Guernsey Urges Vigilance Of Anti-Terror Financing Law

by Robin Pilgrim, LawAndTax-News.com, London

Tuesday, February 07, 2012

The Guernsey government has requested that financial institutions and other concerned entities check their records to ensure they comply with the Terrorist Asset-Freezing (Bailiwick of Guernsey) Law 2011, which came into force on January 25, 2012.

The Guernsey law gives effect to UN Security Council Resolution 1373 (2001), which was adopted at UN level following the terrorist attacks of September 11, 2001, in support of efforts to prevent terrorism financing.

The resolution contains asset-freezing provisions applicable to persons or entities designated by the Guernsey Policy Council, by the UK Treasury under section 2 of the Terrorist Asset Freezing etc. Act 2010, or by the European Union under Council Regulation (EC) No 2580/2001 of December 27, 2001. The Law also contains reporting obligations that apply to financial services businesses and which must be complied with 'as soon as practicable'.

Guernsey does not maintain its own list of asset freeze targets. However, all current asset freeze targets designated under the Terrorist Asset Freezing etc. Act 2010 or Council Regulation (EC) No 2580/2001 are included in the consolidated list of individuals and entities targeted for sanctions on the UK Treasury website.

A number of changes have also been made to the Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing and to the Handbook for Legal Professionals, Accountants and Estate Agents on Countering Financial Crime and Terrorist Financing. The principal changes are to the chapters on UN, EU and Other Sanctions.

Commenting on the impact for businesses, the Guernsey government stated: "It is the responsibility of financial institutions and other bodies and persons to comply with the Law. Firms should ensure that they have policies and procedures in place to ensure that they do so. Failure to identify and freeze the account(s) of designated persons may lead, for example, to funds being made available to or for the benefit of a designated person, which could constitute a breach of the Law. A breach of any of the prohibitions in the Law is a criminal offence carrying a penalty of up to 7 years imprisonment and/or a fine."