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P&R proposes new law on minimum standards for accountants

P&R proposes new law on minimum standards for accountants

Friday 16 September 2022

P&R proposes new law on minimum standards for accountants

Friday 16 September 2022


The States' drive to add more regulations to business to meet international standards could soon lead to new laws affecting accountants and auditors.

The Policy & Resources Committee is asking deputies to legislate for a minimum standards test for professional services, which also includes tax and insolvency specialists.

The proposals follow a similar decision made by the States earlier this year to introduce new legal regulations and minimum standards for estate agencies.

estate_agents.jpg

Pictured: In May, States' members approved the preparation of a new law which will regulate standards among estate agencies.

The Committee said it was recommending "legislation imposing additional requirements on firms of accountants, auditors, insolvency practitioners and tax advisers operating by way of business in the Bailiwick so as to address the gap which currently exists in preventing criminals from controlling such firms".

"This gap has arisen as the [international] Financial Action Task Force has revised the standards it requires jurisdictions to apply in relation to these businesses," it said.

"It is recognised that the establishment and administration of a proportionate framework is crucial and the proposals...would apply only to those businesses in the Bailiwick subject to anti-money laundering and combatting of terrorist finance obligations. There are de minimis provisions...which, in practical terms, mean that a very small firm would not be subject to the framework."

The proposals could be debated and voted on by the States' Assembly next month.

Policy & Resources Committee

Pictured: The Policy & Resources Committee is proposing that the Guernsey Registry should administer and enforce the recommended new minimum standards test. 

The Financial Action Task Force, which is based in Paris, is an inter-governmental organisation founded in 1989 after the G7 nations agreed to develop the world's efforts to combat money laundering. Around 20 years ago, its work was expanded to include working against the financing of terrorism.

It sets global standards to which all jurisdictions are expected to comply and their compliance is evaluated periodically.

"In order for the Bailiwick itself to meet those standards unambiguously, it is proposed that legislative provision should be made for a minimum standards test," said the Committee in setting out its recommendations to other deputies.

"It is important for Guernsey to take ownership of meeting these standards rather than rely on regulatory regimes in other jurisdictions. The new legislation would supplement existing regimes to ensure that the Bailiwick will take responsibility that only people who are fit to be involved in the management or control of a professional business are able to hold relevant positions.

"In addition, the test should consider whether the interests, or potential interests, of clients are, or are likely to be, threatened by an individual holding their position. As part of the foregoing, regard may be had to the previous conduct and activities in business, or financial matters, of the person in question.

"There is an additional Financial Action Task Force requirement...which has the aim of ensuring that criminals are not professionally accredited. It is envisaged that the legislation for the Bailiwick should specify that individuals providing professional advice in or from within the Bailiwick should be appropriately qualified."

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