Money Laundering (Jersey) Order 2008: Amendment: Law drafting instructions

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

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The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 7 March 2014:

Decision Reference: MD-C-2014-0033
Decision Summary Title :	Law Drafting Instructions for amendments to the Money Laundering (Jersey) Order 2008		Date of Decision Summary:	4 March 2014
Decision Summary Author:	Officer, Financial Services		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	WR - Further amendments to the Money Laundering (Jersey) Order 2008		Date of Written Report:	4 March 2014
Written Report Author:	Officer, Financial Services		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Law Drafting Instructions for amendments to the Money Laundering (Jersey) Order 2008 (the “Money Laundering Order” or “MLO”)
Decision(s): The Chief Minister approved that amendments should be drafted to the Money Laundering Order.
Reason(s) for Decision: In December 2013 Jersey was subject to a Progress Report by MONEYVAL, the body which monitors the Island for its compliance with International AML/CFT obligations. In that report a number of recommendations were made by the MONEYVAL secretariat which would require amendments to the Money Laundering Order. In early 2014 the Financial Crime Strategy Group, who advise on the Island’s AML/CFT regime, considered those amendments and consultation occurred with the relevant industry bodies. The Strategy Group concluded that it should be recommended to the Chief Minister that three specific amendments to the Money Laundering Order should be progressed to drafting.
Resource Implications: Law Drafting time will be required to draft these amendments to the MLO. There are no other resource implications for the States of Jersey as a result of this decision.
Action required: That Law Drafting Instructions for the amendments are forwarded to the Law Draftsman.
Signature: Senator I. J. Gorst		Position: Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Money Laundering (Jersey) Order 2008: Amendment: Law drafting instructions

FINANCIAL SERVICES

Chief Minister’s Department

5TH Floor, Cyril Le Marquand House, The Parade

St Helier, Jersey, JE4 8UL

Tel: +44 (0)1534 440449

CHIEF MINISTER

WRITTEN REPORT

Further amendments to the Money Laundering (Jersey) Order 2008

In December 2013 Jersey was subject to a Progress Report by MONEYVAL, the body which monitors the Island for its compliance with International Anti-Money Laundering and Countering the Financing of Terrorism obligations (“AML/CFT”).

In that report a number of recommendations were made by the MONEYVAL secretariat which would require amendments to the Money Laundering (Jersey) Order 2008 (the “Money Laundering Order” or “MLO”). Those recommendations were:

i) Simplified Customer Due Diligence (“CDD”) – residence of customer.
Moneyval considers that the application of simplified CDD should be limited to customers resident in countries that are compliant with Financial Action Task Force recommendations, regardless of the risk of the product or service provided.

ii) Higher Risk Business.
Moneyval considers that non-resident customers, private banking, legal persons or arrangements that are personal asset holding vehicles and companies that have nominee shareholders or shares in bearer form should all be considered to be high risk and subject to enhanced CDD measures.

iii) Simplified CDD - intermediaries.
Moneyval considers that all intermediaries (i.e. those acting on behalf of one or more third parties) should be subject to the full range of CDD measures, including the requirement to identify underlying third parties (and their beneficial owners), even in a simplified CDD scenario. It does not accept that “simplification” is the same as allowing nothing to be done – which may be the effect of current provisions in Article 17 of the MLO.

In early 2013 the Financial Crime Strategy Group (the body which advises on the islands AML/CFT regime) considered the suggested amendments and consultation occurred with the leading industry bodies. The Strategy Group concluded that it be recommended to the Chief Minister that three specific amendments should be progressed to drafting:

i) Simplified CDD – residence of customer.
Amend the MLO so that the current prohibition on applying simplified CDD under Article 18 of the MLO to customers with a connection to “enhanced risk states” is extended to cover any customer who is resident in a country that is the subject of a FATF public statement or is covered by its on-going process.

ii) Higher Risk Business.
Amend the MLO so that non-resident customers, customers benefitting from private banking (a term that would be covered more organically), customers that are personal asset holding vehicles and companies with nominee shareholders would all be subject to enhanced CDD under Article 15 of the MLO.

iii) Simplified CDD - intermediaries.
Amend Article 17 of the MLO so that:
In relation to “pooled” accounts, all underlying third parties with significant holdings (e.g. more than 25%) at the time of customer take-on are subject to simplified CDD measures (e.g. finding out the name and date of birth of the third party).
In relation to an intermediary representing a single underlying customer, the name and date of birth of that underlying customer is collected if the customer is an individual. Basic information will also need to be collected if the customer is a legal person or arrangement.

Officer, Financial Services

4 March 2014