Our monthly roundup of news, events and sponsor reading material.

Members' Area

Please note that the password to access your Members' Area page on the GAT website is "Trustees".

The Members' Area will develop over time, and will be populated with consultation responses and papers / advice issued by GAT and / or the Technical Committee.

Please note:  GAT responses to the following consultation papers have been added to the Members' Area for your information:

• Statutory Instruments proposed to be re-issued
• Proposed replacement of the current Fiduciary Rules, 2020 by the new Fiduciary Rules, 2021
• Ancillary Vehicles

Message from the Chair

August is a quiet month for industry events.  Looking ahead, on Thursday 16th September GAT/STEP are co-hosting a special lunchtime presentation by Richard Walker entitled 'Moneyval 2023/2024 - What to Expect.' Further details are below. 

Our next GAT luncheon is due to be held at Moores on Wednesday 6th October, with Fiona Crocker from the GFSC talking about the role of the private sector in Guernsey's upcoming Moneyval evaluation.  A bonus luncheon is scheduled to take place on Thursday 25th November, with our sponsor Ruffer LLP presenting. 

As always, I would be pleased to hear from members to understand any frustrations or concerns - contact me.

Enjoy your July newsletter.

Kind regards

Rhona Humphreys

GAT Chair

NEWS

Extension to the deadline for filing company annual validation submissions

The Companies (Annual Validation) (Amendment) Regulations 2021 were passed by the Committee for Economic Development on Thursday 29th July. The effect of these regulations is to extend the deadline for filing company annual validation submissions for this year from 31 July to 31 August.

Guernsey Registry appreciates that the changes to the annual validation form for this year combined with some unreliability on our online system, have caused some problems for its users and it is hoped that this extension will help allow users to make their remaining submissions more easily.

Please note that civil penalties will now apply to submissions made from 1 September 2021.

The Organisation for Economic Co-operation and Development Inclusive Framework meeting

The OECD has been working to establish a global solution to reform the international corporate tax framework, impacting how large multi-national enterprises are taxed around the world.

That framework is based on two broad work streams, Pillar 1 relating to the proposal for partial re-allocation of taxing rights and Pillar 2 which proposes to introduce an agreement that large multinational enterprises pay a minimum effective rate of tax on their profits. These proposals seek to address issues that are linked to the increasing globalisation and digitalisation of the economy.

The recent announcement by the G7 Finance Ministers supported the OECD initiative, with an agreed set of taxation rules on Pillar 1 and a minimum effective rate of at least 15% in respect of Pillar 2.  At the recent Inclusive Framework meeting, an overwhelming majority of jurisdictions reached agreement on the proposals. Technical discussions will now continue, developing a detailed implementation plan by October.

Guernsey welcomes licence applications for the cultivation of cannabis for use in cannabis based products medicinal (CBPM)

Businesses can now apply to cultivate cannabis for use in cannabis based products medicinal (CBPM) in the Bailiwick of Guernsey following the signing of a Memorandum of Understanding (MoU) with the UK Home Office on 22nd July 2021. The agreement marks a significant step in the development of the Bailiwick's emerging cannabis industry which has quickly become one of the most established in the British Isles.

The medicinal cannabis market is one of the fastest growing cannabis sectors. Market intelligence from industry experts, Prohibition Partners, estimate that the European medicinal cannabis market will grow to a value of £16.1bn by 2024 [1]. With the MoU now in place, successful applicants will be able to cultivate cannabis plants with high THC content as they develop their products. Prior to the agreement, only licences for the cultivation and processing of CBD products were available.

Unemployment continues to fall in June as job vacancies rise

Unemployment continued to fall during June, as the Job Centre advertised a record number of job vacancies. The total number of people unemployed in Guernsey fell to 440 at the end of June, a reduction of 54 from the end of May 2021.

The number of job adverts promoted by the Job Centre was 545, which is the highest number of jobs ever advertised by the Job Centre in one month with new claims for employment and income related benefits also increased, with 63 new claims made, compared with 28 in May.

