Proceeds of Crime (Supervisory Bodies) (Designation of Supervisory Bodies) (Jersey) Order 2008: Amendment: Law Drafting

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A decision made 10 January 2013:

Decision Reference: MD-E-2013-0004

Decision Summary Title :

Regulation of Lawyers and Accountants for Anti Money Laundering and Countering the Financing of Terrorism

Date of Decision Summary:

09 January 2013

Decision Summary Author:

Director,

Finance Industry Development

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title :

Regulation of Lawyers and Accountants for Anti Money Laundering and Countering the Financing of Terrorism

Date of Written Report:

09 January 2013

Written Report Author:

Director,

Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Regulation of Lawyers and Accountants for Anti Money Laundering and Countering the Financing of Terrorism.

Decision(s):

The Minister authorised the drafting of an amendment to the Proceeds of Crime (Supervisory Bodies) (Designation of Supervisory Bodies) (Jersey) Order 2008 (the “Designation Order”) in relation to the regulation of lawyers and accountants for Anti Money Laundering and Countering the Financing of Terrorism (“AML/CFT”).

The Law Draftsman’s office is to be instructed by the Jersey Financial Services Commission (“JFSC”) to draft an amendment to Article 3 of the Designation Order so that:

the sunset provision relating to the designation of the JFSC as the AML/CFT supervisory body for lawyers is extended to 19 March 2016; and
the sunset provision relating to the designation of the JFSC as the AML/CFT supervisory body for accountants is removed (i.e. so that the designation of the JFSC no longer has an end-date).

Reason(s) for Decision:

The designation of the JFSC as the body responsible for supervising the compliance of lawyers and accountants with Jersey’s AML/CFT provisions has, to date, always been subject to a statutory sunset provision. That sunset provision is due to expire in March 2013.

The Law Society has requested that the designation of the JFSC be extended for a further 3 years to 19 March 2016.

The Jersey Society of Chartered and Certified Accountants (“JSCCA”) which represents the accountancy profession in Jersey, has stated that it is content for the designation of the JFSC as the AML/CFT supervisory body for accountants to be extended beyond 19 March 2013 without a further sunset provision (i.e. so that the designation of the JFSC would be for the foreseeable future).

Resource Implications:

This decision has no financial or manpower implications for the States of Jersey.

Action required:

Instructions are to be produced by the JFSC to go to the Law Draftsman to draft an amendment to the Proceeds of Crime (Supervisory Bodies) (Designation of Supervisory Bodies) (Jersey) Order 2008.

Signature: Senator A.J.H.Maclean

Position: Minister for Economic Development

Date Signed:

Date of Decision (If different from Date Signed):

Proceeds of Crime (Supervisory Bodies) (Designation of Supervisory Bodies) (Jersey) Order 2008: Amendment: Law Drafting

MINSITER FOR ECONOMIC DEVELOPMENT

REPORT IN RELATION TO:

Regulation of Lawyers and Accountants for Anti Money Laundering and Countering the Financing of Terrorism

Introduction

This Ministerial Decision deals with the drafting of an amendment to the Proceeds of Crime (Supervisory Bodies) (Designation of Supervisory Bodies) (Jersey) Order 2008 (the “Designation Order”) in relation to the regulation of lawyers and accountants for Anti Money Laundering and Countering the Financing of Terrorism (“AML/CFT”)

Decision

The Ministerial Decision provides that the Law Draftsman’s office is to be instructed by the Jersey Financial Services Commission (“JFSC”) to draft an amendment to Article 3 of the Designation Order so that:

the sunset provision relating to the designation of the JFSC as the AML/CFT supervisory body for lawyers is extended to 19 March 2016; and

the sunset provision relating to the designation of the JFSC as the AML/CFT supervisory body for accountants is removed (i.e. so that the designation of the JFSC no longer has an end-date).

Background

The designation of the JFSC as the body responsible for supervising the compliance of lawyers and accountants with Jersey’s AML/CFT provisions has, to date, always been subject to a statutory sunset provision. The initial sunset provision was to 19 March 2010. This was subsequently extended, by Order, on two occasions – to 19 September 2011 and then to 19 March 2013.

The sunset provisions were provided to give the legal and accountancy professions the opportunity to consider whether they wished to propose alternative supervisory arrangements.

The Law Society of Jersey is in the early stages of formulating a proposal for an alternative AML/CFT supervisory body for the legal profession. In due course, it is expected that the Law Society will formally approach the Minister with its proposal. However, this is not due to occur before the expiry of the existing sunset provision (19 March 2013) and even if the Minister were to be content with the proposal, it is likely to take the Law Society some considerable time to put in place the necessary framework and resources etc to implement the proposal.

In light of this, the Law Society has approached the JFSC and requested that the designation of the JFSC be extended for a further 3 years to 19 March 2016. This will ensure that there is no hiatus in the supervision of lawyers for compliance with Jersey’s AML/CFT provisions. Such supervision is required to meet international standards set by the Financial Action Task Force (FATF).

The JFSC has also been in contact with the Jersey Society of Chartered and Certified Accountants (“JSCCA”) concerning the impending expiry of the existing sunset provision in relation to the JFSC’s supervision of accountants. The JSCCA, which represents the accountancy profession in Jersey, has no plans to propose any alternative AML/CFT supervisory body. It has confirmed to the JFSC that it is content for the designation of the JFSC as the AML/CFT supervisory body for accountants to be extended beyond 19 March 2013 without a further sunset provision (i.e. so that the designation of the JFSC would be for the foreseeable future).

Financial and Manpower Implications

This decision has no financial or manpower implications for the States of Jersey.

Recommendation

It is recommended for the reasons outlined in this report that the Minister makes the decision outlined.

Finance Industry Development

7 January 2013