Lutea Holdings Limited and Lutea Trustees Limited (2022-12-21)

Summary

This is a public statement issued by the Jersey Financial Services Commission (JFSC) setting out enforcement findings against Lutea Holdings Limited and Lutea Trustees Limited (together, Lutea), a Jersey trust company business. It details serious and repeated failings in corporate governance, risk management and AML/CFT compliance identified during a 2019 on-site examination and a subsequent investigation covering the period 1 January 2018 to 2 September 2021. The JFSC concluded the matters were ineligible for a civil financial penalty and instead issued this public statement to protect Jersey's reputation and counter financial crime.

• Corporate governance: Inadequate, outdated business risk assessments that failed to address ML/TF risks specific to Lutea's structure and customer base, and no formal counter-ML/TF strategy.
• Compliance monitoring and reporting: No board-approved compliance monitoring plan for 2018-2019, weak testing and follow-up, and compliance/MLRO/MLCO reports to the board that lacked detail and were not meaningfully discussed or acted upon.
• Conflicts of interest: No board-approved conflicts of interest policy until April 2019, and failure to assess whether the policy was adequately applied.
• Customer due diligence and monitoring: Across nine reviewed customer files: inadequate understanding of ownership and control, deficient CDD/EDD (including PEP identification), incomplete risk assessments, absent or poor customer profiles, missing letters of engagement, and weak transaction monitoring and periodic reviews.
• Record-keeping: Poor, disorganised customer record-keeping with no central storage system, including records kept in directors' personal folders.
• Other findings: Facilitation of unauthorised financial service business by group companies and failure to fully comply with directions issued by the JFSC.
• Root cause: JFSC attributed the failings to an ineffective Lutea Board lacking regulatory awareness and a compliance-averse culture, evidenced by repeat findings from prior examinations that were not remediated.

The statement is retrospective and enforcement-focused: it does not itself impose new ongoing obligations on Lutea or other firms, but serves as a public record of the failings identified and the JFSC's expectations for effective governance, risk management and CDD/EDD practices under the regulatory framework (FS(J)L, MLO, AML/CFT Code and TCB Code).

Applies to

trust company business, registered persons under the Financial Services (Jersey) Law 1998