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Jersey's Money Service Businesses Face Tougher Regulation

by Robert Lee, Tax-News.com, London

24 November 2006


The Jersey Financial Services Commission is proposing to tighten anti-money laundering rules governing money service businesses such as bureaux de change, money transmitters and cheque cashers.

Although money service businesses are already required by the Money Laundering (Jersey) Order 1999 to have systems and training to forestall and prevent money laundering, there is no body responsible for ensuring that such businesses implement the requirements of the Money Laundering Order effectively.

According to the JFSC, the absence of such an oversight regime means that Jersey falls below international standards set by the Financial Action Task Force, a fact which was noted by the International Monetary Fund (IMF) in its 2003 assessment on the supervision and regulation of the financial sector in Jersey.

The proposed legislation, which has been set out in a new consultation paper, will affect those carrying on the following activities:

  • Foreign currency exchange. This will include post offices, travel agents, and hotels.
  • Money transmission (or any representation of money, such as travellers’ cheques). This will include banks and those offering money transfer services, including some issuers of electronic money.
  • Third party cheque cashing. This will include shops that, by arrangement with a bank, cash cheques made payable to customers, e.g. cashing pay cheques.

The Commission’s intention is that only the largest providers of money service business will have to seek the prior authorisation of the Commission to carry on money service business. To achieve this, the Commission is proposing an exemption that will allow a person with money service business turnover at or below a prescribed amount (currently a figure of GBP50,000 is suggested in the consultation paper) to lawfully carry on money service business after simply notifying the Commission of its intention to do so.

The Commission's consultation on the proposals concludes on 1 February, 2007.


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