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Offshore enforcement: building investigatory capacity in Guernsey

Police Oracle talks to the head of a new financial crime unit in the Channel Islands.

Offshore enforcement: building investigatory capacity in Guernsey

Date - 6th July 2022
By - Police Oracle

Guernsey’s Economic & Financial Crime Bureau was established in 2021. Within the EFCB there is a Financial Intelligence Unit that acts as the competent authority for handling Suspicious Activity Reports (SARs), a criminal investigation team, a civil asset recovery team, an investigatory advisory team and an intelligence development unit. As an offshore financial centre the state is subject to the FATF (Financial Action Task Force) recommendations which sets out a complex series of international recommendations to combat money laundering and the financing of terrorism around the world.

One of those recommendations is to subject states to periodic valuations around their law enforcement activities in those key areas of financial crime and Guernsey’s next such evaluation is due in 2024.

One of the driver’s for the establishment of the bureau was to help prepare law enforcement’s readiness for that inspection which is known to be meticulous and stringent in nature.

The bureau’s director is Kevin Davis who is former chief investigator for the Serious Fraud Office in London. He told Police Oracle: “Prior to the establishment of the bureau [law enforcement] tended to have a more domestic focus, rather than looking at the key risks of Guernsey as a financial centre. Like other offshore finance centres the majority of the risk comes from money laundering using complex financial vehicles where the predicate offence is committed in another country.”

The FATF inspection is carried out by MONEYVAL which are effectively FATF’s operational arm although they are part of the Council of Europe.

The last inspection carried out on Guernsey was in 2014 and looked specifically at legislation and policies that go behind the state efforts to tackle money laundering and terrorism finance. The next inspection will look at the effectiveness of law enforcement in using the legislation.

The bureau is looking towards having an operating model of around 50-53 investigators which includes the financial intelligence unit made up of 14 people. “It is a much more diverse enforcement agency,” says Davis. “It won’t just consist of law enforcement officials. We have two in-house lawyers and I will be looking to recruit our own accountant. There is range of different professions who will be brought together in order to deal with complex case work.”

An international recruitment exercise has begun. No doubt for some the island of Guernsey will be an attractive place to relocate but there is also the option of working remotely for some roles.

“There are positives and negatives with people not relocating,” he says. “But we need to make the most of the market that is available to us.” And that market is a fairly niche one as financial investigators don’t grow on trees. “In relation to complex case specialists it is very unlikely that individuals would have the competence and experience necessary if they haven’t had an extensive spell within law enforcement.”

The two main boxes to tick are criminal case work and asset recovery case work. This is because the type of cases the bureau deals with mostly involve the use of complex financial vehicles to mask the origins of the cash and other assets.

The recovery of assets can be based on work following investigation and criminal conviction or non conviction recovery work which uses civil remedies to recover tainted assets.

Guernsey has a few legislative quirks which are unique to the island but mostly follows UK law in regard to money laundering largely through the Proceeds of Crime Act 2002 (POCA). “Our legislation mirrors that in broad terms,” says Kevin Davis. “There are a few different clauses as you would expect so anyone who is familiar with working within POCA would easily and quickly adapt to the legislation within Guernsey.”

The bureau is roughly half way towards its 50 member target strength currently “but there is a bit of work to do to get us up to the operating model,” he adds.

“It is a very specialist area and we are competing with other agencies in the UK  - such as the National Crime Agency and the SFO. It is a specialist area that suits some people but doesn’t float the boat of others.”

Working more closely with international partners is a major part of the bureau’s work. “One of objectives of the bureau is to improve international co-operation not least because that is an area that MONEYVAL will be looking into," he adds. 

“One thing I think we can offer specialists is the range and quality of our case work in terms of their ability to develop their skills which I think is second to none in terms of an offshore centre." The location of the job is also a plus he says. “It’s a small island but it has a lot to offer. The work/life balance here is very different to the racy pace of London. Although that doesn’t mean we don’t investigate at pace.”

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