Feedback on Consultation Paper No. 7 2022 - Handbook Requirements for Prescribed Non-profit Organisations

Summary

This is the JFSC's feedback paper summarising responses to Consultation Paper No. 7 2022 and the Government of Jersey's follow-up consultation, both concerning new AML/CFT Handbook requirements for Prescribed Non-Profit Organisations (Prescribed NPOs). It explains how the JFSC and Government have amended the draft Section 17 (NPO Section) of the AML/CFT Handbook and the Non-Profit Organisations (Prescribed NPOs - Additional Obligations) (Jersey) Order 2022 in response to comments from 28 (CP) and 10 (Government CP) respondents, and confirms the finalised framework and its effective date.

• Scope of Prescribed NPO: An NPO is a Prescribed NPO if, in the preceding 12 months, it has raised funds exceeding £1,000 from outside Jersey, Guernsey, Isle of Man, England and Wales and Scotland, or disbursed funds exceeding £1,000 outside those jurisdictions; this must be assessed on a rolling basis.
• Codes of Practice: Section 17 of the Handbook sets mandatory Code of Practice requirements covering risk-based approach (NPO PRA and risk register), NPO beneficiaries/partners/donors, screening and training of volunteers, employees, owners and controllers, accounting for funds, and record-keeping.
• Financial statements: Automatic submission of financial statements to the JFSC was dropped; Prescribed NPOs must now provide these only on request.
• Significant donor: Clarified to mean a single person.
• TF/TFS-TF reporting shelved: Proposals for a Nominated Reporting Person and mandatory TF/TFS-TF reporting obligations (Questions 18-20 of the CP) will not form part of the framework from the effective date.
• Supervisory status: Prescribed NPOs will be classed as supervised persons and, from the effective date, subject to civil financial penalty provisions under Article 21A of the Financial Services Commission (Jersey) Law 1998.
• NPO Law exemptions removed: The Article 2(2) and Article 2(1) exemptions in the Non-Profit Organizations (Jersey) Law 2008 are removed via the Non-Profit Organisations (Miscellaneous Amendments) (Jersey) Law 2022.

The revised NPO Section and the Prescribed NPO Order both became effective on 1 January 2023. The JFSC indicated it will continue to engage with the NPO sector during the transition and review the NPO Section throughout 2023 for further enhancements.

Key obligations

• Prescribed NPOs must apply the requirements of the Prescribed NPO Order and Section 17 (Codes of Practice) of the AML/CFT Handbook to all relationships with NPO beneficiaries and associate NPOs, not only those connected to higher-risk jurisdictions.
• Prescribed NPOs must assess on a rolling basis whether they meet the conditions to be classed as a Prescribed NPO (raising or disbursing funds exceeding £1,000 outside Jersey, Guernsey, Isle of Man, England and Wales and Scotland in the preceding 12 months).
• Prescribed NPOs must conduct a Programme Risk Assessment (NPO PRA) and maintain a risk register to assess and monitor terrorist financing risk exposure.
• Prescribed NPOs must identify, screen and train volunteers, employees, owners and controllers in line with Section 17.5 of the Handbook.
• Prescribed NPOs must maintain accounting for funds and record-keeping in accordance with Sections 17.6 and 17.7 of the Handbook.
• Prescribed NPOs must provide financial statements to the JFSC on request.
• Prescribed NPOs, as supervised persons, are subject to civil financial penalty provisions under Article 21A of the Financial Services Commission (Jersey) Law 1998 from the effective date.

Applies to

Non-profit organisations (NPOs), Prescribed Non-profit Organisations (Prescribed NPOs), Trust and Company Service Providers (TCSPs)

Deadlines

• 1 January 2023: Effective date of the revised NPO Section (Section 17 of the AML/CFT Handbook) and the Prescribed NPOs - Additional Obligations Order 2022; Prescribed NPOs become subject to the new Codes of Practice and, as supervised persons, to civil financial penalty provisions.
• December 2022: The Non-Profit Organisations (Miscellaneous Amendments) (Jersey) Law 2022, removing the Article 2(1) and 2(2) exemptions from the NPO Law, was to be debated.