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

Members' Area

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's response to the following consultation paper has recently been added to the Members' Area for your information:

• GAT / STEP response - Joint Technical Committee response to Consultation Paper on Professional Indemnity Insurance Fiduciary and Investment Sectors

Message from the Chair

Following a meeting with the GFSC, an email was sent to members on Friday 11th March outlining the expectation of actions fiduciaries should take with regard to the fast moving situation of Russian sanctions. Please find the email again below for members' information, in addition to the GFSC advice released on 24th February. GAT continues to monitor the situation and will inform members as we receive further information.

The first in-person GAT luncheon of the year, is taking place on Wednesday 6th April, presented by Tony Mancini of our sponsors KPMG. GAT, in association with Guernsey Finance, is also holding a bonus luncheon on Thursday 26th May, with Josephine Bush, Strategic Advisor for Green and Sustainable Finance presenting.

Booking for both events is available now on Eventbrite or via the Events section below. As always, I would be pleased to hear from members to understand any frustrations or concerns please contact me.

Enjoy your March newsletter.

Kind regards

Rhona Humphreys

GAT Chair

Russian Sanctions

As you are aware the Guernsey Financial Services Commission issued a notice to all fiduciary businesses on 1st March 2022, outlining the steps which should be taken – this note is intended to add some specifics to that. It is drafted by the GAT executive and is not guidance from the GFSC.  We would also remind you that each business is individually responsible for managing its own exposure in this area.

Primarily, it is imperative that every business is reviewing its entrire client base on an ongoing basis to ensure that the clients administered (including assets) do not appear on a sanctions list.  However, it is recommended that this review is future-proofed.  To clarify, we encourage considering possible sanctions from the US and EU, which may not yet have come into force, but are highly likely to.  In addition to this, future-proofing your review may involve considering the profile of your client: 

• Are they an oligarch? 
• Do they have any connection with government officials or other sanctioned individuals? 
• Have they created wealth via Government contracts or other similar considerations? 
• Additionally, are you sure that the client on record is indeed the client and the individual behind the wealth in question.

In addition, fiduciaries should be looking closely at the entities we administer to fully understand the activity being undertaken in subsidiaries not administered in Guernsey. Are there any concerns about information being provided or lack of it, and can you obtain confirmation from the Directors of those entities to ensure they too are undertaking appropriate checks with regard to the sanctioned entities.

NEWS

Some Factors for Financial Services Firms to Consider in light of the War between the Ukraine and the Russian Federation

The Commission is monitoring the situation and has been, through its 2021 thematic work on sanctions screening and other interactions, encouraging firms to prioritise their sanctions monitoring and assessment of sanctions risks. The Commission requests that all firms check whether they maintain any accounts or otherwise have any kind of relationship with the persons referred to in sanctions notices, and if firms identify that they maintain relationships with sanctioned persons, reminds firms that they must treat any funds, other assets or economic resources as frozen.  Frozen funds should be reported in accordance with the law.

All firms involved in investment in countries involved in armed conflict should also take care to ensure that investors are treated equitably, especially in terms of fair valuation and allocation of liquid and illiquid assets between investors.  Given the increasing volatility in the geopolitical landscape, the Commission is enhancing its financial stability monitoring work. We would appreciate firms’ swift cooperation with our enquiries.

Given the deteriorating international situation, all firms are requested to check they are familiar with the Commission’s Cyber Rules and Guidance, 2021, noting the need to ensure they:

• Have appropriate cyber security software in place
• Implement IT systems updates in a timely manner
• Encourage their staff to exercise caution by not clicking on or opening unfamiliar links in emails or on websites.

If firms experience any difficulties in relation to these matters, we encourage them to bring those matters to our attention through their normal supervisory contacts at the earliest opportunity or contact the GFSC by emailing sanctions@gov.gg

The Foreign, Commonwealth and Development Office update the UK Sanctions List

On Thursday 24th March 2022 the Foreign, Commonwealth and Development Office updated the UK Sanctions List. This list provides details of those designated under regulations made under the Sanctions Act, adding 59 entries to the consolidated list which are now subject to an asset
freeze.

The updated UK Sanctions List can be found HERE.

For further information on the actions which must be implemented should you maintain accounts or hold any funds or economic resources linked to any of the entries listed, please see the full Financial Sanctions Notice by clicking the button below.

AML/CFT Handbook - Appendix I Update

On Tuesday 22nd March the Commission updated Appendix I of the Handbook as a result of the FATF's announcement that it has added the United Arab Emirates (“UAE”) to its list of jurisdictions under increased monitoring and has removed Zimbabwe. Zimbabwe remains on Appendix I as it is listed by other relevant external sources.

