The clue is in the name

Singers sing, dancers dance, plumbers plumb – and directors direct.  But you cannot direct unless you know where you are going and (in overall terms) how to get there.  And I think too many directors have forgotten that their primary role is to provide such direction and guidance to their firms.  In the AML arena (and directors often don’t realise that they are in this particular arena, but of course they are) this means knowing the AML risks that are facing your firm, and deciding which ones are acceptable and what measures you will put in place to mitigate them.  In other words, directors are responsible for overseeing their firm’s AML regime, for signing off on its appropriateness and proportionality, while the MLRO is responsible for implementing it.  But how can the directors do this if they are ignorant of current money laundering and AML practices?  (One answer: they can read my very helpful book on AML for Guernsey directors.  Come on: if I don’t plug my own book, no-one else will.)

Directors are on my mind because of recent action taken by the Guernsey Financial Services Commission against a local director.  On 15 November, the GFSC issued a notice concerning Christopher Hubbard, formerly a director of the Ross Gower Group – providers of motor, home and travel insurance.  According to the notice, Mr Hubbard “allowed an individual, who had been charged with money laundering offences, to be a sole signatory on the bank account of a company controlled by Mr Hubbard, who was aware that the individual had been charged with the money laundering offences when he allowed the individual to become a signatory on the bank account”.  Oo-er – rather poor judgement, that.  Mr Hubbard has been fined £10,000 and banned from being a director or holding any compliance role (including that of MLRO…) for five years.

Far be it from me to crow, but this does rather make me wonder about Guernsey’s recent decision to remove general insurance from the AML regime (about which I blogged only last week – indeed on the very day of the GFSC notice *cue Twilight Zone music*).  If allowing those charged with money laundering to have control of bank accounts is the best due diligence we can expect from insurance companies when they are still in the regime, what will happen now that they have been released?

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

6 Responses to The clue is in the name

  1. Lloyd, Cathy \(Institutional, RBSI, Guernsey\) says:

    Hi Sue

    GFSC are on a roll this week. Another notice published this time a fine for Generali.

    Regards

    Cathy

    ________________________________

  2. Mike Veillard says:

    Surely it’s the MLCO, rather than the MLRO, that is responsible for implementing a firm’s AML regime? The MLRO’s function is purely concerned with the receipt and process of STRs.

  3. Ah Mike, you have fallen into my bear trap! The MLCO exists only in Jersey; everywhere else (including Guernsey and the UK), it’s all down to the MLRO.
    Best wishes from Susan

  4. Roy McCarthy says:

    Ah, I didn’t know that either! Like Mike I always thought an MLRO had a cushy number.

  5. It’s one of the little refinements that distinguishes one jurisdiction from another – such fun!
    Best wishes from Susan

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s