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

Summary

This is a JFSC public statement setting out findings of an investigation into Lutea Holdings Limited and Lutea Trustees Limited, a Jersey trust company business, covering conduct between 1 January 2018 and 2 September 2021. The JFSC concluded that Lutea failed to organise and control its affairs effectively, lacked adequate risk management systems, and breached requirements of the Money Laundering (Jersey) Order, the AML/CFT Code, and the Code of Practice for Trust Company Business (TCB Code). The statement is issued under Article 25(b) of the Financial Services (Jersey) Law 1998 and Article 26(b) of the Supervisory Bodies Law to protect Jersey's reputation and counter financial crime; the matters were found ineligible for a civil financial penalty.

• Corporate governance: Inadequate, outdated business risk assessments; no formal ML/TF strategy; ineffective, under-resourced compliance monitoring and reporting to the board; weak handling of conflicts of interest.
• Customer due diligence: Failure across all nine reviewed customer files to adequately identify and verify parties, document ownership and control structures, or apply enhanced due diligence for higher-risk customers, including PEPs.
• Ongoing monitoring and record-keeping: Significant periodic review backlogs, incomplete transaction monitoring, poor and disorganised customer record-keeping, and customer risk assessments that were incomplete or not kept current.
• Conduct of business: Missing or inadequate letters of engagement, facilitation of unauthorised financial service business by group companies, a failure to comply fully with prior JFSC directions, and a case where Lutea supported a trust resettlement that breached the trust deed.
• Root cause: The JFSC attributes the failings to ineffective board oversight, a board lacking governance/risk/compliance expertise, and an organisational culture that did not prioritise compliance.

The statement is a retrospective enforcement finding rather than a rule change; it does not itself impose new ongoing obligations on other regulated firms, though it illustrates the JFSC's expectations under the existing MLO, AML/CFT Code and TCB Code regarding governance, risk assessment, CDD/EDD, ongoing monitoring and compliance reporting.

Applies to

trust company business (registered persons under the Financial Services (Jersey) Law 1998), Lutea Holdings Limited and Lutea Trustees Limited