On 1 March 2019, the GFSC issued the new Handbook on Countering Financial Crime and Terrorist Financing (the “Handbook”), to assist firms comply with the Bailiwick’s legislation concerning money laundering, terrorist financing, financial crime and related offences.
The new Handbook is effective 31 March 2019 and applies to all ‘specified businesses’, including financial services businesses and prescribed businesses.
As part of the changes introduced by the new Handbook, the GFSC has set the following key deadlines for organisations:
*Dates will be subject to change, as deadlines are +4 and +7 months respectively from the date of the National Risk Assessment’s publication, which has been delayed from original date of 31 March 2019
This year entities in scope will have to consider a number of new requirements for their business, including;
Appointment of MLCO
A Money Laundering Compliance Officer, must be appointed. This individual, who must be resident in the British Islands, is responsible for oversight of the AML/CFT framework and the organisation’s compliance with the Handbook.
Increased focus on the Risk-Based Approach
An explicit requirement has been added for organisations to separately consider their terrorist financing risk in their Business Risk Assessment.
In doing so, organisations must consider their risk appetite and the risks and vulnerabilities as detailed in the National Risk Assessment, which is due to be published in Q1 2019.
Enhanced measures, particular to higher risk factors, must now be applied to:
The Handbook’s definition of PEPs, now includes ‘domestic PEPs’. There is no mandatory application of enhanced CDD for domestic PEPs, however, organisations must consider whether the individual is considered high risk and document their decision accordingly.
The Handbook provides guidance for declassifying foreign, international organisation and domestic PEPs.
The Handbook implements the three-step test of beneficial ownership to consider control, not only through controlling ownership interest, but also through other means of control or positions held in the organisation.
The Handbook implements measures to limit the use of intermediary relationships in regards to CDD for Collective Investment Schemes.
The Advisory team at KPMG in the Channel Islands are available to assist with mapping your policies to the new Handbook or other ad hoc advice regarding the operationalising of the new requirements.