Strengthened anti-money laundering oversight for directors in Guernsey & Jersey

In response to the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) visits in 2014 and 2015, Guernsey and Jersey have implemented significant changes to enhance the accountability of directors in combating financial crimes. The upcoming 2023/2024 evaluations prompted the Jersey Financial Services Commission (JFSC) and the Guernsey Financial Services Commission (GFSC) to introduce stricter measures for directors, focusing on anti-money laundering (AML), counter-financing of terrorism (CFT), and counter-proliferation financing (CPF) obligations.

What are the anti-money laundering regulatory frameworks in Guernsey & Jersey?

Acting as a director for any company, regardless of jurisdiction, is a regulated activity requiring authorisation from the JFSC or GFSC in the Bailiwicks of Jersey or Guernsey. Both jurisdictions, however, have exceptions to this rule. Guernsey's 'up to six' exemption and Jersey's Part 1 of para.13 of the schedule provide allowances for individuals to act as directors for a limited number of companies without requiring a regulatory license.

How have the AML regimes been strengthened in Guernsey & Jersey? 

Guernsey's Directors Registration Regime (DRR)

In July 2023, the GFSC introduced the DRR for individuals utilising the 'up to six' exemption. Directors falling under the DRR are now subject to supervision for compliance, reduced AML/CFT obligations, and are required to register, pay fees, and submit annual returns detailing solvency and directorships.

Jersey's amendments to Schedule 2

As of January 30, 2023, amendments to Schedule 2 of the Proceeds of Crime (Jersey) Law 1999 expanded AML/CFT/CPF obligations, removing the up-to-six exemption for personal directorships. Directors acting in a personal capacity must now register with the JFSC, undergo risk assessments, establish policies and procedures, and conduct regular reviews of business risks.

What are the personal responsibility obligations for Jersey & Guernsey directors?  

Directors in both jurisdictions now bear the responsibility of understanding their legal and regulatory obligations. This includes assessing their competence, resources, and expertise to carry out director services, conducting due diligence on client companies, and responding to information requests from regulators. While the burden has increased, both regulators emphasise a pragmatic, risk-based approach, providing guidance on their websites.

What are the key takeaways from the strengthened AML measures for Jersey & Guernsey?

Guernsey and Jersey's regulatory changes exemplify their commitment to adhering to FATF recommendations. The updated regimes signal a proactive stance on international compliance with AML, CFT, and CPF regulations. The message is clear: compliance is a growing responsibility for professionals, and directors acting in a personal capacity are now part of this evolving landscape.

For more information on the regulatory changes reach out to Newgate Compliance (Channel Islands) Limited team today.