Countries/Jurisdictions of Primary Concern - Jersey
Jersey, the largest of the Channel Islands, is an international financial center offering a sophisticated array of offshore services. Jersey is a self-governing British Crown Dependency with its own parliament, government, legal system, and jurisprudence. The UK is constitutionally responsible for Jersey’s defense and international representation, while the Island has autonomy in relation to its domestic affairs, including taxation and the regulation of its financial services sector. Jersey can negotiate international agreements within the parameters of Letters of Entrustment provided by the UK Government, and enter into such agreements in its own name, albeit that the UK remains ultimately responsible in international law for such agreements.
The financial services industry is a key sector, with banking, investment services, and trust and company services accounting for approximately half of Jersey’s total economic activity. As a substantial proportion of customer relationships are with nonresidents, adherence to know-your-customer rules is an area of focus for efforts to limit illicit money from foreign criminal activity.
Jersey also requires beneficial ownership information to be obtained and held by its company registrar and its regulated trust and company service providers, which can be readily accessed by law enforcement and tax authorities. Island authorities have undertaken successful measures, as recent high profile cases have shown, to protect the financial services industry against the laundering of the proceeds of foreign political corruption.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/
Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO
criminalizATION OF money laundering:
“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes
Are legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO
KYC covered entities: Banks; money exchanges and foreign exchange dealers; financial leasing companies; issuers of credit and debit cards, traveler’s checks, money orders, and electronic money; securities brokers, dealers, advisers, and managers; safekeeping, trust, fund, and portfolio managers; collective investment schemes and operators; insurance companies and brokers; casinos; company and trust service providers; real estate agents; dealers in precious metals and stones and other high-value goods; notaries, accountants, lawyers, and legal professionals
Number of STRs received and time frame: 1,632 in 2014
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks; money exchanges and foreign exchange dealers; financial leasing companies; issuers of credit and debit cards, traveler’s checks, money orders, and electronic money; securities brokers, dealers, advisers, and managers; safekeeping, trust, fund and portfolio managers; collective investment schemes and operators; insurance companies and brokers; casinos; company and trust service providers; real estate agents; dealers in precious metals and stones and other high-value goods; notaries, accountants, lawyers, and legal professionals
money laundering criminal Prosecutions/convictions:
Prosecutions: 0 in 2014
Convictions: 0 in 2014
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
In lieu of a mutual evaluation, a report was prepared by the IMF’s Financial Sector Assessment Program. The report can be found at: http://www.imf.org/external/pubs/ft/scr/2009/cr09280.pdf
Enforcement and implementation issues and comments:
Under Jersey law, the Minister for External Relations (MER) has the power to give a direction to a relevant person to require that person to undertake enhanced customer due diligence (CDD) measures, provide information and documents, or limit or cease a business relationship if one or more of the following conditions are met in relation to a country or territory outside Jersey: the FATF advises there is a risk of money laundering or terrorism financing in a country or territory; the MER reasonably believes there is a risk of money laundering or terrorism financing in a country or territory, by the government of a country or territory, or by persons resident or incorporated in a country or territory, that poses a significant risk to Jersey; the MER believes the development or production of weapons in a country or territory, or anything that facilitates such development or production, poses a significant risk to Jersey.
Jersey does not enter into bilateral mutual legal assistance treaties. Instead, in accordance with its laws, it is able to provide mutual legal assistance to any jurisdiction, including the United States. The United States and Jersey maintain a “special relationship” that includes a reporting regime based on the Foreign Account Tax Compliance Act (FATCA).
Under the Terrorist Asset Freezing (Jersey) Law 2011 a person designated by a European Council Regulation or the UK for terrorist purposes is automatically designated in Jersey, and any funds or economic resources of the designated persons are subject to asset freezes. In addition, a person may be designated if the Jersey Minister for External Relations reasonably suspects that the person is, has been involved in, or is connected with terrorist activity.
More recently, the Proceeds of Crime and Terrorism (Miscellaneous Provisions) (Jersey) Law 2014 came into force on August 4, 2014. The Law brings all of the provisions relating to the laundering of criminal proceeds, including the restraint and confiscation of such proceeds, into one law (the Proceeds of Crime (Jersey) Law 1999); addresses noted technical deficiencies; and aligns specific provisions with requirements of the UN Convention against Transnational Organized Crime and the Council of Europe Convention 141 on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, to allow for these conventions to be extended to Jersey.
The key rationale for creating one consolidated set of AML provisions is that, under the former provisions, the prosecuting authorities had to establish at any early stage whether the powers of Jersey’s drug trafficking, terrorism, or criminal proceeds law should be used during an investigation. In the early stages of an investigation, there may not have been sufficient evidence to establish which of these laws should be applied to the proceeds of criminal conduct, yet a decision had to be made as to which of the three laws’ powers would be exercised. In addition to these practical issues, previous money laundering offenses varied in scope and material elements across the three laws. The prosecuting authorities also believed the previous money laundering offenses were too numerous and specific. The decision was made to produce a single statute which addresses the requirements of the jurisdiction more effectively.
Jersey authorities continue to indicate concern regarding the incidence of domestic drug-related crimes. The customs and law enforcement authorities devote considerable resources to countering these crimes.
Jersey, not being a sovereign state, cannot sign or ratify international agreements in its own right unless entrusted to do so by Letters of Entrustment provided by the UK government, as is the case with tax information exchange agreements. Rather, the UK is responsible for Jersey’s international affairs and, at Jersey’s request, may arrange for the UK’s ratification of any international instrument to be extended to Jersey. The UK’s ratification of the 1988 UN Drug Convention was extended to include Jersey in 1998; its ratification of the UN Convention against Corruption was extended to include Jersey in 2009; and its ratification of the International Convention for the Suppression of the Financing of Terrorism was extended to Jersey in 2008. The UK is in the process of extending the UN Convention against Transnational Organized Crime to Jersey.
Where reliance is placed by a covered entity on identification measures already performed by a third party on a prospective customer (in accordance with criteria established in legislation), Jersey requires that covered entity to obtain all necessary CDD information from the third party before the beginning of the business relationship with the customer. However, simplified identification measures (in accordance with criteria established in legislation) may be applied to a customer that is acting on behalf of one or more third parties. Jersey authorities should explicitly require that all covered entities obtain all necessary CDD information from the intermediary at the beginning of a relationship and should consider requiring covered entities to perform spot-testing of an intermediary’s performance of CDD obligations. Jersey’s authorities are consulting on a change to CDD requirements that would strengthen due diligence obligations for foundations.