At lunch yesterday I spoke to a friend about SAFE HARBOURS in Jersey for AML matters.

My thought on this important matter was that I was not sure there were formal legal, safe harbours albeit it is important to maintain the principle of providing legal, safe harbour to businesses that follow the guidance?

The issue is that if criminals found a way to launder proceeds [benefits] of crime despite the safe harbour compliant controls, and they will, there will always be a lag in raising the standards. However, this could be managed by directing law enforcement resource at the emerging trends.

If a clear safe harbour were provided supervisors would find firms much more cooperative in meeting specific requirements, to take advantage of it. The intelligence-led risk assessment would mean the specific requirement could be flexed to meet the risks.

In the UK the Treasury approves the JMLSG Guidance, and this is important although not fundamental.

A court is likely to have almost the same regard to industry guidance prepared under the present JMLSG due process and widely followed by the financial sector, whether or not it had been Treasury approved. Some non-JMLSG industry sectors have consciously chosen not to offer their industry-prepared guidance for Treasury approval, in the belief that a court would in practice have equal regard to the ‘best practice’ nature of their guidance.

Treasury (government) approval is, however, widely seen as a safe harbour for firms that follow the JMLSG Guidance.

Simply, the degree of legal ‘certainty’ that government approval provides should not be underestimated.