Guidelines on interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999

Summary

This JFSC guidance interprets Article 36 and Schedule 2 of the Proceeds of Crime (Jersey) Law 1999, explaining how to determine whether an activity is 'conducted as a business' and therefore constitutes financial services business requiring registration. It covers Financial Institutions (FIs), Designated Non-Financial Businesses or Professions (DNFBPs), Virtual Asset Service Providers (VASPs), and trustees of express trusts, including Non-Professional Trustees.

• Conducted as a business test: Sets out non-exhaustive indicators (holding out to the public, profit motive, level of compensation, multiple activities/customers) for deciding whether an activity is carried on as a business, which triggers registration obligations.
• Financial Institutions: Clarifies that FI activities must be conducted for or on behalf of a customer to be in scope; intra-group, employee, and sole-owner arrangements are generally excluded unless third parties or other activities bring them into scope.
• DNFBPs: Guidance on interpreting DNFBP-related expressions in Schedule 2 Part 3 (detail largely in the elided middle sections).
• VASPs: Confirms that providing a platform for virtual asset dealing, or services over instruments enabling control of virtual assets (e.g. custody of cryptographic keys), brings a person within the VASP definition even if they do not deal on their own account.
• Express trusts and Non-Professional Trustees: Acting as trustee of an express trust is in scope; Non-Professional Trustees are deemed financial services business without needing to meet the 'as a business' test, are not required to register with the JFSC, but remain subject to AML/CFT/CPF obligations as modified by the Non-Professional Trustees Order 2016.

The guidance does not itself create new statutory duties but determines who falls within scope of Schedule 2 and therefore must register with the JFSC as a Schedule 2 business (or, for Non-Professional Trustees, comply with modified AML/CFT/CPF duties without registering). Persons in doubt about their status are encouraged to contact the JFSC, and unauthorised conduct of Schedule 2 business is an offence under the Supervisory Bodies Law.

Key obligations

• Persons who conduct Schedule 2 activities or operations as a business, for or on behalf of a customer/other person/third party, must register with the JFSC as a Schedule 2 business under the Supervisory Bodies Law.
• Once registered, a Schedule 2 business must specify all activities and operations it conducts as a business to the JFSC, both at registration and on an ongoing basis.
• Persons conducting more than one Schedule 2 activity must consider whether different regulatory requirements apply to each activity.
• Non-Professional Trustees of express trusts, although not required to register with the JFSC, must comply with AML/CFT/CPF obligations as modified by the Proceeds of Crime (Duties of Non-Professional Trustees) (Jersey) Order 2016.
• Persons providing a platform for virtual asset dealing or services over instruments enabling control of virtual assets must treat themselves as VASPs and comply with associated registration/AML obligations.
• Persons uncertain whether their activities fall within scope should contact the JFSC to discuss their circumstances; failure to register where required and conducting unauthorised Schedule 2 business is an offence carrying up to 7 years' imprisonment and a fine.

Applies to

Financial Institutions, Designated Non-Financial Businesses or Professions (DNFBPs), Virtual Asset Service Providers (VASPs), trust companies, Non-Professional Trustees, Private Trust Companies, persons conducting Schedule 2 (financial services) business