Jersey

CENTRAL AUTHORITY FOR REPORTING

The Joint Financial Crimes Unit of the States of Jersey Police and Customs Forces (JFCU).

The JFCU is responsible for receiving, collating and analysing reported transactions suspected of being linked to money laundering/terrorist financing. It is also responsible for investigating drugs trafficking offences as well as serious and complex financial crimes, such as Fraud.

The JFCU is also the conduit for assisting international law enforcement agencies, and facilitates information sharing and co-operation when the matter relates to Jersey.

ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

Yes.

NAME THE LAWS REGARDING ANTI-MONEY LAUNDERING PROCEDURES.

Main Primary Legislation:

• Drug Trafficking Offences (Jersey) Law 1988, as extended by the Drug Trafficking Offences (Designated Countries and Territories) (Jersey) Regulations 1997;
• Proceeds of Crime (Jersey) Law 1999, as extended by the Proceeds of Crime (Designated Territories) (Jersey) Regulations 1999 (the "PC(J)L 1999");
• Terrorism (Jersey) Law 2002 (Jersey’s anti-money laundering and anti-terrorism primary legislation);
• Proceeds of Crime (Supervisory Bodies)(Jersey) Law 2008 (the law which provides for the oversight of lawyers for AML/CFT compliance.)

Secondary Legislation:

• Money Laundering (Jersey) Order 2008

Guidance Notes and updates:

• The Jersey Financial Services Commission: the Anti-Money Laundering Guidance Notes for the Finance Sector regulated under the Regulatory Laws (the "Guidance Notes"). The Guidance Notes contain statutory and regulatory requirements and present ways of complying with these requirements;
• The Jersey Financial Services Commission: AML/CFT Consolidated Handbook for the Legal Sector;
• The Jersey Financial Services Commission: Handbook for the Prevention and Detection of Money Laundering and the Financing of Terrorism for the Accountancy Sector.

Sector specific AML/CFT Handbooks have been issued for Estate Agents and High Value Dealers and are currently being written for Banks, Trust Company Businesses and Funds.

All of these Handbooks are available online, free of charge at the Commission’s website.

Jersey’s Royal Court is obliged to take the contents of the Handbooks into account when determining if a financial services business has complied with the Order.

All of the requirements of the above legislation apply to “financial services businesses” as defined in Schedule 2 to the Proceeds of Crime Law 1999, which includes all prudentially supervised and regulated businesses as well as the legal and accountancy sector when carrying out specific activities, and estate agents and high value goods dealers.

As a result of these new sectors being brought into the AML/CFT regime for the first time, the new sectors, such as the legal sector, must fully comply with the Money Laundering (Jersey) Order 2008 in respect of systems and training to forestall and prevent money laundering, customer due diligence procedures, record-keeping procedures and reporting procedures.

Following recent amendments to the Money Laundering Order, there is now also:

• A requirement to send suspicious activity reports to the Jersey Financial Crimes Unit (Jersey’s FIU) using a form approved by the Island’s Minister for Treasury and Resources;
• A requirement to produce more information relating to a disclosure if the Joint Financial Crimes Unit asks for it;
• A requirement to conduct "enhanced due diligence" when a customer has a connection with a country or territory which does not apply (or inadequately applies) the Financial Action Task Force's "40+9" recommendations;
• A new power to allow the Minister for Treasury and Resources to impose additional restrictions on customers situated or incorporated in countries or territories which do not (or inadequately) apply the FATF recommendations. [1]

IN ADDITION TO THESE LAWS, IS THERE ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS CURRENTLY IN PLACE?

The Jersey Financial Services Commission has issued AML/CFT Consolidated Handbook for the Legal Sector. This guidance is available here.

UNDER WHAT CIRCUMSTANCES IS A LAWYER UNDER THE OBLIGATION TO REPORT?

Direct reporting obligations are contained within Article 18A of the Drug Trafficking Offences (Jersey) Law 1988 and Article 20 of the Terrorism (Jersey) Law 2002, whereby a person commits an offence if he fails to report to the JFCU information leading to his knowledge or suspicion that another person is engaged in drug money laundering or terrorist financing where that information came to his attention in the course of his trade, profession, business or employment. The direct reporting obligations, however, are not applied where a professional legal adviser obtained the information in privileged circumstances, unless that information came to him from a person with a view to furthering a criminal purpose. The penalty for these offences is up to 5 years imprisonment and/or an unlimited fine.

Reporting provides a defence from money laundering offences contained within Article 32 (assisting another to retain the benefit of criminal conduct) and Article 33 (acquisition, possession or use of the proceeds of criminal conduct) of the PC(J)L and Article 17 (assisting another to retain the benefit of drug trafficking) and Article 17A (acquisition, possession or use of property representing proceeds of drug trafficking) of the Drug Trafficking Offences (Jersey) Law 1988.

Whilst there is no exemption for information obtained in privileged circumstances, Articles 40 (investigations relating to the proceeds of criminal conduct) and 41 (authority for searches) of the PC(J)L and the equivalent provisions contained within Article 19 and 20 of the Drug Trafficking Offences (Jersey) Law 1988, do not permit the police to have access to privileged information.

LAWYER RESPONSIBILITY/LIABILITY

Jersey’s primary money laundering legislation provides that reports made to the JFCU in accordance with the legislation shall not be treated as a breach of any restriction upon disclosure imposed by any statute or contract or otherwise, and shall not involve the person making it in liability of any kind (Article 32 and 33 of the PC(J)L, Articles 17, 17A and 18A of the Drug Trafficking Offences (Jersey) Law 1998 and Article 21 of the Terrorism (Jersey) Law 2002.

CLIENTS IDENTIFICATION AND VERIFICATION

The obligation for lawyers to comply fully with the anti-money laundering requirements as set out in the Money Laundering Order (including client identification and verification) applies to:

• The business of providing services by independent legal professionals; and
• Independent legal professionals means those who by way of business provide legal or notorial services to third parties when participating in financial or immovable property transactions concerning any of the following:
  
  
  
  • The buying and selling of immovable property or business entities;
  • The managing of client money, securities or other assets;
  • The opening or management of bank, savings or securities accounts;
  • The organisation of contributions necessary for the creation, operation or management of companies; or
  • The creation, operation or management of trusts, companies or similar structures.

LAWYERS PROSECUTED FOR MONEY LAUNDERING OFFENCES

No information available.

HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

There is currently no FATF Mutual Evaluation Report on Jersey. The International Monetary Fund visited Jersey in November 2008 and part of their visit was focused on AML/CFT compliance with international standards, including Designated Non Financial Business and Professions (“DNFBPs”), which includes the legal sector. Their report is currently awaited. [2]

In the mean time, there is an IMF report available from the Offshore Group of Banking Supervisors (OGBS) website.

Information supplied by:

Nicholas Troy,
Jersey Financial Services Commission
E-mail: n.troy@jerseyfsc.org

Sources:

1 Marcus Simpson, ‘Jersey proposes to amend anti-money laundering laws‘, 24 October 2008; 
2 Martin Coley, “Jersey eyes secondary legislation amendments”, 24 October 2007.

Further Reference: