Millions in suspected criminal assets frozen by new bureau
NEARLY £150m. in suspected criminal assets were frozen last year by the States’ new Economic & Financial Crime Bureau.
The bureau was created as a independently-led enforcement entity in the summer of 2021 by Home Affairs and Policy & Resources to investigate money laundering, economic crime, and seek to recover the proceeds of unlawful conduct.
The initiative to set up such an office was partly driven by Guernsey’s impending inspection from Moneyval, the Council of Europe’s anti-money laundering monitoring body, which is now due to take place next spring.
EFCB director Kevin Davis, previously chief investigator for the UK Serious Fraud Office, said that as Guernsey’s evaluation by Moneyval drew ever closer, a considerable proportion of the bureau’s resources had been devoted to preparing for the criminal and civil justice aspects of this assessment.
‘This remains a hugely challenging work piece that will continue throughout 2023 as we transition from a law enforcement environment that focused almost exclusively on domestic criminality, to one that concentrates on trans-national financial crime that aligns to the Bailiwick’s financial risks,’ he said.
During 2022, the bureau was involved in 11 criminal investigations involving 17 suspects, with 13 requests made to overseas jurisdictions to obtain evidence.
A more informal cooperation process was used on 30 occasions to aid asset recovery and money laundering investigations, sharing intelligence with 16 jurisdictions including France, Hong Kong, South Africa and the United Kingdom.
In 2022, the EFCB secured convictions in two criminal cases – money laundering relating to drug trafficking, in a joint investigation with Bailiwick Law Enforcement, and fraud predicated on dishonest representations relating to the sale of a business, where the offender intended to make a financial gain.
During 2022 the agency paid £2.3m. into the seized assets fund, part of which related to tainted assets held in accounts in Guernsey.
Assets in this fund are first used for recovery costs, victim compensation, and fulfilling international agreements.
After those three priorities are met, funds are divided between a ring-fenced internal fund and the Social Investment Fund, which helps charities and community groups.
The bureau’s annual report for 2022 also highlighted staffing issues that had led the EFCB to set up a satellite workforce in the UK that would come to represent 25% of its staff.
Mr Davies said that it had been challenging to incentivise people with the skills and experience required to relocate and work in Guernsey.
‘By the end of 2022 staff numbers decreased by 6%, with 50% of all staff losses moving to the finance industry,’ he said.
Highlights of 2022
In its report the EFCB said that in 2022 the Bureau had:
. Recovered assets of £107,000 representing the proceeds of crime;
. Recovered assets of £45,000 representing the proceeds of unlawful conduct;
. Ensured £149m. of suspected tainted assets were protected from dissipation, pending the outcome of financial investigations;
. Opened two new money laundering investigations referable to Guernsey’s National Risk Assessment on money-laundering and terrorist-financing.
. Managed a non-conviction based asset recovery caseload where the assets at stake exceed £60.6m.
