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Financial Services Commission releases report on financial sanction compliance

Financial Services Commission releases report on financial sanction compliance

Friday 13 May 2022

Financial Services Commission releases report on financial sanction compliance

Friday 13 May 2022


The Guernsey Financial Services Commission (GFSC) has issued its report on the Bailiwick’s compliance with financial sanctions.

The report is a thematic review of the Commission’s licensees’ effectiveness in monitoring and compliance with target sanctions. The results showed that the sanctions screening systems that firms use in the Bailiwick are effective.

The Commission undertook the review last year in recognition of the growing importance and complexity of sanctions compliance. 

The Ukraine war further highlighted the importance of robust and easily useable controls in this area, although the Commission said that the review predated the conflict and so the review does not include firms’ responses to implementing the sanctions relating to Russia. 

gfsc

Pictured: A spokesperson from the GFSC said the report shows "many examples of good practice".

A spokesperson from the Commission said that its effectiveness testing was “extensive”. 

“Those subject to the testing were responsible for over 260,000 business relationships with the banks tested responsible for 99.8% of inward transactions and 99.6% of outward transactions in and out of the Bailiwick during 2021,” they said. 

“The results showed that only a small minority of firms were in need of material improvement. These few firms were made subject to risk mitigation programmes set by the Commission.”

The spokesperson said that there were “many examples of good practice”.

“It was encouraging to note the strong performance by banks in the effectiveness testing, particularly the main clearers,” they said.

“Nevertheless, the Commission is aware of previous failures with automated screening systems.

“Firms need to continue to ensure that they consider and document their sanctions risks, the screening process, as well as testing the effectiveness of the sanctions screening systems employed.”

GFSC

Pictured: The review work started in 2021, before the sanctions imposed as a result of Russia's invasion of Ukraine. 

The results from the thematic review reflect the Bailiwick’s commitment to preventing the abuse of its financial services sector and to meeting established international standards for preventing financial crime. 

The spokesperson continued: “All firms are obligated to manage sanctions risk and we hope that this report will also be of interest to firms in every sector as they are all under the same obligations in respect of sanctions screening.”

The full review can be found HERE

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