Appendix I lists countries and territories that are identified by relevant external sources as presenting a higher risk of money laundering and/or financing of terrorism. Firms are encouraged to review the updated Appendix I in order to assess the impact that these changes may have on their business, including whether the UAE’s listing should be taken into account as a relevant risk factor when reviewing new and existing business relationships and within its transaction monitoring controls.

The FATF page on High-Risk and Other Monitored Jurisdictions can be found HERE.

Updated and tracked versions of Appendix I can be found within the Notices, Instructions & Warnings page. An updated version of the Handbook can be found by clicking the button below.

Economic Activity Return is a new requirement for selected employers

All employers operating in Guernsey and Alderney are being made aware of a new annual Economic Activity Return.

Around 500 employers will be selected to complete the return each year. Those selected this year will be contacted directly in April via a letter. The Return can be completed online or in digital or paper copy, but completing it is a requirement under law for all selected employers.

The Return asks employers to provide information relating to certain types of incomes and expenditures over the past three years and forecasts of those for the next two years. This information will help improve the accuracy of economic statistics including Gross Value Added (GVA) and Gross Domestic Product (GDP).

For more information click the button below or email Danielle Grayland.

2021 provisional financial position

The provisional assessment of the States' financial position in 2021 is indicating a better outturn than forecast despite the ongoing impacts of the COVID-19 pandemic, including a second lockdown.

It shows an improvement against budget of £46m, generated by a combination of higher revenue income and lower Committee expenditure.  This has seen a budgeted deficit of £33m become a surplus of £13m. This has been further improved by the income earned on our reserves in what was a good year for investments.

This surplus figure is before the amount the States, under its own rules for investing in infrastructure, is committed to spending on capital projects is taken into account. That is in the region of £60m, meaning the overall position is still in deficit.

Deputy Mark Helyar, Treasury Lead for the Policy & Resources Committee said: "In terms of the Bailiwick's continued response to COVID and what that's meant for our economic performance, for jobs and businesses and for public finances, 2021 has been much better than expected and that's a credit to this community.

But we should not expect this very exceptional time to continue and become the norm and we need to be really careful not to be lulled into a false sense of security.  It's really positive to have had this good performance, and it puts us in a good position for moving forward, but overall when you include the Bailiwick's capital spending needs, we remain in a deficit." 

Strategic Review to Enable Continued Success of Guernsey's Insurance Sector

Cutts-Watson-Consulting Limited ("CWC"), in association with the Committee for Economic Development (the "Committee"), have released a strategic review of Guernsey's Insurance sector (the "Review") to assist in the development, promotion and long-term success of the sector, both domestically and internationally.

This Review is an update to an original review, of the sector, carried out by PwC in 2016.

In 2019, the Insurance sector employed approximately 750 employees, comprising 12% of employees within the finance sector.  It generated nearly 15% of the finance industry's GVA.  The continued health, and future growth, of the sector are important to the prosperity of the Guernsey economy.

The Sector benefits the economy directly through travel and hospitality, and indirectly through the multiplier effect, and is considered to be an essential element of Guernsey's economic recovery from the impacts of the COVID-19 pandemic.

The Committee recognises the significant contribution, of the sector, to the economy and is keen to support the Sector's continued success in the medium to long term.  The Review will assist the Island, and the Committee, in the development of a strategic plan with clear actions and priorities.

Guernsey Suspends All Tax Cooperation with Russia

On Thursday 17th March Guernsey suspended all forms of tax cooperation (exchange of information for tax purposes) with Russia, with immediate effect. This decision is a further demonstration of the Bailiwick's support for Ukraine and aligns with a similar announcement today by the UK Government.

The relationship for the exchange of information for tax purposes between Guernsey and Russia came into effect from July 2015 when Russia signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters ("the MAAC") (as the MAAC was already extended to Guernsey in August 2014). The MAAC is one of the agreements that creates an international framework for exchanging information for tax purposes between tax administrations.

Deputy Mark Helyar, Treasury Lead for the Policy & Resources Committee said: "The Bailiwick of Guernsey is in lockstep with the UK in respect of measures being applied to Russia.  This decision to cease the exchange of tax information is an extension of Guernsey's existing policy.  

The exchange of information for tax purposes is a tool used to combat tax evasion and profit shifting and to risk assess for potential tax avoidance. Suspending the ability for Russia to receive such information from Guernsey ensures that the Russian government cannot use that information to increase its tax revenues."

