Crown Dependencies Tighten Anti-Money Laundering Defences

Joint action by Guernsey, Jersey and the Isle of Man

Strong new measures to tighten the Crown Dependencies' anti-money laundering regimes were announced today by the three financial services regulatory Commissions. The Commissions are taking action in concert and will be moving to implement the required changes to laws and guidance to reflect these measures.

All three Islands have tough anti-money laundering measures currently in place - described by an international evaluation team (including representatives from the US, France and the UK) as already being "close to complete adherence" to the Forty Recommendations of the Financial Action Task Force. The new measures announced today include three main features: In addition to being required to know their own customers, banks and other institutions will be required to look beyond their customers (for example, when they are trusts or companies) to establish the principals behind them.

The new measures tighten up the requirements on banks and other institutions to ensure that due diligence is done properly - even where the customer is referred to them by another institution which claims to have carried out the background checks already.

All institutions will be required to embark upon a progressive risk prioritised programme to bring the records of existing accounts up to current standards (where there are deficiencies in information and documentation held), if the nature of the client or transaction meets certain criteria.

A number of other measures, designed to clarify and remove ambiguities and differences in standards between the Islands are also included.

The new measures, which follow consultation in 2000 and 2001 with their respective financial services industries, are in response to previous suggestions made by the international evaluation team in 1999, and in 2000 by the Financial Action Task Force. The measures also reflect a commitment to remove opportunities for arbitrage between the Crown Dependencies in areas related to financial crime, money laundering and terrorist funding.

In a joint statement the Directors General - Peter Neville for Guernsey, John Aspden for the Isle of Man and Richard Pratt for Jersey, said:

"We are determined to ensure that the success of our finance centres in attracting honest money does not open up opportunities to criminals, terrorists or corrupt leaders and their associates. This document is an important milestone in our joint commitment to achieve this aim. By establishing a common platform between our three jurisdictions, we demonstrate our determination to ensure that our finance industries continue to meet international standards. The finance industries in the three Islands are being asked to invest in their own future by putting in place a regime which any clear-thinking and honest client will understand and welcome."

For a further information, please visit the Jersey Financial Services Commission website at www.jerseyfsc.org