The Association of International Life Offices is planning to set up minimum standards on anti-money-laundering measures to stop competition on compliance between members.
Ailo says the new standards are designed to protect against the reputational risk to the offshore industry of members competing on the basis of which jurisdiction or provider has the lightest-touch anti-money laundering regime.
The initiative will also standardise procedures, making it easier for IFAs to deal with providers once the scheme goes live on October 1, when all member companies are expected to be compliant with the standards.
The new standards introduce minimum requirements covering evidence of identity, specific requirements on corporate and trustee applications and information on source of wealth and funds.
Under the new standards, client identification will still be allowed by IFAs because of their regulated status.
Existing offshore business will also be covered by the standards, with minimum inf-ormation regarding identity required for assignments, top-ups and payments to and from third parties.
More than 30 Ailo member companies operate across seven different regulatory and legislative frameworks in the Channel Islands, Ireland, Isle of Man and Luxemburg.
Member companies will be able to promote the fact that they operate to the minimum working practices agreed by Ailo.
Chairman Alan Morgan Moodie says: “We recognise that it is in nobody's interest, other than the money launderer, for member companies to compete on compliance.
“This initiative is intended to strengthen defence across the industry and demonstrate that Ailo is keen to work with regulators and other international bodies to promote quality business and minimise inconvenience to IFAs by varying standards in different jurisdictions.”