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 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.
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 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. A large proportion of suspicious activity reporting is tax-related. In January 2015, Jersey published a typologies report outlining laundering methods and techniques of concern including tax evasion, corruption, laundering the proceeds of corruption with the involvement of politically exposed persons (PEPs), the use of money service businesses, and the use of pre-paid cards. 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. Jersey requires beneficial ownership information to be obtained and held by its regulated trust and company service providers and by its company registrar in a central registry, which can be accessed by law enforcement and tax authorities.
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; life insurance companies; collective investment schemes and operators; trust and company service providers; 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; 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: 1,979: January 1 - November 13, 2015
Number of CTRs received and time frame: Not applicable
STR covered entities: Banks; life insurance companies; collective investment schemes and operators; trust and company service providers; 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; 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: 3 in 2015
Convictions: 1 in 2015
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Through a resolution of the Council of Europe, Jersey formally participates in the mutual evaluation procedures of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a FATF-style regional body. 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:
Jersey is a customary law jurisdiction. Accordingly, the jurisdiction does not have a criminal/penal code.
According to the Proceeds of Crime (Jersey) Law 1999 and the Terrorism (Jersey) Law 2002, (both as amended in 2014), it is necessary to have a conviction in order to obtain a confiscation order for the proceeds of crime, but it is not necessary that a person be convicted of the predicate offense upon which the criminal charge of money laundering is brought. Predicate offenses are all crimes with a punishment of imprisonment of one year or more.
Jersey does not enter into bilateral mutual legal assistance treaties. The Investigation of Fraud (Jersey) Law 1991 provides powers for the Attorney General (AG) to investigate a suspected offense of serious or complex fraud, wherever it is committed. The Criminal Justice (International Co-operation) Law 2001 provides a mechanism for jurisdictions to request assistance from the AG to obtain evidence for use in an overseas court in criminal proceedings. The Government of Jersey reports the AG frequently assists other jurisdictions in this regard. In 2015, the guidelines, which stipulated a minimum threshold requirement of £2 million (approximately $2.8 million) in relation to mutual legal assistance, were abolished in order to encourage foreign jurisdictions to make assistance requests. An asset sharing agreement between the United States and Jersey regarding the sharing of confiscated or forfeited assets or their equivalent funds came into force in April 2015.
A number of changes in policy, law, and implementation of regulations have come into force in 2015. The definitions of “property” in the Proceeds of Crime Law and Terrorism Law have been extended to adhere to international standards; provisions of the Terrorist Asset-Freezing (Jersey) Law 2011 now automatically extend to natural or legal persons, groups, or entities pursuant to UNSCRs 1267 and 1988; and the definition of funds subject to freezing now explicitly covers assets “jointly” or “indirectly” owned, held, or controlled by designated persons. The effect of these changes is to give immediate legal effect in Jersey to UN designations.
The Proceeds of Crime (Financial Intelligence) (Jersey) Regulations 2015 formally establishes in the Proceeds of Crime Law the Joint Financial Crimes Unit of the States of Jersey Police (JFCU) as Jersey’s financial intelligence unit. The JFCU has existed for some time but this legislation formalizes its existence and powers in legislation. The JFCU now also has the power to gather additional information from financial institutions and designated non-financial businesses and professions (DNFBPs) in circumstances where the JFCU has reasonable knowledge or belief that they hold information relevant to the analysis of intelligence it holds. Jersey’s authorities are consulting on a change to customer due diligence (CDD) requirements that would strengthen due diligence obligations for foundations.
The Money Laundering (Jersey) Order 2008 has been amended to further clarify the application of identification measures to trusts and to require policies and procedures to be maintained for determining whether a business relationship or transaction is with persons connected to an organization subject to sanctions or persons who are themselves subject to sanctions.
Jersey’s authorities announced plans to regulate and supervise the activity of virtual currency exchanges beginning in 2016. The proposals will cover those persons who exchange fiat currency into a virtual currency (and vice versa) by way of business.
In 2015, the Jersey Financial Services Commission substantially revised AML/CFT handbooks for financial institutions and DNFBPs, the accounting and legal sectors, real estate agents, and high-value dealers. In particular, guidance provided on identification of beneficial owners and controllers is addressed. Also in 2015 the Commission was given authority to impose financial penalties on regulated businesses of up to £4 million (approximately $4.3 million) for significant and material breaches of the Codes of Practice, including contraventions of the AML/CFT Handbook for financial institutions and DNFBPs.
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. Jersey is seeking to obtain an Entrustment from the UK Government to enter into any MLAT that may be necessary. 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 extended its ratification of the UN Convention against Transnational Organized Crime to include Jersey on December 17, 2014. On January 28, 2015, the United States and the Bailiwick of Jersey entered into an Agreement Regarding the Sharing of Confiscated or Forfeited Assets or Their Equivalent Funds, which went into effect on April 24, 2015.
There is no requirement to automatically apply enhanced CDD measures to a domestic politically exposed person (PEP). Instead, a covered entity must take the status of an individual who has been entrusted with a prominent public function in Jersey (or who is an immediate family member or close associate of such an individual) into account in its risk assessment of such individuals. Jersey should ensure identified domestic PEPs are subject to enhanced due diligence requirements in accordance with international recommendations.