Money Laundering (Amendment No. 7) (Jersey) Order 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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 20 October 2014:

Decision Reference: MD-C-2014-0173
Decision Summary Title :	DS – Money Laundering (Amendment No.7) (Jersey) Order 201-		Date of Decision Summary:	17 October 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 :	DS – Money Laundering (Amendment No.7) (Jersey) Order 201-		Date of Written Report:	17 October 2014
Written Report Author:	Officer, Financial Services		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Making of the draft Money Laundering (Amendment No.7) (Jersey) Order 201-
Decision(s): The Chief Minister made the Draft Money Laundering (Amendment No.7) (Jersey) Order 201- (the “draft 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 Anti-money laundering and countering the financing of terrorism obligations. 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 “MLO”). 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 are be made. The draft Order therefore makes amendments to the Money Laundering Order in the following areas:  Simplified CDD – residence of customer. The MLO is amended 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.  Higher Risk Business. The MLO is amended so that non-resident customers, customers benefitting from private banking, 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.  Simplified CDD - intermediaries. Article 17 of the MLO is amended 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. The draft Order has been subject to consultation with the industry and the Jersey Financial Services Commission and it is therefore recommended that the Minister make the draft Order
Resource Implications: There are no resource implications for the States of Jersey as a result of this decision.
Action required: That the Minister sign and seal the Order and it be returned to the States Greffe for immediate publication.
Signature: Senator I. J. Gorst		Position: Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Money Laundering (Amendment No. 7) (Jersey) Order 201-

CHIEF MINISTER

WRITTEN REPORT

Draft Money Laundering (Amendment No.7) (Jersey) Order 201- (the “draft Order”)

Introduction

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. 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 “MLO”).

December 2013 Moneyval Progress Report

Following consideration of the insular authorities’ Progress Report, Moneyval raised several issues in relation to former Recommendation 5 of the Financial Action Task Force (“FATF”) Recommendations:

 Simplified CDD – residence of customer.
Moneyval considers that the application of simplified CDD should be limited to customers resident in countries that are compliant with FATF recommendations, regardless of the risk of the product or service provided.

 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.

 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.

Financial Crime Strategy Group Recommendations

3. 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 be made.

The draft Order therefore makes amendments to the Money Laundering Order in the following areas:

 Simplified CDD – residence of customer.
The MLO is amended 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.

 Higher Risk Business.
The MLO is amended so that non-resident customers, customers benefitting from private banking, 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.

 Simplified CDD - intermediaries.
Article 17 of the MLO is amended 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.

Financial and Manpower Considerations

There are no financial or manpower implications for the States of Jersey arising from the making of the draft Order.

Recommendation

It is recommended that the Chief Minister make the draft Order so that the recommendations of the IMF may be addressed in advance of the Moneyval plenary hearing.

Officer, Financial Services

17 October 2014

Money Laundering (Amendment No. 7) (Jersey) Order 201-

Information about the publication of Ministerial Decisions

A decision made 20 October 2014:

 Higher Risk Business.The MLO is amended so that non-resident customers, customers benefitting from private banking, 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.

 Simplified CDD – residence of customer.Moneyval considers that the application of simplified CDD should be limited to customers resident in countries that are compliant with FATF recommendations, regardless of the risk of the product or service provided.

Financial Crime Strategy Group Recommendations

 Higher Risk Business.The MLO is amended so that non-resident customers, customers benefitting from private banking, 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.

 Higher Risk Business.
The MLO is amended so that non-resident customers, customers benefitting from private banking, 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.

 Simplified CDD – residence of customer.
Moneyval considers that the application of simplified CDD should be limited to customers resident in countries that are compliant with FATF recommendations, regardless of the risk of the product or service provided.

 Higher Risk Business.
The MLO is amended so that non-resident customers, customers benefitting from private banking, 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.