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Guernsey To Modernize Due Diligence Processes

by Jason Gorringe, Lowtax.net, London
01 June, 2015

Guernsey's Financial Services Commission (FSC) has invited feedback on proposals to amend the territory's anti-money laundering and countering the financing of terrorism rules to modernize due diligence processes.

Firms are required to verify the identity and background of clients. These due diligence requirements – part of a framework sometimes referred to as Know Your Client (KYC) – are a vital part of the island's regime for preventing money laundering and the financing of terrorism.

The change will allow electronic certification, which will require the customer to present themselves, together with their physical documentation verifying aspects of their identity, to a suitable, independent third party individual. That third party would then validate that they have both seen the documentation verifying identity and confirm that the customer is the person depicted within the documentation provided.

The FSC explained that technology is changing traditional methods of undertaking due diligence. It reported that the financial services industry had called for alternative, cost effective, and more customer friendly options such as the ability to capture and deliver due diligence information through the internet, or through tablet or smartphone applications.

The consultation paper describes the Commission's proposals to allow such means of verification in a way that maintain appropriate oversight. Comments are invited by July 31, 2015.

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