A report on Guernsey's financial sector has called into question the effectiveness of the island's anti-money laundering provisions.
In what was otherwise positive feedback from a 2010 International Monetary Fund inspection, the report cited a "disconnect" between the number of money laundering cases investigated and the number of prosecutions and resulting convictions.
The report said: "The law enforcement authorities are adequately resourced and trained and have a sufficient legal arsenal at their disposal to effectively conduct a money laundering investigation, but still the results are modest.”
The IMF warned that that this approach could lead to Guernsey becoming over reliant on foreign enforcement bodies to investigate cases within its own borders.
The IMF also believed Guernsey could do more to identify what it called “high risk customers”, who should be subject to greater due diligence checks. Reliance on introducers such as UK lawyers and accountants to vet such customers was not enough, the report said.
According to the IMF, financial institutions should also be subject to potentially greater fines from the local regulator, the GFSC. The current top level cap of £200,000 was not “dissuasive or proportionate” in terms of financial companies breaking local rules.
Source: The Telegraph