EVENTS

GAT Members' Luncheon - Wednesday 6th April 2022

The next GAT Luncheon is taking place on Wednesday 6th April 2022 in the conservatory at Moores Hotel.

Our guest speaker will be Tony Mancini from our sponsors KPMG, who will be presenting about the European Commission’s proposal for a Directive aimed at fighting the use of shell entities and arrangements.  The proposed Directive will impact on structures that use EU resident investment holding vehicles and may change the choices businesses make when structuring in addition to affecting the EU standards on third country substance rules, which could be equally as important to business on the island to the OECD Pillar 2 proposals.

The luncheon will also feature an industry update from GAT Chair, Rhona Humphreys. 

GAT and Guernsey Finance warmly extend an invitation to a special luncheon event on Thursday 26th May, 12.30 - 2.30pm in the Conservatory at Moores Hotel.

Josephine Bush, Strategic Advisor for Green and Sustainable Finance at Guernsey Finance, will deliver a presentation to members. Josephine is particularly focused on developing commercially effective ESG and sustainable strategies that robustly manage risk as well as seize opportunity. 

The luncheon will also feature a short talk from GROW Director Mike Tidd and General Manager Jess Aughton, informing members of GROW's exciting future plans and the opportunities for trustees.

Rhona Humpreys, GAT Chair, will deliver a welcome and industry update.

April Courses by the GTA

The Role of the Company Secretary
 This one-day course is aimed at those who are looking to understand the role of the company secretary, how the role contributes to the effective running of a company, and how to effectively undertake key duties.  The course will help delegates have an understanding of the importance of corporate governance and corporate compliance and be able to meet the administrative requirements of a company.

Cost: £295

Enrol by: 6 April 2022
Venue: GTA University Centre
Time: 09:30 to 16:00

Further details and registration here.

Microsoft Word - Beginners
 This half-day course has been designed to provide a thorough introduction to Microsoft Word for those with limited experience of the software.  On completion delegates will be far more confident in their ability to create and amend Word documents and understand the importance of its use and the use of correct formatting and styles to gain maximum efficiency.

Cost: £195
Date: 12 April 2022
Venue: GTA University Centre
Times: 09:00 to 13:00

Further details and registration here.

Corporate Governance
Do you understand the corporate governance requirements for Guernsey companies and organisations?  Corporate governance refers to the system by which corporations are directed and controlled.  This half-day course will focus on reviewing the history of corporate governance in the UK, US and Guernsey.  It will look at the impact of the regulations on business practices and how these can be applied in our existing roles and will also look at the implementation of the Guernsey corporate governance rules.

Cost: £225
Date: 21 April 2022
Venue: GTA University Centre
Times: 09:00 to 13:00

Further details and registration here.

Effective Interviewing

An interactive half-day course designed to introduce delegates to the skills required to build and conduct effective interviews. Delegates will leave with an understanding of how to manage a successful interview process and interviewing style.  This course is suitable for people approaching interviews for the first time and provides a useful refresher for experienced interviewers.

Cost: £195
Date: 25 April 2022
Venue: GTA University Centre
Times: 09:00 to 12:30

Further details and registration here.

Money Laundering Reporting Officer (MLRO) Workshop

An interactive session covering MLRO responsibilities and duties which is suitable for newly appointed MLROs and deputies plus those already working in compliance and looking to refresh or extend their knowledge.  This course fulfils the specific training requirements for MLROs and Nominated Officers in an interesting and engaging way discussing lots of relevant case studies. 

Cost: £195
Date: 27 April 2022
Venue: GTA University Centre
Times: 09:00 to 13:00

Further details and registration here.

Please contact Camilla Hobbs GTA Programmes Manager for further details on any of the above courses.

Upcoming Guernsey Finance Events

Charitable giving is deeply rooted in Middle Eastern culture, and Middle Eastern clients are turning to Guernsey for its range of structures available for philanthropic causes. In our latest private wealth-focused blog HERE Walkers Group Partner Rajah Abusrewil explores why.

Guernsey Finance is hosting a seminar in London on Thursday 28th April as part of its philanthropy campaign for the private wealth sector. We encourage our members to highlight this event to their London contacts. For more information please click HERE.

Save the date for our Family Office Briefing in London on 22 June. More information to follow.

Save the date for the 2022 Guernsey Private Wealth Forum in London on Wednesday 2nd November. For further information please click HERE and for the full calendar of events please click the button below.

SPONSOR ARTICLES

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Senior hire for Carey Olsen's Guernsey trusts and private wealth practice

Carey Olsen has brought back Robert Quinn as a senior associate in its Guernsey trusts and private wealth practice.

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