The Guernsey Financial Services Commission (GFSC) has fined Louvre Trust over a series of failures that exposed the local trust firm and the Bailiwick to a significant risk of financial crime.
The watchdog found that Louvre Trust (Guernsey) Ltd frequently failed to obtain adequate due diligence on client business relationships and failed to maintain adequate records.
"Through its systemic failings the Licensee had potentially enabled specific structures that it administered to be involved in money laundering or terrorist financing, " the regulator said.
The Firm has acted in a manner that could bring the Bailiwick into disrepute as an international finance centre"
"The potential to facilitate the movement of substantial amounts of funds, unhindered around the globe over a long period is of serious concern to the Commission. The Firm has acted in a manner that could bring the Bailiwick into disrepute as an international finance centre," it added.
The licensee and directors agreed to settle at an early stage, which was taken into account, and a 30% discount given on the penalty. The firm was fined £70,000 and five directors faced fines totalling £35,000.
In a statement after the GFSC decision was made public, Louvre Trust admitted to the failures in 2016 and said it has worked tireless to address the issues.
"We acknowledge that in 2016, Louvre Trust (Guernsey) Limited (LTG) required improvements in aspects of its corporate governance, compliance and risk assessment procedures. Working with the Guernsey Financial Services Commission (GFSC) we identified the areas that did not meet the standards of The Proceeds of Crime Regulations and the GFSC's Handbook.
"We are confident that our recent senior risk and compliance team appointments, alongside our updated frameworks, will ensure that LTG is able to operate at the high standards required by the regulator," the statement added.