GUERNSEY Law and Practice Contributed by: Matthew Brehaut and Tom Carey, Carey Olsen
11.2 Concerns Raised by Open Banking The Data Protection (Bailiwick of Guernsey) Law 2017 introduced a data protection regime in Guernsey that is largely equivalent to the prin - ciples of the GDPR. As such, the issues faced by the EU in balancing the Second Payment Services Directive ( “PSD2” ) (which permits third parties to access account information and offer new financial services) with the requirements of the GDPR (which seeks to protect that infor - mation) will need to be similarly addressed in Guernsey. To that end, the authors note that the European Data Protection Board published guidelines on balancing PSD2 with the GDPR (which include obtaining explicit consent from the consumer and taking responsibility for data breaches) and expect Guernsey businesses to be under the same direction. Whether this bal - ance is achieved by blockchain initiatives involv - ing encryption or otherwise are all considera - tions that can be explored by stakeholders. As a major offshore finance centre, Guernsey is subject to money-laundering and terrorist- financing risks. In order to meet the international requirements of FATF, Guernsey has developed a National Risk Assessment (NRA) to help identify, assess and understand the risks it faces. This better equips the island to mitigate such risks, which include Guernsey businesses being used to facilitate terrorist financing and the laundering of proceeds-generating crimes such as corrup - tion (including illicit enrichment). In December 2023, Guernsey carried out its second NRA ( “NRA2” ) of the money-laundering and terrorist- financing risks it faces. 12. Fraud 12.1 Elements of Fraud
As with the first NRA, the finding of NRA2 with regard to money laundering risks is that ‒ as an international finance centre with a low domestic crime rate ‒ Guernsey’s greatest money-laun - dering risks come from the laundering of the proceeds of foreign criminality. The underlying offences most likely to be involved are bribery and corruption, fraud, and tax evasion, followed by drug trafficking. The money-laundering threats from domestic criminality principally relate to fraud, drug traf - ficking, and tax evasion, which are the most sig - nificant domestic proceeds-generating crimes. These offences usually involve small-scale activ - ity that is carried out entirely within the jurisdic - tion and generates low levels of proceeds. The principal relevance of fraud in Guernsey, therefore, is foreign fraud resulting in money- laundering risks to the island. 12.2 Areas of Regulatory Focus Please refer to 14.1 Elements of Fraud . 12.3 Responsibility for Losses In Guernsey, the situations in – and the extent to – which a fintech service provider would be held responsible for losses suffered by a customer will be determined by the liability provisions set out in the agreement between the service provider and the customer. It is not possible for the ser - vice provider to exclude liability for its own fraud (including a fraud perpetrated by its employees or agents). It is possible, in certain circumstanc - es, for the service provided to exclude liability for losses suffered by a customer that were caused by a fraud perpetrated by an external party.
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