As regular readers will know, I have a great fondness for Guernsey. It has a mild climate, lovely scenery, excellent food – and a rather admirable AML regime. (That last bit doesn’t make it into the VisitGuernsey brochures or telly ads, but it matters a lot to me.) In many respects, the Guernsey AML regime takes a more pragmatic, more workable and indeed more demanding approach than that of the UK. But in one key area the Guerns have it wrong, and those who are reading this will know what I am going to say. Yes, it’s their definition of PEPs. Well, not the definition exactly, but rather their longevity.
As was first suggested by the Third Money Laundering Directive *wavy lines to suggest time shift back to 2005* and then confirmed by the Fourth one, PEPs can be de-PEPped when they have been out of power for a year. Or, to put it in official terms: “Where a politically exposed person is no longer entrusted with a prominent public function by a Member State or a third country, or with a prominent public function by an international organisation, obliged entities shall, for at least 12 months, be required to take into account the continuing risk posed by that person and to apply appropriate and risk-sensitive measures until such time as that person is deemed to pose no further risk specific to politically exposed persons.” Now I have talked before about how I don’t think a year is quite long enough, and how – if they’d bothered to ask me, which they didn’t – I would have advised, say, five years. And I have also said that I think the Guernsey approach (shared by Jersey and the Isle of Man) is barking: in those three jurisdictions, it’s once a PEP, always a PEP, with only the shuffling off of the mortal coil putting an end to the EDD.
And so it was with feverish anticipation that I clicked on the draft amendment to Guernsey’s AML legislation that was issued last week for consultation. I’m leaving the real excitement of a close read and a red pen mark-up until Friday (I used to be a schoolteacher, and always have a red pen to hand) but I couldn’t resist a peek at the PEPs. In all honesty, I had fully anticipated the ditching of the eternal PEP – but then I thought we’d vote Remain and that the Americans would choose Clinton. And indeed my unerring streak of mis-prediction continues, for there it is in the draft amendment: “’politically exposed person’ means… a person who has, or has had at any time, a prominent public function…” I may need a really thick red marker for this one.