Jersey Strengthens Anti-Money Laundering Legislation

Tax-News.com, London

02 November 2001

The UK's offshore island territory of Jersey has moved quickly to implement new legislation to counter terrorist funding threats, including the implementation of a Terrorist Financing Order, and intends to adopt the UN Convention for the Suppression of Terrorist Financing as soon as its domestic law has been amended.

The Terrorist Financing Order came into force on 10 October and is virtually identical to the legislation introduced in the City of London in recent weeks. The Order enables Jersey to freeze any assets held by suspects named by President Bush in the Executive Orders.

According to Phil Austin, Chief Executive of the finance industry's representative body, Jersey Finance:

"Jersey is also likely to incorporate in domestic law any enhancements to the Financial Action Task Force (FATF) recommendations to deal with terrorist financing adopted at the FATF Plenary at the end of October."

"We are calling on all jurisdictions both onshore and offshore to examine their regulations against financial crime and, where necessary, improve them as a matter of urgency."

"Regulators and law enforcement agencies have acknowledged the significant level of regulation in place in Jersey. However, other commentators often group all offshore centres together in some sort of 'catch all' classification that inaccurately implies we all too easily allow money laundering, and that we are cloaked in bank secrecy," said Mr. Austin.

"For its part, Jersey's laws against terrorism and laundering the proceeds of crime are at the cutting edge and our 'know your customer' rules equate with the best international practice. Jersey's anti money laundering defences were examined by an international evaluation team which included representatives from the US, UK and France and in 1999 concluded that the Island was "close to complete adherence" to the 40 recommendations of FATF."

Once Jersey has amended its domestic Law, the Prevention of Terrorism (Jersey) Law 1996, which has been given priority by the Island's law draftsman, the Island will seek the adoption of the UN Convention for the Suppression of Terrorist Financing. In essence, this means that Jersey will be able to try an individual for terrorist crimes, in particular for terrorist financing crimes, committed outside Jersey. The Island will then be fully compliant with the terms of the Convention.

"The Jersey authorities believe that the timescale now envisaged for this will be well ahead of that in almost all EU Member States," said Mr. Austin.

"The finance industry in Jersey supports the measures that the Island's Government and regulators are fast tracking through the Island's legislature, and we call on all other centres onshore and offshore to do the same without delay," added Mr. Austin. "Terrorist financing is a global problem and it has to be tackled by the Governments, regulators and finance industries around the world working together."

"We know that even with tough regulation in place, no jurisdiction can be 100 per cent risk free from finding a financial link with a terrorist organisation. But with the regulations and report mechanisms in place, it is far easier to

Jersey's standards of anti-money laundering regulation have already been the subject of favourable international comment, and the G7 Financial Stability Working Group on offshore centres places Jersey in Group 1 - those which meet international standards of financial regulation and international co-operation.

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