As part of the Bailiwick of Guernsey's long-term commitment to preventing and eliminating money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction (financial crime), a national strategy to combat financial crime has been published.
A report on the findings of the Bailiwick of Guernsey's second National Risk Assessment (NRA) of the money laundering and terrorist financing risks presented by individual sectors and products within the jurisdiction, and the jurisdiction's first assessment of its risks in relation to the financing of proliferation of weapons of mass destruction, has also been published.
National Strategy for combatting money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction:
The Bailiwick of Guernsey's long-term commitment to preventing and eliminating financial crime has been reflected in its determination to keep abreast of and implement relevant international standards, principally those of the Financial Action Task Force (FATF). For more than 20 years the Bailiwick has committed itself to meeting the FATF standards.
Guernsey, Alderney and Sark liaise closely. This is underpinned by the fact the Policy & Resources Committee, the Committee for Home Affairs, and the Committee for Economic Development of the States of Guernsey; the Policy & Finance Committee of the States of Alderney; and the Policy & Finance Committee of the Chief Pleas of Sark are jointly issuing the National Strategy.
The National Strategy includes:
a risk assessment and risk appetite statement; and,
a description of the Bailiwick's strategic priorities (pillars) for the implementation of the FATF standards.
The vision provides the overall direction of travel while the risk appetite defines what risks are acceptable and which are not. Together, the vision and the risk appetite inform the strategic pillars.
National Risk Assessment
The Bailiwick of Guernsey has carried out its second NRA of the money laundering and terrorist financing risks presented by individual sectors and products within the jurisdiction. The first NRA (the report on which was published in January 2020) was based on an International Monetary Fund methodology. The second NRA has developed the first NRA based on the further knowledge and findings of the authorities, informed by regional and local developments. In addition, the Bailiwick of Guernsey has carried out its first assessment of the risks of financing of proliferation of weapons of mass destruction.
As with the first NRA, the finding of the second NRA with regard to money laundering risks is that, as an international finance centre with a low domestic crime rate, Guernsey's greatest money laundering risks come from the laundering of the proceeds of foreign criminality. The money laundering risks from domestic criminality, while much lower, primarily arise from drug trafficking and fraud.
Also consistent with the first NRA, the finding of the second NRA with regard to terrorist financing risks is that the greatest risks come from the jurisdiction's cross-border business being used to support foreign terrorism, by funds being passed through or administered from Guernsey. However, this risk is much lower than the money laundering risks. The assessment of the risks of financing of proliferation of weapons of mass destruction finds that the risks are the same or lower than the jurisdiction's terrorist financing risks.
Deputy Lyndon Trott, President of the Policy & Resources Committee, and Guernsey Finance Chairman said:
“It is worth noting that there is no requirement within the FATF standards to publish a national strategy but, nevertheless, the five committees issuing this document on behalf of their respective governments consider it important to articulate the Bailiwick's position publicly and transparently for the benefit of domestic and international stakeholders. The aim in doing this is to emphasise that public and private sectors alike are working to a common purpose - and by doing so to deter criminals from using the Bailiwick for their activities.
“We are reaffirming the Bailiwick's commitment to meeting the FATF standards and continuing both to strive to meet existing best practice and to develop new best practice where the Bailiwick can add value. As criminals adopt new approaches, and as global expectations change on what best practice looks like, the Bailiwick is committed to continually investing in and enhancing the controls protecting us from criminal abuse and contributing to the prevention and detection of financial crime outside our borders.”
Deputy Rob Prow, President of the Committee for Home Affairs, said:
“All elements of our national strategy align with the findings of our latest National Risk Assessment, on which we have also published a report. As a jurisdiction, we remain absolutely committed to meeting our international obligations and doing everything we can to prevent and eliminate money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.
“We have robust governance structures in place to ensure that the National Strategy is delivered. This includes a strategic coordination forum, chaired jointly by the President of the Committee for Home Affairs and the President of the Policy & Resources Committee, and comprising operational leads from a range of services.”