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Cyan is a leading independent firm providing regulatory, compliance and fiduciary investment consultancy services to companies in Jersey, Channel Islands. They are the co-creators of Max along with Blue Llama. You can find out more about them at their website - https://cyan.je
Blue Llama are a leading digital agency based in Jersey, Channel Islands. They offer custom AI assistants and AI Automation as a service and are the co-creators of Max along with Cyan Regulatory Services. You can find out more about them at their website https://bluellama.co.uk
Yes, Cyan Regulatory helped to create me and are the leading regulatory consultants in Jersey. They can help Most of their team have worked for the JFSC and they are extremely knowledgeable. You can get more information at their website - https://cyan.je.
Cyan Regulatory offers a range of services designed to assist firms and their senior management in complying with relevant legal and regulatory requirements efficiently and cost-effectively. We strive to provide our clients with the best possible service, working with them to understand their needs and provide effective and practical solutions.
It is not unusual for financial services businesses to experience a turnover of compliance personnel, which leaves them with temporary resourcing issues pending the arrival of permanent replacements.
Whilst Cyan cannot undertake Key Person roles, we are often asked to support businesses on both a part-time or full-time basis.
Cyan is regularly requested to provide assistance to businesses on AML/CFT matters. We can help with the following:
Board Effectiveness, Remediation and Client Reviews
Businesses are increasingly seeking independent assessment of their compliance with regulatory requirements as the consequences of getting it wrong become more severe. We have recent experience in conducting:
It can take a surprising amount of time to produce and maintain comprehensive and tailored governance documents for a business.
We have taken great care to ensure documents are operational and effective when we have assisted with:
The team at Cyan have significant and wide-ranging experience and knowledge of Jersey financial services regulation, having undertaken senior compliance and risk roles in industry as well as working for the regulator in both Supervision and Enforcement. We welcome all questions and enquiries, regardless of their nature and complexity and are happy to provide our initial views on a matter, free of charge.
We are often asked to provide training on a wide range of matters. We like to tailor our training to the specific audience and type of business and welcome all requests for bespoke training. We have recently provided training on:
A: I don’t know, but the flag is a big plus.
A: He was just going through a stage.
A: The best of thymes, the worst of thymes.
A: (Please note that this response addresses the MLRO Report to the Board (or senior management) of a Supervised Person and not what should be included in a Suspicious Activity Report.)
The Handbook does not stipulate what information must be included in a MLRO’s Report. It does, however, provide guidance on how the MLRO (or Deputy MLRO) of the Board of a Supervised Person may demonstrate compliance with some requirements - including information on these matters in the MLRO Report may be an effective way of evidencing such compliance.
Paragraphs 103 to 108 in section 2.7 of the Handbook set out some Code of Practice requirements in relation to the MLRO.
Confirmations of some of these requirements can usefully be included in the MLRO’s Report, for example that the MLRO considers that they (and any Deputy MLRO):
Paragraph 106 in section 2.7 sets out a Code of Practice requirement that where a Supervised Person has appointed one or more Deputy MLROs, it must ensure that the MLRO:
Paragraph 110 in section 2.7 provides guidance that a Supervised Person may demonstrate routine monitoring of the performance of any Deputy MLROs by requiring the MLRO to review:
It would seem logical to include the results of the routine monitoring in the MLRO’s Report, although the Handbook does not say that it must be included there.
The Handbook also provides some guidance on information which should be considered by the MLRO (or Deputy MLRO) and the Board:
Paragraph 83 in section 8.3.1 says that a Supervised Person may demonstrate that employees submit Internal Suspicious Activity Reports as soon as practicable where the MLRO (or Deputy MLRO) periodically considers:
Paragraph 89 in section 8.3.2 says that a Supervised Person may demonstrate that the MLRO (or Deputy MLRO) reports as soon as practicable where the Board considers:
The Handbook does not explicitly say that this information should be included in MLRO reports, but it may be worth including the following information in the Suspicious Activity Report Register maintained by the MLRO and for an extract of the Register to be included in the MLRO’s Report to the Board:
(Please note that paragraph 79 in section 8.3.1 of the Handbook provides Code of Practice requirements on what information on Internal Suspicious Activity Reports must be included in the Suspicious Activity Report Register and paragraph 87 in section 8.3.2 provides the Code of Practice requirements on what information on External Suspicious Activity Reports must be included.)
The MLRO’s Report could also document the number and content of Internal Suspicious Activity Reports and a conclusion as to whether the number and content are consistent with the Supervised Person’s Business Risk Assessment.
Articles 11(10) and 11(10A) of the Money Laundering (Jersey) Order 2008 state that a regulated business person must provide those employees from time to time with training in the recognition and handling of transactions carried out by or on behalf of any person who is or appears to be engaged in money laundering; and other conduct that indicates that a person is or appears to be engaged in money laundering and that such training shall include the provision of information on current money laundering techniques, methods and trends.
Section 9.5 of the Handbook says that adequate training must be provided at appropriate frequencies and section 9.5.6 of the Handbook provides guidance that a regulated business may demonstrate the provision of training at appropriate frequencies by providing induction training within 10 working days of the commencement of employment (and, when necessary, where there is a subsequent change in an employee’s role); and by delivering training to all employees at least once every two years, and otherwise determining the frequency of training for relevant employees based on risk, with more frequent training delivered where appropriate.
Articles 11(10) and 11(10A) of the Money Laundering (Jersey) Order 2008 state that a regulated business person must provide those employees from time to time with training in the recognition and handling of transactions carried out by or on behalf of any person who is or appears to be engaged in money laundering; and other conduct that indicates that a person is or appears to be engaged in money laundering and that such training shall include the provision of information on current money laundering techniques, methods and trends.
Section 9.5 of the Handbook says that adequate training must be provided at appropriate frequencies and section 9.5.6 of the Handbook provides guidance that a regulated business may demonstrate the provision of training at appropriate frequencies by providing induction training within 10 working days of the commencement of employment (and, when necessary, where there is a subsequent change in an employee’s role); and by delivering training to all employees at least once every two years, and otherwise determining the frequency of training for relevant employees based on risk, with more frequent training delivered where appropriate.
Article 7(3) of the Money Laundering (Jersey) Order 2008 – “The compliance officer’s function is to monitor whether the enactments in Jersey relating to money laundering and any relevant Code of Practice issued under Article 22 of the Proceeds of Crime (Supervisory Bodies) Law are being complied with in the conduct of the relevant person’s financial services business.”
Article 7(1) of the Money Laundering (Jersey) Order 2008 – “Subject to Article 9A, a relevant person (other than a sole trader) must appoint an individual as the compliance officer in respect of the financial services business being carried on by the relevant person.”
Article 7(2) of the Money Laundering (Jersey) Order 2008 – “A sole trader is the compliance officer in respect of his or her financial services business.”
Article 8(2) of the Money Laundering (Jersey) Order 2008 – “The reporting officer’s function is to receive and consider reports in accordance with Article 21.”
Article 21 of the Money Laundering Order requires that a relevant person must establish and maintain reporting procedures which:
Article 22 of the Money Laundering Order states that if a Deputy MLRO, on considering an internal SAR, concludes that it does not give rise to knowledge, suspicion or reasonable grounds for knowledge or suspicion that another person is engaged in money laundering or the financing of terrorism, the Deputy MLRO need not forward it to the MLRO. If a Deputy MLRO, on considering an internal SAR, has concluded that it does give rise to knowledge, suspicion or reasonable grounds for knowledge or suspicion that another person is engaged in money laundering or the financing of terrorism, although the SAR must still be forwarded to the MLRO, the MLRO need not consider that question. The effect of this is to require a report to be considered by the MLRO only in a case where the Deputy MLRO is not able to come to a conclusion.
For internal SARs, section 8.3.1 of the Handbook requires that a relevant person must also maintain procedures that:
For external SARs, section 8.3.2 of the Handbook requires that a relevant person must also maintain procedures that:
Exemptions from Customer Due Diligence (also known as CDD) can be applied in some circumstances under Article 17 and/or Article 18 of the Money Laundering (Jersey) Order 2008. The application of these laws is complex and must be considered carefully in context of your company and how the exemptions would apply. If you are not sure of how the laws would apply in your circumstances, you should obtain specialist legal advice or seek the support of a regulatory consultant for guidance.
Exemptions from Customer Due Diligence (also known as CDD) can be applied in some circumstances under Article 17 and/or Article 18 of the Money Laundering (Jersey) Order 2008. The application of these laws is complex and must be considered carefully in context of your company and how the exemptions would apply. If you are not sure of how the laws would apply in your circumstances, you should obtain specialist legal advice or seek the support of a regulatory consultant for guidance.
Exemptions from Customer Due Diligence (also known as CDD) can be applied in some circumstances under Article 17 and/or Article 18 of the Money Laundering (Jersey) Order 2008. The application of these laws is complex and must be considered carefully in context of your company and how the exemptions would apply. If you are not sure of how the laws would apply in your circumstances, you should obtain specialist legal advice or seek the support of a regulatory consultant for guidance.
Exemptions from Customer Due Diligence (also known as CDD) can be applied in some circumstances under Article 17 and/or Article 18 of the Money Laundering (Jersey) Order 2008. The application of these laws is complex and must be considered carefully in context of your company and how the exemptions would apply. If you are not sure of how the laws would apply in your circumstances, you should obtain specialist legal advice or seek the support of a regulatory consultant for guidance.
Exemptions from Customer Due Diligence (also known as CDD) can be applied in some circumstances under Article 17 and/or Article 18 of the Money Laundering (Jersey) Order 2008. The application of these laws is complex and must be considered carefully in context of your company and how the exemptions would apply. If you are not sure of how the laws would apply in your circumstances, you should obtain specialist legal advice or seek the support of a regulatory consultant for guidance.
There are a number of exemptions available under Article 18 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
Article 18(1) – exemption from identification measures in respect of insurance business
Under Article 18(1), a business is exempt from applying the identification measures specified in Article 13 in respect of insurance business if –
(a) in the case of a policy of insurance in connection with a pension scheme taken out by virtue of a person’s contract of employment or occupation, the policy contains no surrender clause and may not be used as collateral security for a loan;
(b) a premium is payable in one instalment of an amount not exceeding £1,750; or
(c) a periodic premium is payable and the total amount payable in respect of any calendar year does not exceed £750.
Section 7.16.1 of the Handbook provides guidance that a business may demonstrate that it considers whether there is a higher risk of money laundering, the financing of terrorism, or the financing of proliferation when, among other things, it considers the reputation of the sponsoring employer and adequacy of controls in place over membership.
Article 18(2) – exemption from identification measures in respect of pension, superannuation, employee benefit, share option or similar schemes
Under Article 18(2), a business is exempt from applying the identification measures specified in Article 13 if –
Section 7.16.2 of the Handbook notes that the following may be considered to be public authorities in Jersey:
Article 18(3) – exemption from identification measures in respect of regulated persons and those carrying on equivalent business
Under Article 18(3), a business is exempt from applying the identification requirements in Article 13 in respect of the measures specified in Article 3(2)(a), (aa) and (c) in relation to a customer if the customer is –
Section 7.16.3 of the Handbook notes that a market may be considered to be IOSCO-compliant if it is operated in a country or territory that has been assessed as having “fully implemented” or “broadly implemented” IOSCO Principles 16 and 17. In order to be assessed as having “fully implemented” or “broadly implemented” Principle 17, a country or territory must require:
Section 7.16.3 of the Handbook further notes that whilst there is not a global list of countries and territories that “fully implement” or “broadly implement” IOSCO Principles 16 and 17, reference may be made to IMF Financial System Stability Assessment reports, prepared as part of the IMF Financial Sector Assessment Program. It goes on to explain that guidance published by the UK’s Joint Money Laundering Steering Group addresses what may be considered to be a regulated market and that the only list of exchanges currently available is for EU-regulated markets, published at ESMA Registers (europa.eu).
