Consultation No. 5 2023: Proposals regarding further enhancements to the AML/CFT Handbook

Summary

This is a JFSC consultation paper (Consultation No. 5 2023) seeking industry feedback on proposed amendments to the Handbook for the detection and prevention of money laundering, terrorist financing and proliferation financing (the AML/CFT/CPF Handbook). The changes are driven by recent Jersey legislative amendments, recommendations from an external AML/CFT review (FTA), and JFSC Supervision division recommendations on NPO suspicious activity reporting. Unless otherwise stated, the proposals affect all supervised persons.

• Money Laundering (Amendment No. 12) (Jersey) Order 2023: Handbook updates to glossary definitions (FATF Recommendations, prominent public function), digital identity guidance, one-off transaction terminology, inclusion of DNFBPs within 'financial groups' (Section 2.7), a new Code of Practice at Section 7.6 on declassifying PEPs/prominent persons after set time periods, and expanded guidance on correspondent banking relationships involving Jersey/foreign financial institutions and VASPs, including a prohibition on relationships with shell banks.
• Wire Transfer Regulations 2023: New Handbook definitions in Section 11 for money or value transfer service provider, payment service provider, virtual assets and VASPs, plus guidance on the limited exemption from EU wire transfer rules for virtual asset transfers under EUR 1,000 between VASPs (exemption does not apply if either party is not a VASP and risk is elevated).
• Proceeds of Crime (Financial Intelligence) (Amendment) (Jersey) Regulations 2022: Handbook-wide replacement of references to the JFCU, police officers, and customs officers with the newly established Financial Intelligence Unit (FIU).
• FTA recommendations: Expanded guidance at Sections 3.3.2, 3.3.3, 3.3.6 and 7.3 emphasising that supervised persons should not accept identification information or documentation at face value, and on risk factors to consider.
• NPOs and terrorism financing SARs: New guidance at Section 17.8 clarifying that all NPOs (including unpaid/voluntary workers) must comply with suspicious activity reporting duties under Articles 19 to 22 of the Terrorism (Jersey) Law 2002, separate from money laundering SAR duties owed via trust company service providers under the Proceeds of Crime Law.

The consultation poses six specific questions on the adequacy of the proposed guidance and Code changes. Comments can be sent directly to the JFSC or coordinated through Jersey Finance Limited, with two optional drop-in sessions offered during the consultation window. The JFSC expects to publish feedback and an amended Handbook by 31 August 2023, taking effect 1 September 2023, alongside the underlying legislative changes.

Key obligations

• Interested parties wishing to respond must submit written comments to the JFSC or, via industry coordination, to Jersey Finance Limited by 29 August 2023
• Industry bodies or associations responding must provide a summary of the individuals/institutions they represent
• All NPOs must comply with suspicious activity reporting requirements under Articles 19 to 22 of the Terrorism (Jersey) Law 2002, including work performed on a voluntary or unpaid basis
• A Jersey financial institution or Jersey VASP must not enter into or continue a correspondent banking relationship with a shell bank, and must take appropriate measures to prevent or discontinue relationships with institutions that permit shell banks to use their accounts
• NPOs receiving services from a regulated trust company service business remain subject to money laundering SAR obligations under Article 34D(4) of the Proceeds of Crime Law via that TCSP

Applies to

supervised persons, DNFBPs (Designated Non-Financial Businesses and Professions), VASPs (Virtual Asset Service Providers), payment service providers, money or value transfer service providers, trust company service providers, non-profit organisations (NPOs)

Deadlines

• 29 August 2023: Deadline for submitting written comments on the consultation to the JFSC or, via industry coordination, to Jersey Finance Limited
• 24 August 2023, 13:00-16:00: Optional drop-in session at Digital Jersey (Hamilton room) for industry to seek clarity on proposed changes
• 25 August 2023, 10:00-12:00: Optional drop-in session at Santander Work Café (Buenos Aires room) for industry to seek clarity on proposed changes
• 31 August 2023: Anticipated publication date of consultation feedback and the amended Handbook
• 1 September 2023: Effective date of the Money Laundering (Amendment No. 12) (Jersey) Order 2023, the Wire Transfer Regulations, and the amended Handbook
• July 2023: Effective date of the Proceeds of Crime (Financial Intelligence) (Amendment) (Jersey) Regulations 2022 establishing the FIU