CONTACT - Guernsey Chamber of Commerce

world
regulations change, and ensured
staff are adequately trained to
understand the reasons why the rules
and controls are in place. Sadly this
is not always the case (thankfully
for those of us who are compliance
and regulatory consultants!).
Most licensed businesses fully
understand the need for regulations
and have introduced suitable
procedures and training to ensure their
business is operating to acceptable
standards. these businesses may
slip up occasionally, but generally
any failings are minor and can be
rectified quickly without undue
problems. these firms do not
require undue scrutiny or heavy
oversight from the regulators,
with the original light regulatory
touch being more than adequate.
Unfortunately there are still several
local businesses which continue to
ignore many of the basic requirements
and cannot demonstrate consistent
adherence to the required standards.
these are the businesses which risk
falling foul of the regulators. this is
where the compliance officer comes
in, but where in many businesses
further problems can arise.
ideally the compliance officer is
employed by the business to assist
the directors and management in
introducing adequate procedures,
then ensuring staff follow the
procedures at all times. this will
involve the compliance officer
running occasional spot checks on
key aspects of the operation and
controls in place, ensuring suitable
training is in place, but otherwise
the compliance officer will not get
involved in carrying out operations,
processing of transactions etc.
Some compliance officers do
however tend to get sucked into the
depths of the operation, which can
and does often cause problems for
the business, creating duplication of
work, bottlenecks and delays. this
is not an ideal practice where the
effective result can be the compliance
officer is effectively overseeing
his own adherence to the rules.
Sometimes compliance needs to
trust the other areas of the business.
any change in the firm’s business
model, introduction of new services
etc. will prompt the compliance officer
to propose amended procedures and
controls, thus ensuring the business
continues to operate within the
applicable rules and regulations.
this is particularly relevant in
the constant fight against money
laundering in all of its guises.
Guernsey has been operating
under money laundering control
regulations for some 10 years now,
but it is surprising how many firms
still appear to be confused in the basic
requirements expected under the
original 1999 law and subsequent
regulations, rules and guidance from
the commission, in particular the
major overhaul which took place
in December 2007 and has been
a significant focus ever since.
the basics are very simple: identify
who you are dealing with, verify
they are who they say there, and run
some checks and continue to monitor
transactions to make sure as far as is
possible that your firm is not being
exploited by criminals for the cleaning
up of their dirty money/proceeds of
crime, or being used by terrorists in the
financing of their terrorist activities.
oh, and by the way tax evasion is a
crime, and is also caught under the
general money laundering regulations.
You would have thought that by
now everyone involved would fully
understand the requirements, the need
for adequate due diligence on their
clients and associates, and would
be keeping adequate documents to
demonstrate that everything is in
order. this is not always the case,
and all too often we see significant
deficiencies in this area, which
not surprisingly is a high priority
for the regulators, who appear to
have run out of patience if recent
events are anything to go by.
it is hard to criticise the regulators
in their diligence in trying to ensure
Guernsey continues to adhere to,
and can demonstrate adherence to,
acceptable international standards.
after all, that is their job. Where they
can be criticised perhaps is in their
sometime excessive approach to the
matter, and seeming determination
to make Guernsey the best of the
best, when other comparable
jurisdictions, including Jersey and
the UK, do not go quite so far.
Back to the perfect world. a
financial world where laws and
regulations are fair and fully
understandable, the regulators
‘Where would we all be without the local
regulator the Guernsey Financial Services
Commission to keep us all in order?’
oversee the industry with a
reasonably light touch in general
but a heavier hand where deserved,
and the compliance officer’s life is a
simple one of occasional monitoring
and fine tuning of procedures as
required. a world where company
directors fully understand their
obligations, and can demonstrate
their understanding at all times (the
planned new codes of corporate
Governance may help in this regard).
all of this can be achieved
without an excess of regulations
provided all parties agree, and then
adhere to proper standards. We are
not there yet, and unlikely to ever
be there, but then, when has the
financial world ever been perfect?
www.guernseychamber.com | OCTOBER/NOVEMBER 2010 | CONTACT | 41