07 September 2009

Jersey FSC: Amendment to Money Laundering

The Commission has published today a Consultation Paper that sets out proposed amendments to the Money Laundering (Jersey) Order 2008 (the “Order”).

The Order requires businesses within its scope to apply customer due diligence measures, to keep records, and to have policies and procedures in place to prevent and detect money laundering and terrorist financing. Businesses that are covered by the Order include banks, investment businesses, trust companies, lawyers, accountants, and estate agents.

The main purpose of the draft Money Laundering (Amendment No. 4) (Jersey) Order 200- (“Amendment No. 4”) is to deal with some of the technical points that have been raised in a recent review of Jersey’s framework to prevent and detect money laundering and terrorist financing by the International Monetary Fund (the “IMF”). That review has now been completed and the IMF’s final report is expected shortly.

The paper also considers the possibility of extending the power that is given in Article 23C of the Order to the Minister for Treasury & Resources to apply countermeasures, where this may address a particular risk of money laundering or terrorist financing.

The main effect of Amendment No. 4 would be to:
  • Clarify the application of customer due diligence measures to trusts and other legal arrangements.
  • Clearly set out the records that a Money Laundering Compliance Officer and Money Laundering Reporting Officer must have access to in order to carry out their statutory functions.
  • Require particular attention to be paid to implementing policies and procedures that are sufficient to prevent and detect money laundering and terrorist financing in subsidiaries and branches that are situated in countries and territories that do not, or insufficiently apply, the Financial Action Task Force Recommendations.
  • Restate the requirement that customer information must always be collected before a relationship is established - where a customer is introduced by one business to another.
    Amend the scope of some of the concessions that may be used when applying due diligence measures to a customer who is considered to present a low risk of money laundering or terrorist financing.
  • The proposed amendments have been discussed with the Commission’s Steering Group for the Prevention and Detection of Money Laundering and Terrorist Financing.

A copy of the Consultation Paper can be downloaded from the Commission’s Website by clicking here

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