A number of training schemes and placements were run through the Job Centre to support people into employment. At the end of June there were 42 people on training schemes such as Work to Benefit, Kickstart and placements with the third sector.

Deputy Peter Roffey, President of the Committee for Employment & Social Security, said:

'It is encouraging to see unemployment fall for a fourth consecutive month. It was only a few months ago that unemployment was more than double what it is now, and so I must commend the fantastic work that has gone into supporting many people into employment over the last few months.'

Fully vaccinated travellers to receive lateral flow tests on arrival

Fully vaccinated travellers into the Bailiwick will be provided with lateral flow tests on arrival from Tuesday 3rd August 2021, provided the necessary testing packs arrive in the anticipated timeframe.

The Civil Contingencies Authority confirmed on Tuesday 27th July that it will introduce lateral flow tests on arrival for adult 'blue channelers' - those travelling from within the Common Travel Area who have received two vaccine doses plus 14 days having passed since their second jab. The Authority is also strongly recommending that those who are not local residents arrange to take a pre-travel test (either PCR or lateral flow).

Visitors who arrange to be tested pre-travel will protect themselves and their families from the costs and difficulties they will experience if they subsequently test positive after arriving in the Bailiwick. In addition, this will afford additional protection to those who travel with them on the same flight or ferry and to others within the Bailiwick.

Fully vaccinated travellers will be charged £25 per travelling adult for a pack of five lateral flow tests they will receive on arrival. This charge will be collected at the point of the traveller completing the Travel Tracker and is necessary for them to be confirmed as a 'blue channeler'. Travellers are asked to take the lateral flow test immediately on arrival at their home or accommodation, then every other day, to help protect themselves and the wider community in line with the consistent Guernsey Together spirit since the start of the pandemic.

Commission consults on Fees for 2022

On 16th July 2021 the Commission launched a consultation paper on proposals for increasing the licence fees paid by firms.

Taking into account the Commission’s current and forecast financial position, changes to the regulatory laws being implemented on 1 November 2021 and feedback from industry, the Commission is consulting on the following proposed changes to its fees:

• an overall fee increase of 10.1% for all sectors;
• a restructuring of fees for the investment sector;
• changes arising from the update to most of the sectors’ laws following the Revision of Laws project; and
• creating a cap for pension scheme fees.

Feedback may be provided via the Consultation Hub section of the Commission’s website: https://consultationhub.gfsc.gg

Speaking about the proposals, the Commission’s Chairman, Drs Cees Schrauwers, said: “Since 2013, the Commission has exercised considerable control over its costs as explained in the consultation paper.  The additional income provided by the proposed fee increase would be invested in increasing staffing numbers within key areas of the Commission, such as the Authorisations Division where we are seeing an increase in applications. It will also allow us to invest in our internal systems and  ensure that the Commission remains effective and able to demonstrate that the Bailiwick meets the standards required for international financial services businesses to continue to prosper in the future.”

Members are politely reminded that responses to the fees consultation close on Wednesday 8th September 2021 and are encouraged to submit a response directly by clicking the button below should you have a view on this paper.

Reminder: Compliance with Cyber Security Rules by 9th August for both company and personal fiduciary licence holders.

The new Cyber Security Rules and Guidance were introduced after extensive engagement with industry and were designed to be principles based, allowing for application across the Bailiwick’s diverse finance sector.  They replaced the previous Cyber Security Guidance. 

The Cyber Security Rules came into operation in February 2021, however transitional arrangements within the Rules allowed firms to implement changes to their internal controls to ensure compliance with the Rules by 9th August 2021.  Please note: The rules also apply to Personal Fiduciary Licensees.

The Commission would recommend continued attention to the guidance issued by the National Cyber Security Centre

Please click the button below to read the GFSC document containing information and guidance or see the webpage HERE.

Reminder: Fiduciary Annual Returns due by 31st August

Under The Regulation of Fiduciaries (Annual Return) Regulations, 2017 persons holding a fiduciary licence are required to complete an Annual Return each year.

An Annual Return covers the period from 1 July to 30 June. There are separate forms for the holders of personal fiduciary licences and full fiduciary licences, which are available on the Online Submissions Portal now.

Updates to the Handbook on Countering Financial Crime and Terrorist Financing and issuance of Instruction

On Monday 5th July Commission issued amendments to the country lists in Appendix C and Appendix I of the Handbook on Countering Financial Crime and Terrorist Financing reflecting the Financial Action Task Force’s updated list of jurisdictions under increased monitoring, which includes Malta, Haiti, the Philippines and South Sudan.

The amendments include the removal of Malta from the list of equivalent jurisdictions in Appendix C and its addition to the list of countries and territories identified in Appendix I which may present a higher risk of money laundering and terrorist financing.  At the same time, an instruction is issued to all specified businesses setting out the steps to be taken before the end of December 2021 in respect of business relationships they have which are connected to Malta.

The Commission has removed Ghana from Appendix I to the Handbook as a result of the FATF’s announcement. Ghana is no longer under increased monitoring by the FATF having addressed its AML/CFT deficiencies.

The updated Handbook, appendices, the instruction and the latest FATF notice can be accessed via the below links:

https://www.gfsc.gg/commission/financial-crime/handbook-on-countering-financial-crime-and-terrorist-financing

https://www.gfsc.gg/commission/financial-crime/notices-instructions-warnings

https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-june-2021.html

Updated Guernsey Green Fund Rules

The Commission amended the Guernsey Green Fund Rules on Tuesday 6th July making two liberalisations based on industry feedback gathered during our thematic review of the Guernsey Green Fund Regime published in March. These amendments were consulted on as part of the Commission’s Spring Green Consultation, issued on 11 March 2021. Responses to the Spring Green Consultation Paper were largely supportive and a feedback statement addressing the consultation feedback has been published on the Commission’s Consultation Hub. The Commission is grateful to everyone who contributed.

The changes to the Guernsey Green Fund Rules arise from the findings of the thematic review.  The Commission undertook the thematic because it wished to be able to provide assurance to investors and those thinking of making green investments, that funds enjoying use of the Guernsey Green Fund Accreditation are investing in projects which comply with the criteria for green investments set out by the multi-lateral development banks. 

Financial Crime Risk Return 2021

The Financial Crime Risk Return (the “FCRR”) for the reporting period 1 July 2020 to 30 June 2021 is now available for completion on the Online Submissions Portal on 13 July 2021.  The submission deadline is 31 October 2021.

Following the Commission's previous announcements and after consultation with industry, updates made to the 2021 FCRR include:

• Additional reporting on suspicious activity and tax related disclosures;
• Further information on AML/CFT governance and compliance arrangements;
• Controls for identifying PEP connections, adverse media and sanctioned parties;
• Additional information on periodic risk reviews; and
• Revised geographical data in relation to customers.

A list of new questions has been included within the guidance document. All firms required to complete the FCRR should consult the guidance document prior to completing the 2021 FCRR to ensure the correct data is provided.

Should you have any queries regarding how to complete the FCRR, please consult the guidance document in the first instance, prior to emailing amlcft@gfsc.gg

Thematic Review on Reporting Suspicion

On Thursday 15th July the Commission issued its report on the thematic review on the reporting of suspicion of money laundering or terrorist financing. The review covered both financial services and prescribed businesses and was undertaken during the second half of 2020.

A copy of the thematic review can be found on the Financial Crime Division's Thematic Reviews page. 

All firms which took part in this industry-wide review had appointed a money laundering reporting officer (“MLRO”) and had policies and procedures for the reporting of suspicion, which provide guidance to their staff on forming a suspicion and what to do. Moreover, the vast majority of MLROs interviewed were suitably senior, qualified and independent. Nonetheless, in the majority of firms reviewed, the policies and/or procedures did not cast a full framework over the reporting process or provide comprehensive guidance for the MLRO and nominated officer on the firm’s expectations on the fulfilment of their roles.

