Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013

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A decision made on 18 January 2013:

Decision Reference: MD-C-2013-0006

Decision Summary Title :

Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013

Date of Decision Summary:

16 Jan 2013

ref. 25/32/3

Decision Summary Author:

International Relations

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 :

Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013

Date of Written Report:

16 Jan 2013

Written Report Author:

International Relations

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject: Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013

Decision(s): The Minister –

(i) in pursuance of Article 6 of the Money Laundering and Weapons Development (Directions) (Jersey) Law 2012, and after consultation with the Jersey Financial Services Commission, decided to make the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013; and

(ii) in pursuance of Article 9 of the Money Laundering and Weapons Development (Directions) (Jersey) Law 2012, decided to grant licenses to exempt certain transactions and business relationships that are subject to the provisions of the Order.

Reason(s) for Decision:

This action arises from the calls from the Financial Action Task Force (FATF) for countries to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism risks emanating from Iran. The FATF (the global standard setting body for anti-money laundering and combating the financing of terrorism) renewed these calls with urgency on 28th October 2011 and noted its particular and exceptional concern about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.

In light of these risks to Jersey’s interests the Chief Minister has, in pursuance of the Money Laundering and Weapons Development (Directions) (Jersey) Law 2012, previously made the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2012. The Order protects the financial services sector in Jersey from the risk of unwittingly being used to facilitate money laundering activities and financing of terrorism, and signals to Iran and the international community that Jersey considers this risk to be significant.

The Order requires the financial services sector in Jersey to cease all business relationships and transactions with Iranian banks and their branches and subsidiaries, including the Central Bank of Iran.

The 2012 Order expires after a period of one year after it was made, i.e. on 19 January 2013. It is recommended, in line with current policy, that a further Order should be made to extend in identical terms the existing prohibitions for a further year.

Licences

In addition, the Chief Minister is asked to approve certain licences which may be granted under Article 9 of the Law. These measures exempt transactions with designated persons for certain purposes and in certain circumstances:

Humanitarian activities, medicine, foodstuffs and healthcare;
Personal remittances under € 40,000 which are not in the course of business;
Provision of insurance to Iranian persons, entities or bodies which is exempt under Regulation (EU) No.961/2010;
Holding of asset-frozen Iranian banks’ accounts; activities which would otherwise be exempt under Article 20 of Regulation (EU) No.961/2010 (asset freezing exemptions); and activities of a relevant person which are currently licensed under the asset-freezing regime;
Relevant persons holding accounts in the name of designated persons.

Resource Implications: There are no resource implications arising from this decision.

Action required:

The Chief Minister’s Department should –

(a) forward a copy of this decision to the States Greffe and request that notice of the Order is published; and

(b) take other steps as appropriate to bring notice of the direction and licences to the attention of relevant persons.

Signature:

Position:

Chief Minister

Date Signed:

Date of Decision (If different from Date Signed):

Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013

IRAN FINANCIAL RESTRICTIONS

GENERAL LICENCES

Granted in pursuance of Article 9 of the Money Laundering and Weapons Development (Directions) (Jersey) Law 2012

1) The following general licences are granted by the Chief Minister.

2) The licences exempt the acts specified below from the requirements contained in the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013.

3) The licences:

a) are of indefinite duration;

b) may be varied or revoked at any time.

Definitions and interpretation

4) In these licences:

a) “EU Regulation” means Council Regulation (EU) No.267/2012 on restrictive measures against Iran;

b) “relevant person” has the same meaning as in the Money Laundering and Weapons Development (Directions) (Jersey) Law 2012;

c) “designated person” has the same meaning as in the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2012;

d) “transfer of funds” includes a transfer, whether made electronically or not, executed in several operations which appear to be linked, as well as a transfer executed in a single operation;

e) a reference to an amount in euro (€) includes a reference to the equivalent amount in another currency;

f) “permitted transaction” means a transfer of funds from one individual to another, each person acting in their private capacity, where the payment is not made in the course of any business relationship or transaction; and

g) “frozen account” means an account of a designated person who is also listed in Annex VIII or Annex IX of the EU Regulation.

GENERAL LICENCE 1:

HUMANITARIAN BUSINESS RELATIONSHIPS AND TRANSACTIONS

A relevant person may make a transfer of funds to, or receive a transfer of funds from, a designated person, where:

a) the sum transferred or received is under €40,000; and

b) the funds are for foodstuffs, healthcare, medical equipment or for humanitarian purposes.

For the avoidance of doubt, this licence does not displace the requirements under the EU Regulation and the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended, in relation to prior notification of transfers of funds of over €10,000.

Any such transactions involving transfers of € 40,000 or more may be authorised by individual licence for which application must be made to the Chief Minister.

The general licence does not permit any payment of funds to a person or entity subject to an asset freeze under the EU Regulation or the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended. An individual licence must be requested in advance for such a payment.

GENERAL LICENCE 2:

PERSONAL REMITTANCES

A relevant person may make a transfer of funds to, or receive a transfer of funds from, a designated person, where:

a) the sum transferred or received is under €40,000; and

b) the transfer is for the purposes of a permitted transaction.

Any such transactions involving transfers of € 40,000 or more may be authorised by individual licence for which application must be made to the Chief Minister.

GENERAL LICENCE 3:

INSURANCE/REINSURANCE

Provision of insurance or reinsurance

A relevant person may provide insurance or reinsurance to a designated person where such provision is permitted under the EU Regulation and the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended.

Transfers in relation to insurance or reinsurance

A relevant person may make a transfer of funds to, or receive a transfer of funds from, a designated person in connection with insurance or reinsurance which is permitted under the EU Regulation and the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended.

For the avoidance of doubt, this licence does not displace the requirements of Article 21 of the EU Regulation and the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended.

GENERAL LICENCE 4:

ASSET FREEZING EXEMPTIONS AND LICENSED ACTIVITIES

Maintaining a frozen account

A relevant person may continue to hold a frozen account.

Crediting a frozen account

A relevant person may credit funds to a frozen account, in accordance with Article 29 of the EU Regulation and the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended.

Licensed activities under the EU Regulation and Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended.

A relevant person who has, before the date of this licence, been granted an authorisation by the Chief Minister under the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2010 or the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2012, as amended, may continue to engage in the authorised activities without breaching the requirements contained in the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013.

GENERAL LICENCE 5:

HOLDING ACCOUNTS IN THE NAME OF DESIGNATED PERSONS

Maintaining an account

A relevant person who holds an account of a designated person (other than a frozen account) immediately before the coming into force of the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013 may continue their business relationship with that designated person only to the extent necessary to hold that account.

Reporting requirement

A relevant person who holds an account as described above must report that fact to the Chief Minister as soon as reasonably practicable and, in any event, within 14 days of the coming into force of the Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2013.