Minimum of £1.1m. needed to prepare for Moneyval visit

Next year’s visit by European anti-money laundering agency Moneyval was cited by Policy & Resources president Peter Ferbrache as an example of unavoidable cost increases when he recently proposed the largest tax increases in decades.

The Committee for Home Affairs has now told the Guernsey Press that it estimates an additional £1.1m. will be needed to prepare the island – and it yet could be more.

‘The resources we have put in place have been developed over time,’ said Home Affairs president Rob Prow.

‘For example, at the end of 2021, Moneyval preparations were being met within existing revenue budgets for relevant services, but upon further review by the end of 2022 we recognised that further support, including specialist advisers, would be required.

‘It remains possible that we will invest further resources into Moneyval preparations should they be needed, such is its importance.’

Inspectors from Moneyval will assess the island’s defences against money laundering and the financing of terrorism.

An unfavourable outcome could make Guernsey less attractive to financial services companies and investors.

Home Affairs had previously ruled out an independent trial inspection, as carried out in Jersey and some other jurisdictions before Moneyval visits.

But it is now spending some £245,000 on external advisers who specialise in Moneyval inspections.

‘This resource is in addition to the significant amount of work already being undertaken by service areas across the States, the cost of which is being absorbed by existing revenue budgets,’ said Deputy Prow.

‘For example, within Home Affairs, the Economic and Financial Crime Bureau’s current revenue allocation for 2023 is £3.356m.’

Deputy Prow has consistently assured the States that his committee is fully aware of the importance of the Moneyval inspection to the future of the island’s financial services industry.

He has taken charge personally of a group set up to oversee preparations for the inspection, which involves numerous States’ offices and agencies, including the bureau, Home Affairs, Policy & Resources, St James Chambers and officials working in law enforcement, tax collection and company registry.

‘Preparations for Moneyval are largely being led by operationally-independent service leads and statutory officials.

‘Our role as politicians is to provide oversight and direction and ensure the necessary funding is in place to provide services with the resources they need to prepare as best as they can for the evaluation,’ he said.

Preparations have been going on for years. The States set up the bureau in 2021 and provided it with extensive legal powers last year.

‘This, together with other substantive changes and measures to enhance Guernsey’s anti-money laundering and countering the financing of terrorism framework, will help put the Bailiwick in the best position it can be in readiness for the evaluation,’ said Deputy Prow.

‘It would be unwise for the States to prejudge the outcome of any external inspection. However, we will be doing everything we can to get a positive evaluation for the island.’