance on the steps required and the circumstances for which they apply in the Handbook. The aim however is risk mitigation and the move away from advanced levels of CDD only in high risk rated matters to ensuring the due diligence process can assist in an early understanding of each business relationship in every case.

One key development is the extension of the meaning of a "politically exposed person" (PEP) and the extension to domestic PEPs; firms will need to ensure that the new definition of a PEP follows through into their internal procedures to ensure that enhanced due diligence is carried out as required.  There is a welcome means of declassifying PEPs where certain conditions are met.  Further, whilst enhanced CDD will always be required in respect of foreign PEPs, when dealing with domestic PEPs, firms may rely on local guidance to aid the risk approach which will not always be so onerous.

Other provisions

Whilst the basics remain broadly the same, firms will be interested in the developments to the guidance on intermediary relationships; the reporting of suspicion; sanctions; wire transfers; employee screening and training; and record keeping and will need to ensure updated policies and procedures reflect the revised approach.

What do you need to do?

The GFSC have provided deadlines for businesses to implement the revised Handbook.  Businesses should take the view that the new approach is already in force but key dates to remember are as follows:

31 March 2019 – the revised law comes into force; MLCOs must be appointed by this date; and risk assessments must be prepared as soon as reasonably practicable thereafter. 

14 April 2019 – notification must be made by this date to the GFSC of MLCO appointment (and MLRO appointment, where such appointment has changed).

31 July 2019 (or four months following the publication of the National Risk Assessment, if later) – revised BRAs must have been approved by each firm by this date.

31 December 2020 – all high-risk business arrangements must be reviewed in accordance with the new Handbook by this date.

31 December 2021 – all remaining business arrangements must be reviewed in accordance with the new Handbook by this date.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions