Jersey’s Proceeds of Crime law is to be updated to bring the terminology inline with that of FATF (the Financial Action Task Force).
The change relates to Proceeds of Crime (Amendment No. 6) (Jersey) Law 2022 (Amendment No. 6) and the implementation of the changes as they apply to Private Trust Companies (PTCs) and some potential lack of consistency that has arisen through interpretation of the statutory and regulatory requirements.
Following consultations with the JFSC, and to provide clarification, Jersey’s Assistant Chief Minister with responsibility for Financial Services, Deputy Elaine Millar, has decided to amend Article 2 of the Proceeds of Crime (Duties of Non-Professional Trustees) (Jersey) Order 2016 (NPTO).
- The first amendment will align the terminology of the NPTO closer with FATF terminology, replacing the existing term ‘by way of business’ with the FATF term ‘as a business’. Amendment No. 6 already made a similar alignment to the Proceeds of Crime (Jersey) Law 1999 (the ‘1999 Law’) when it came into force on 30th January 2023.
- The second amendment to Article 2 will clarify that the NPTO only applies to natural persons.
This change reflects the original intention behind the NPTO, i.e., that legal persons should not be considered non-professional trustees under the NPTO. This also reflects the findings in the recently published Legal Persons/Legal Arrangements National Risk Assessment (the ‘LPA NRA’) and underlines the importance of proactively managing the AML/CFT risks inherent in legal persons and legal arrangements.
Having considered the results of the LPA NRA and the amendments to the NPTO, the JFSC intends to amend its Guidelines on interpretation, issued under Article 36 of the 1999 Law, which will impact legal persons and legal arrangements, including PTCs. The JFSC will clarify that legal persons, such as PTCs and other corporate bodies, will be considered to be ‘acting as a business’ where they act as trustees of an express trust. This clarification removes any remaining uncertainty regarding the ‘as a business’ test and brings these corporate bodies into full scope for Amendment No. 6, where they may have previously not been considered to be in scope already. However, these corporate bodies are able to appoint an anti-money laundering service provider, as defined in Article 9A of the Money Laundering (Jersey) Order 2008, thereby mitigating the operational impact of these changes.
These changes are intended to achieve effective implementation of Amendment No. 6 and the policy intentions behind it, reflecting Jersey’s continued and proactive management of national AML/CFT risks as they evolve (as identified in its suite of National Risk Assessments) whilst ensuring compliance with the FATF Standards.
Deputy Elaine Millar, made the Order on 22nd August 2023 and it will come into force seven days afterwards.
