One of my main arenas of AML activity is Guernsey, and life there is pretty exciting at the moment with the imminent arrival of new AML legislation and guidance – both already published and coming into force on 31 March 2019. There’s plenty of meat on those particular bones but what I want to discuss today is the unveiling of the new Guernsey MLCO. *Anorak alert: this post is for the nit-pickers amongst you.*
In the planning stages, there was talk of rebranding the MLRO in Guernsey as a FCRO – Financial Crime Reporting Officer. I was against this development for various reasons (no-one else will know what it means; it would be an alarming development for officers who would find themselves held legally responsible for knowing about all financial crimes and not just money laundering and terrorist financing; and it’s a bugger for me to say during training sessions) and thankfully the whole idea was dropped somewhere in the drafting process. Instead, the new set-up in Guernsey will be this: firms (now known as “specified businesses”) will be required to have a Money Laundering Compliance Officer, an MLRO and a Nominated Officer.
Now, it’s not a bad arrangement – and indeed the MLCO/MLRO double act has been used successfully for years in Jersey. In short, the MLCO (and I’m quoting here from the shiny new Handbook on Countering Financial Crime and Terrorist Financing) “is to have responsibility for the firm’s compliance with its policies, procedures and controls to forestall, prevent and detect money laundering and terrorist financing”, while the MLRO (and this is from the legislation) is “nominated by a specified business to receive disclosures”. And the Nominated Officer will “carry out the functions of the MLRO in that officer’s absence”. The MLCO and the MLRO can be the same person, but obviously the MLRO and the NO cannot. In short (Venn diagrams at the ready) you can have:
- Three people: MLCO, MLRO and NO
- Two people: MLCO/MLRO and NO
- Two people: MLCO/NO and MLRO
My only small niggle with the new arrangement is that the Guernsey NO is not the same as NOs in other countries. Under the UK’s Money Laundering Regulations 2017, for instance, the nominated officer is “a person who is nominated to receive disclosures” – i.e. it’s the actual legal term for the disclosing bit of the MLRO’s job. (In the UK we don’t have an MLCO at all – the person who’s called the MLRO generally does the nominated officer stuff plus what Guernsey’s MLCO would do.) And if you’re confused now, well, that’s my point: for firms operating across jurisdictions, it’s tricky when different job titles are used for the same work or – more dangerously for whoever has the title – the same title is used for different legal responsibilities. Why didn’t Guernsey go for “deputy MLRO” rather than the more loaded Nominated Officer title? Ah, the mysteries of legislators…