Leaving the AML club

A little while ago, Guernsey followed the lead of various other countries and removed general insurance from its AML regime.  As explained on the FAQ page of the Guernsey Financial Services Commission’s website: “Intelligence and information in the jurisdiction identified that there was a very low risk of general insurance products being used to launder the proceeds of crime or terrorism.  As a result, amendments were made to the relevant legislation so that the AML/CFT requirements in the [AML] Regulations and the Handbook would no longer apply to general insurers.”

As someone who is always campaigning for the extension of the AML regime rather than its contraction, I find this disappointing.  As I see it, this change will result in the creation of an unnecessary risk (that criminals will return in droves to using general insurance products for their laundering) in return for very little reduction in effort.  For, as the GFSC FAQs further elaborate: “Despite the above amendments, general insurers must still comply with the requirements in other financial crime legislation [including] the disclosure requirements of the Disclosure (Bailiwick of Guernsey) Law, the Terrorism and Crime (Bailiwick of Guernsey) Law and the Drug Trafficking (Bailiwick of Guernsey) Law.  General insurers must also continue to comply with the requirements, reporting and restrictions imposed by the UN, EU and other bodies concerning sanctions [and with] the Prevention of Corruption (Bailiwick of Guernsey) Law.”  I might be being dense here, but if general insurers are required to report suspicions, check their client lists for sanctions matches and look out for corruption, won’t this mean that they will have to do the same CDD, record-keeping, reporting and staff training as with AML?  It might be called something else but it’s pretty much the same process, so why not get a double win and use it for AML as well, thus reducing that risk of criminals returning to general insurance?  Plus, of course, those providing general insurance would be able to continue doing what they could do until recently, and that everyone else in the regulated sector is still doing, and – when their customers complain about having to answer questions and supply documents – blame the whole lot on AML.

This entry was posted in AML, Legislation, Money laundering and tagged , , , , , , , . Bookmark the permalink.

9 Responses to Leaving the AML club

  1. Nikki Neal says:

    I wonder if any other Bailiwick residents really resent their hard-earned taxes being used to bankroll the sort of f*ckwit idiot who actually dreams up such little gems as the “GFSC FAQs”.

    whateve happened to the application of commonsense?

  2. Hello Nikki
    Not sure that it’s tax money – isn’t the Commission funded by fees from the regulated? – but I take the point. That said, a couple of the points raised in the other FAQs did need clarification.
    Best wishes from Susan

    • Nikki Neal says:

      whether directly or indirectly, it’s always the poor suckers like me at the bottom of the foodchain who end up paying for the idiocy of the idiots higher up said food chain. what ever happened to “wealth creation”?

  3. Roy McCarthy says:

    Hello Nikki! Best get to be one of those higher up the food chain then 🙂 Susan I see every logic in loosening the regs as regards low/no risk areas. As you say they still have an everyday duty – as do we all – to be vigilant.

  4. Nikki Neal says:

    hi Roy, long time no hear!

    actually, have already tried life higher up the food chain, but from bitter experience have discovered that, actually, (a) the view is better when you’re sat right at the bottom, and (b) it’s way, WAY more fun hanging out there…

  5. Hi Roy
    I just wonder whether – for an MLRO – it is easier to get budget from management and buy-in from staff if the requirement is to comply with AML Regs, rather than “everyday duty”?
    Best wishes from Susan

  6. Nikki Neal says:

    would wholeheartedly agree with you, Susan – anything which distracts a business from its core focus has to be a bad thing. if hoop-jumping is the order of the day, well, then outsourcing has to be the most cost and time efficient way to fulfil the need.

    it ain’t “wealth creation” for sure, but if it feeds families, then who cares?

  7. An interesting development: http://www.gfsc.gg/The-Commission/News/Pages/Mr-Christopher-William-Hubbard.aspx
    Mr Hubbard was a director of Ross Gower Group Limited, insurance specialists.

  8. Pingback: The clue is in the name | I hate money laundering

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