Island ‘exposed to the risks of financial crime’ by failings at Louvre Trust
FINANCIAL penalties of more than £100,000 were imposed on a local trust company and its directors after they failed to identify all high-risk factors when assessing clients.
An investigation by the Guernsey Financial Services Commission found also that Louvre Trust (Guernsey) Ltd frequently failed to obtain adequate due diligence on client business relationships and failed to maintain adequate records.
The GFSC said the contraventions and non-fulfilments of the licensee and the directors were serious and exposed the firm and the Bailiwick to a significant risk of financial crime.
‘Through its systemic failings, the licensee had potentially enabled specific structures that it administered to be involved in money laundering or terrorist financing.’
The potential to facilitate the unhindered movement of significant funds around the globe over a long period was of serious concern to the commission.
‘[Louvre Trust] has acted in a manner that could bring the Bailiwick into disrepute as an international finance centre.’
The licensee and directors agreed to settle at an early stage, which was taken into account, and a 30% discount given on the penalty. The firm was fined £70,000 and five directors faced fines totalling £35,000.
Derek Baudains, Louvre Group Ltd CEO and chairman of Louvre Trust (Guernsey) Ltd, acknowledged that in 2016 Louvre Trust Ltd (LTG) required improvements in aspects of its corporate governance, compliance and risk assessment procedures.
‘Working with the GFSC we identified the areas that did not meet the standards of The Proceeds of Crime Regulations and the GFSC’s handbook,’ he said.
‘Since 2016, the management and staff of LTG have worked tirelessly, and in consultation with the GFSC, to make the changes highlighted by the review, and have put in place improved procedures for corporate governance, compliance and risk assessment, as expected by the regulator.
‘We are confident that our recent senior risk and compliance team appointments, alongside our updated frameworks, will ensure that LTG is able to operate at the high standards required by the regulator.’
n The five directors fined under breaches of the Financial Services Commission Law were: Derek Paul Baudains and Haidee Louise Stephens (£8,400 each); Julian Dai Lane (£7,000); and Jonathan Ross Bachelet and non-executive director Charles Peter Gervais Tracy (£5,600 each).
Mr Baudains and Mr Bachelet are listed by the GFSC as current directors.
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