DIRTY money will not be allowed to infiltrate Guernsey. Deputy Bailiff Geoffrey Rowland said that the island would prevent terrorists, criminals and fraudsters abusing the local finance industry.

Speaking at a global fraud conference yesterday, Mr Rowland was confident Guernsey’s judiciary, government, regulator and finance companies would continue to do all they could to bring any perpetrators to justice.

The island had responded vibrantly to a US-led crackdown on suspected terrorist assets and had a strong system in place to tackle dirty money.

‘It is clear that Guernsey is not and cannot be a safe haven for criminals and fraudsters,’ said Mr Rowland.

‘We have a framework that stands up to international scrutiny and which we should be very proud of. Government policies have ensured that we are not alienated, are being cooperative with other jurisdictions and are well-resourced to tackle criminals.’

He said it would be foolish to think that criminals would not continue to try to use local finance companies, but he was confident that they would be weeded out if the island maintained its high standards.

This was especially important as the finance industry was the powerhouse of the local economy.

‘We have had a very focused policy for the past two decades to ensure the island was not exploited by criminals.’

He said the island had rightly also become more pro-active in signing up to international agreements.

‘We have not improved our cooperation as such – it was first-class to begin with – but we are showing and publicising our commitment to the agreements for improving regulation and the instruments to fight crime,’ said Mr Rowland.

Also speaking at the Collas Day/Global Fraud Network conference, Advocate Mark Ferbrache said that Guernsey’s finance industry had to be extra vigilant following the US Patriot Act which, initiated in the wake of the 11 September attacks, aimed to crackdown on terrorist funding.

He warned that if the US used a heavy-handed and interventionist approach to freeze suspect assets, the island’s finance firms could get caught in the crossfire because local legislation might forbid the client being told.

He said that problems could arise if US authorities raised suspicions while a transfer of funds was in progress. The institution cannot tip off the client because it is under investigation, or pay away because of US demands.

The client, having put money in a legitimate tax-avoidance scheme, would then demand his money, possibly by a court order.

Listening to the concerns, Chief Minister Laurie Morgan said: ‘We do not need any legislation at the moment but we need to respond to the effects of the act which could affect those who have suspect assets in the USA.

‘We will continue the policy of cooperating with international institutions however inconvenient that may be sometimes. We have to balance the interest of the professional and collective good and try to stamp out financial crime and fraud.’

Mr Rowland said: ‘I am in no doubt that the act has encouraged the US authorities to take a very aggressive approach to tackling problems in jurisdictions across the world but, fortunately, Guernsey is not alone in fighting the proliferation of litigation that will undoubtedly result.’

Mr Rowland said that the island’s independent and high-quality judiciary and appeal system should reassure the industry that innocent people had nothing to fear, but those dealing in dirty money did.