Jersey Continues To Beef Up Anti-Money Laundering Legislation

by Amanda Banks, Tax-News.com, London

16 November 2001

In the face of a renewed assault by the French authorities over co-operation with the international fight against terrorist finance and money laundering, how has the crown dependency of Jersey responded? Not with anger, it is becoming clear, but by beefing up its legislation and regulatory procedures in order to ensure that it will be bullet proof against any future accusations.

In a 400 page report issued on October 10th, French Socialist deputy Arnaud Monteburg launched a vitriolic attack on the City of London and the UK crown dependencies, accusing them of hindering international investigations. 'The island is a haven for dirty money,' he stormed. 'In Jersey, requests for co-operation from European investigating magistrates are subjected to obsessive legal nit-picking. They're preventing us from fighting money-laundering because they're making a living off it.'

However, Jersey's Attorney General, William Bailhache accepts this criticism philospohically: 'This is an area where the French and Anglo-Saxon legal systems don't fit well,' he told Time magazine recently, explaining that under Jersey law, French investigators are not endowed with the same authority in a court of law.

However, the island is not attempting to hide behind the legal system, and has enacted significant amounts of new legislation in the wake of the September 11th terrorist attacks. 'We're a small jurisdiction and we're well aware how easy it is for outsiders to criticize our finance industry. We're not going to allow that to happen,' Mr Bailhache pledged.

Most recently, the jurisdiction introduced a law obliging trust and company service providers to obtain an operating license from the Financial Services Commission, in much the same way as banks and investment funds have always been obliged to. This license commits the organisation to record the beneficiaries of all assets handled, provide adequate anti-money laundering training for staff, and report all suspicious transactions to the authorities.

And ironically, on the same day as the French report was released, the Terrorist Financing Order came into force in Jersey. The order allows the jurisdiction's authorities to freeze the assets of suspects named by US President George Bush in the Executive Orders. The island is now seeking the adoption of the UN Convention for the Supression of Terrorist Financing, which when adopted will mean that Jersey will be able to try an individual for terrorist crimes committed outside the island.

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