Guernsey has been the venue for an evaluation by the Financial Action Task Force's regional proxy, MONEYVAL, of its anti-money-laundering regime this month.

Guernsey has been the venue for an evaluation by the Financial Action Task Force's regional proxy, MONEYVAL, of its anti-money-laundering regime this month. Methods have become more stringent since the Parisian organisation issued an edict on the subject last year.

This is part of the fourth round of the FATF's 'mutual evaluations', a term that appears to be less and less accurate as the years go on. In previous years, a jurisdiction such as France would send some civil servants to evaluate the UK: instead, the FATF or one of its regional bodies tends to send its own four-man team off to the jurisdiction in question. It is possible that the old title has stuck because of the preferences of the Organisation of Economic Co-operation and Development, the FATF's 'big brother' in whose building its offices are situated.

The new method comprises two efforts or stages. The first is the technical compliance assessment which "addresses the specific requirements of the FATF recommendations, principally as they relate to the relevant legal and institutional framework of the country, and the powers and procedures of the competent authorities." The FATF always uses the word 'framework' as a vague byword for 'thing', in line with standard practice in the European Union; when US authorities use it, they mean 'body of law.'

The second thrust of enquiry is the 'effectiveness assessment', which looks at whether the jurisdiction obeys the FATF recommendations in a good or adequate way. It looks at the jurisdiction's performance against a defined set of results that are central to the FATF's idea of a good AML system. The focus of the effectiveness assessment is therefore on the extent to which the legal and institutional set-up produces the results that the FATF expects. The inspectors start by looking at the nature and extent of the national or local money-laundering risks and the relative importance of different parts of the financial sector and 'gatekeepers' such as lawyers and accountants.