Foundations (Amendment of Law) (Jersey) Regulations 201-

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.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

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

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 23 February 2015:

MINISTERIAL DECISION REFERENCE: MD-C-2015-0023
DECISION SUMMARY TITLE: Draft Foundations (Amendment of Law) (Jersey) Regulations 201-
DECISION SUMMARY AUTHOR:	Legislative and Policy Development, Financial Services	IS THE DECISION SUMMARY PUBLIC OR EXEMPT?		Public
REPORT TITLE: Written Report - Draft Foundations (Amendment of Law) (Jersey) Regulations 201-
REPORT AUTHOR OR NAME OF PERSON GIVING REPORT: (if different from Decision Summary Author)	Legislative and Policy Development, Financial Services	IS THE REPORT PUBLIC OR EXEMPT		Public
DECISION AND REASON FOR THE DECISION: The Deputy Chief Minister approved the draft Foundations (Amendment of Law) (Jersey) Regulations 201- (the “Draft Regulations”) for lodging and directed that the documents should be lodged au Greffe for debate by the States at the earliest opportunity. The draft Regulations amend the Foundations (Jersey) Law (the “Foundations Law”) for two primary purposes: i) To introduce obligations in respect of record keeping requirements by the foundation which relate to the evolving Recommendations of the Financial Action Task Force (“FATF”) on Anti-Money Laundering and Countering the Financing of Terrorism. This relates to the recent onsite assessment of Jersey by MONEYVAL. ii) Make a number of miscellaneous amendments to the Foundations Law in relation to its operation for industry practitioners.
RESOURCE IMPLICATIONS: There are no resource implications as a result of this decision.
ACTION REQUIRED: That the Greffier of the States be requested to arrange for the draft Foundations (Amendment of Law) (Jersey) Regulations 201- -be lodged au Greffe for debate by the States at the earliest opportunity.
SIGNATURE:			POSITION: SENATOR ANDREW GREEN MBE DEPUTY CHIEF MINISTER OF JERSEY

DATE SIGNED			EFFECTIVE DATE OF THE DECISION

Foundations (Amendment of Law) (Jersey) Regulations 201-

Draft Foundations (Amendment of Law) (Jersey) Regulations 201-

Written Report

Overview

The draft Foundations (Amendment of Law) (Jersey) Regulations 201- (the “draft Regulations”) Regulations amend the Foundations (Jersey) Law (the “Foundations Law”) for two primary purposes:

i) To introduce obligations in respect of record keeping requirements for the council members of the foundation which relate to the evolving Recommendations of the Financial Action Task Force (“FATF”) on Anti-Money Laundering and Countering the Financing of Terrorism.

ii) Make a number of miscellaneous amendments to the Foundations Law in relation to its operation for industry practitioners.

i) Record Keeping Amendment

Draft Regulation 3 introduces a new Article 24A into the Foundations Law being an obligation on each member of the council of a foundation to ensure that the foundation is keeping proper accounting records. It also specifies what those records should contain and the notice that should be provided to the qualified member if a council member wishes to inspect the records. It states that accounting records should be kept by the foundation for a period of 10 years.

Draft Regulation 4 introduces a new Article 24B into the Foundations Law making it a criminal offence for a member of the council of a foundation, officers of other bodies having separate legal personality or any other person purporting to act in such capacity, if the offence is proven to have been committed with the consent or connivance of that person or attributable to any neglect on behalf of that person. If the offence is proven, the person will be liable to the same penalty as the foundation.

ii) Miscellaneous amendments

Definition of Qualified Person

“Qualified person” means a person registered under the Financial Services (Jersey) Law 1998 (the “Financial Services Law”) to carry on trust company business that permits the provision by the person of the services mentioned in Articles 2(4)(a) and (d) of that Law;

In addition, the Foundations Law states that the business address of a foundation is the business address of the qualified member of its council or, if there is no such qualified member, its last qualified member.

On a strict interpretation of the Foundations Law as it currently stand, this results in a requirement for the qualified member (and therefore the qualified person) to also be registered under Article 2(4)(f) of the Financial Services Law.

The Jersey Financial Services Commission recognises that the manner in which the Foundations Law is currently drafted does not reflect the position that was agreed during consultation and creates an additional cost burden for the trust company business industry. In practice, many registered persons will, and have, sought to register a separate entity to fulfil the function of a member of the council of a foundation, most already having a separate entity within the affiliation registered under Article 2(4)(a) of the Law to act as a company formation agent, a partnership formation agent or a foundation formation agent.

Draft Regulation 2 remedies this issue by setting out in the Foundations Law the required categories of license necessary for the qualified person under the Foundations Law depending on the role carried out.

Objects Clause

Draft Regulation 2 introduces a new Article 5 (4A) which provides that, in terms of specifying the objects of a foundation, it is sufficient for the charter to provide that the specified purpose may be determined in accordance with the charter or regulations of the foundation.

This allows greater flexibility for the industry to change the objects clause of the foundation without need to amend the charter that will be of particular benefit for long running foundations. The necessity for transparency as to objects is maintained as the objects are still stated in the regulations of the foundation.

Amendment of the Regulations of a Foundation

Finally, there was some concern in industry as to the interplay between Article 5 and Article 10 of the Foundations Law relating to how the regulations of a foundation can be amended. It may appear that the two articles provide alternatives for amendment, which could be considered confusing.

Draft Regulation 3 (b) (ii) and (iii) clarifies the position by making it clear that either article does not prejudice the operation of the other.

Financial and Manpower Considerations

There are no financial or manpower implications for the States of Jersey as a result of adopting the Proposition.

Recommendation

It is recommended that the Deputy Chief Minister approve the draft Regulations for lodging and request that the Greffier of the States arrange for the draft Regulations to be lodged au Greffe for debate by the States at the earliest opportunity.

END