The 2018 Ordinance significantly revised the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999 by consolidating and updating existing provisions related to financial and prescribed businesses. It replaced the 2007 and 2008 Regulations concerning financial services and prescribed businesses respectively, embedding them into new Schedules appended to the Law. The Ordinance was adopted to align Guernsey's framework with international best practices, including the FATF Recommendations, particularly Recommendation 16 concerning wire transfers.

Schedules Introduced & Their Relevance to WTR

The amendment inserted Schedules 3, 4, and 5 into the Law. Schedule 3 sets out comprehensive AML/CFT obligations for specified businesses, including customer due diligence (CDD), risk assessment, monitoring, and internal controls. Schedules 4 and 5 address registration and supervisory obligations for financial services and prescribed businesses respectively.

In the context of WTR, these Schedules support the identification and monitoring of originators and beneficiaries in fund transfers by ensuring that institutions maintain verifiable customer data and comply with disclosure, record-keeping, and transaction screening duties.

Customer Due Diligence & Risk-Based Controls

Schedule 3 mandates that specified businesses conduct appropriate CDD measures when establishing a business relationship or carrying out occasional transactions. Identification and verification are required not only for customers but also for beneficial owners and those acting on behalf of customers. Where business relationships are high-risk, including those involving correspondent banking or non-resident customers, enhanced CDD is required.

This framework supports the FATF Travel Rule by ensuring that both parties to a transaction are identifiable and that their information is retained and available for review.

Provisions on Monitoring & Suspicion Reporting

Ongoing monitoring of customer activity is required to detect suspicious behaviour, including complex or unusually large transactions or those lacking an economic rationale. The Ordinance specifies that businesses must appoint a Money Laundering Reporting Officer (MLRO) and put in place procedures for reporting suspicions to the Financial Intelligence Service.

These provisions enhance wire transfer compliance by reinforcing the obligation to review the origin and destination of funds, monitor transaction patterns, and escalate anomalies.

Record Keeping & Transaction Data

Specified businesses must retain CDD records and transaction documentation for a minimum of five years. These records must be retrievable and made available to the authorities upon request. The definition of transaction documentation includes data relevant to amounts and currencies transferred, which is fundamental for enforcing the traceability required under wire transfer regulation.

Prohibition of Anonymous Accounts & Shell Banks

Schedule 3 explicitly prohibits the maintenance of anonymous or fictitious accounts and requires that financial institutions do not establish correspondent banking relationships with shell banks. It further mandates that accounts be maintained in a way that facilitates compliance with AML/CFT obligations.

This strengthens the underlying architecture needed for the effective implementation of the Travel Rule by eliminating anonymity in fund transfers and requiring thorough due diligence on all counterparties.

Enforcement, Offences & Sanctions

The Ordinance includes robust enforcement provisions. Failure to comply with the new Schedules may lead to criminal prosecution, with penalties ranging from fines to imprisonment. It also includes offences for providing false or misleading information. Supervisory responsibility lies with the Guernsey Financial Services Commission, which may issue guidance and impose conditions on registration.

This legal backbone ensures that all entities involved in wire transfers operate under enforceable and clearly defined obligations that support international compliance standards.

Conclusion: WTR Compliance Integration

The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) (Amendment) Ordinance, 2018 integrates wire transfer regulation into Guernsey’s AML/CFT regime by formalising comprehensive duties for identifying and verifying customers, maintaining detailed transaction records, and monitoring fund flows. These measures align with the FATF Travel Rule by ensuring that both the originator and beneficiary of a transfer can be accurately traced. Through its consolidation of prior regulations and emphasis on supervisory enforcement, the Ordinance underpins a rigorous and transparent regulatory framework for wire transfer compliance in the Bailiwick of Guernsey.