Jersey's Council of Ministers is considering extending the controls which exist to prevent the jurisdiction being used by money launderers or for financing terrorism.
The review is part of the preparation for next year’s review of Jersey’s performance as a financial centre conducted by the International Monetary Fund (IMF).
Last week, a public consultation was launched on extending the law, inviting views from business people. The proposals in the consultation papers would mean that new business sectors, such as estate agents, solicitors and businesses which deal in high value transactions, such as boats, cars and jewellery would be covered by the regulations.
The Council of Ministers has set up a group to oversee the preparations for the IMF visit. The group will also oversee the Island’s strategy for preventing Jersey businesses being used by criminals engaged in money laundering or financing terrorism.
Much preparatory work has already been completed and more is planned in the coming months. The Group (AML/CFT Strategy Group) has, with the approval of the Council of Ministers, now issued two consultation papers on further proposals to update and extend the Island’s AML/CFT framework, taking steps to comply with the latest international standards.
When the IMF undertakes its review it will be testing for active compliance with international standards. The proposals in the consultation papers suggest how changes could be made in Jersey to bring the Island’s regulations into line with those standards. Representatives of the IMF will visit Jersey, Guernsey and the Isle of Man in 2008 and will assess how each complies with international standards in anti-money laundering and countering the financing of terrorism.
The first of two consultation papers sets out proposals which would require a number of business sectors to comply for the first time with laws which prevent Jersey businesses being used by people seeking to launder money or finance terrorists. The business sectors that would be affected are:
The second consultation paper proposes a legal framework which would establish a mechanism for the supervision of these businesses. It would require the businesses to make provision to guard against being used by persons seeking to launder money or finance terrorists.
Businesses which are already required to comply with these regulations, but whose compliance is not currently overseen by a supervisory authority, will become subject to oversight by such an authority. These businesses include: money service businesses (bureaux de change, money transmitters and cheque cashers); issuers of electronic money; lenders; certain traders in financial instruments; money brokers; and persons who provide safe custody services.
Commenting on the proposals, Martin De Forest-Brown, the States Director of International Finance said:
"It is imperative that Jersey gets a good result from the IMF review next year. We have established an excellent reputation as a well regulated international financial services centre and we must continue to be vigilant and flexible, ensuring that we take all necessary steps to maintain our position.
"Compliance with the highest standards in anti-money laundering and countering the financing of terrorism is the biggest single test for any offshore financial centre wanting to maintain its position in this global industry. We should take all necessary steps to maintain the success of Jersey’s finance industry, because it is so vital for our prosperity and maintains our high standard of living.
"Complying with the standards expected by the IMF, or other similar international agencies, is what we have to do to ensure the future success of our industry. If we want to be a global player, we have to play by their rules. I hope that Island businesses will respond positively to our proposals, because they all benefit from the wealth which the financial services industry brings."
De Forest-Brown added:
"While the proposals will result in estate agents and high value goods dealers being subject to such legislation for the first time, the work involved will be directly related to the level of risk which each business faces. In many cases, this should not be great."
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