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Abel Lyall

Abel Lyall

Partner | Guernsey

New guidance on Guernsey's AML regime: Suspicion and Provenance Challenges

29 June 2018

In a first for Guernsey, the Royal Court has delivered guidance demonstrating that "no consent" decisions taken by Guernsey's Financial Intelligence Service (FIS) don't necessarily mean the end of the line for those seeking access to their assets.

The landmark case of Liang v RBC Trustees (Guernsey) Limited 20/2018 centred on a claim made for refusal to transfer assets due to an Anti-Money Laundering (AML) "no consent" decision. The outcome will give useful guidance to any aggrieved party wanting to build a case to have their assets released.

Mrs Liang instructed RBC to terminate The Lavender (2009) Trust, of which she was a beneficiary. However RBC had already filed a Suspicious Activity Report (SAR) with the FIS, relating to information about Mrs Liang's husband who is wanted in Hong Kong on suspicion of fraud. The FIS refused consent, which led to Mrs Liang to seek a court order compelling RBC to release assets.

When funds are subject to law enforcement "no consent", it's possible to get relief by either challenging the suspicion that funds were the proceeds of crime, or provenance - proving that the funds in question aren't tainted.

It's important to note that cases turning upon whether suspicion is properly held will be rare, as the threshold remains low, and instances unable to satisfy it ought to be weeded out when the respondent obtains legal advice.

Although Mrs Liang was able to prove the legitimate provenance of some, but not all, of the funds the case turned on this lack of comprehensive evidence of provenance. The Court was satisfied that RBC's suspicion was properly held and declined to order the transfer of all assets.

This highlights the importance of compiling detailed evidence of provenance for anyone facing a "no consent" decision. Armed with that, customers can seek to persuade the institution holding their assets to act on their instructions; or the FIS to grant consent; or ultimately the Court to order that their instructions be complied with.

 

 

Contact

Abel Lyall

Abel Lyall

Partner | Guernsey

About Mourant

Mourant is a law firm-led, professional services business with over 60 years' experience in the financial services sector. We advise on the laws of the British Virgin Islands, the Cayman Islands, Guernsey, Jersey and Luxembourg and provide specialist entity management, governance, regulatory and consulting services.

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