Hong Kong update from Andy Robinson, 12 July 2021

As the mission to highlight Guernsey’s specialist financial services industry across the globe continues, we hear from WE ARE GUERNSEY Hong Kong Consultant Andy Robinson, who provides an update on the recent Asia-focused private wealth roadshow.

It’s been another busy month out here in Hong Kong, I have attended many meetings across all sectors and had the opportunity to meet key individuals as a result of Guernsey Finance’s Asia Private Wealth Roadshow and other events. 

The roadshow, which featured five industry experts who spoke on various aspects of investing through Guernsey, together with one-on-one opportunities with our delegates, received positive feedback. There are some very good follow-up opportunities which I am pursuing and from which I’m pleased to say have resulted in me being able to make some new connections. 

There has also been a very good reaction to the Hong Kong-focused Guernsey Finance podcast, which saw industry professionals in Guernsey describe the tax landscape and what it’s like to live and work in Guernsey, along with a Hong Kong-based practitioner from a family office, who gave her insights on why Guernsey is an attractive place with which to do business.

My mission to highlight Guernsey’s financial services sector in Hong Kong continues to bear fruit, with guests at a couple of the meetings I attended very clearly expressing their view that Guernsey is a strong and trusted jurisdiction. 

Guernsey Private Wealth Forum - remaining sponsorship opportunities

Guernsey Finance is pleased to offer the opportunity to sponsor our annual Guernsey Private Wealth Forum taking place at the Banking Hall in London on Tuesday 05 October.

Just a few sponsorship opportunities remain, detailed in the document accessed via the button below. If you wish to book a sponsorship package, please email Emily Wild as soon as possible – emily@weareguernsey.com

EVENTS

GAT / STEP COMBINED SPECIAL EVENT - Thursday 16th September

The Guernsey Association of Trustees and STEP Guernsey are delighted to bring you a special  'Moneyval evaluation of Guernsey' lunchtime talk, presented by Richard Walker, Director of Financial Crime Policy at the States of Guernsey.

Richard has undertaken numerous AML/CFT evaluations of other jurisdictions and trains both FATF and MONEYVAL evaluators. He is Vice-Chair of MONEYVAL and Co-Chair of the EEJG of the FATF.

PLEASE NOTE: Tickets will be on sale soon and both GAT and STEP members will receive booking invitations via email.  Tickets will be limited to two per firm initially.  Further tickets will be released if available.

For booking enquiries or queries, please email STEP, GAT or ellie@fws.gg.

GTA Courses

MSc Corporate Governance/Graduate CG now enrolling

There are no public courses scheduled at the GTA University Centre in August but members may be interested in the MSc Corporate Governance/ Graduate CG which is starting in January 2022.  This 2.5 year academic programme has been delivered locally since 1996 in partnership with Bournemouth University and the next cohort will be delivered entirely online through the GTA.

The programme enables students to obtain a masters degree as well as accreditation by the Chartered Governance Institute (CGI) and the content has been updated to reflect changes to the CGI’s Professional Programme to ensure that students receive the most up-to-date teaching and learning.

Each module of the programme involves the opportunity to deal with real data derived from recent research and professional practice.

For further details please follow the link here: MSc Corporate Governance/Graduate CG | GTA or contact Kate Lenfestey on kate.lenfestey@gta.gg.

Start Date: January 2022
Location: Online with the GTA
Cost: £12,000

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Carey Olsen shortlisted for three STEP Private Client Awards

Carey Olsen is a finalist in three categories at the 2021/22 STEP Private Client Awards:

• International Legal Team of the Year
• Contentious Trusts and Estates Team of the Year and
• Private Client Legal Team of the Year

The awards, which are widely recognised as the most prestigious in the private client and wealth management industry, look to highlight excellence among private client lawyers, accountants, barristers, bankers, trust managers and financial advisers.

Carey Olsen is the only offshore law firm with multiple nominations across the 23 categories. In total, STEP received 297 entries for this year's awards.

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