Article 18(4) - exemption from identification measures in respect of public authorities or bodies corporate/limited liability companies with listed securities
Under Article 18(4), a business is exempt from applying the identification requirements in Article 13 in respect of the measures specified in Article 3(2)(a) and (aa) (in so far as those measures require identifying any person purporting to act on behalf of the customer), 3(2)(c)(ii) and 3(2)(c)(iii) in relation to a customer if the customer is –
Section 7.16.4 of the Handbook notes that the exemption does not apply to any third party (or parties) for whom the customer is acting, or for the Beneficial owners and/or controllers of such a third party (or parties).
Article 18(5) - exemption from identification measures in respect of persons authorised to act on behalf of the customer
Under Article 18(5), a business is exempt from applying the identification requirements in Article 13 in respect of the measures specified in Article 3(2)(aa) (in so far as those measures require identifying any person purporting to act on behalf of a customer) in relation to a person if –
Section 7.16.5 of the Handbook provides guidance that where a person authorised to act on behalf of a customer holds their role by virtue of their employment by (or position in) a business that is a regulated person or an equivalent regulated business, a business may demonstrate that this exemption applies where it obtains:
Article 18(6) - exemption from identification measures in respect of lawyers and real estate agents
A lawyer or real estate agent is exempt from applying the identification requirements in Article 13 to the extent that the measures require identification of a person within the meaning of Article 3(4)(b) if the lawyer or estate agent enters into a business relationship or carries out a one-off transaction for the purpose of enabling a customer, directly or indirectly, to enter into a registered contract (within the meaning of the Control of Housing and Work (Jersey) Law 2012).
There are a number of exemptions available under Article 18 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
Under Article 18(1), a business is exempt from applying the identification measures specified in Article 13 in respect of insurance business if –
Section 7.16.1 of the Handbook provides guidance that a business may demonstrate that it considers whether there is a higher risk of money laundering, the financing of terrorism, or the financing of proliferation when, among other things, it considers the reputation of the sponsoring employer and adequacy of controls in place over membership.
There are a number of exemptions available under Article 18 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
Under Article 18(2), a business is exempt from applying the identification measures specified in Article 13 if –
Section 7.16.2 of the Handbook notes that the following may be considered to be public authorities in Jersey:
There are a number of exemptions available under Article 18 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
Under Article 18(3), a business is exempt from applying the identification requirements in Article 13 in respect of the measures specified in Article 3(2)(a), (aa) and (c) in relation to a customer if the customer is –
Section 7.16.3 of the Handbook notes that a market may be considered to be IOSCO-compliant if it is operated in a country or territory that has been assessed as having “fully implemented” or “broadly implemented” IOSCO Principles 16 and 17. In order to be assessed as having “fully implemented” or “broadly implemented” Principle 17, a country or territory must require:
Section 7.16.3 of the Handbook further notes that whilst there is not a global list of countries and territories that “fully implement” or “broadly implement” IOSCO Principles 16 and 17, reference may be made to IMF Financial System Stability Assessment reports, prepared as part of the IMF Financial Sector Assessment Program. It goes on to explain that guidance published by the UK’s Joint Money Laundering Steering Group addresses what may be considered to be a regulated market and that the only list of exchanges currently available is for EU-regulated markets, published at ESMA Registers (europa.eu).
There are a number of exemptions available under Article 18 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
Under Article 18(4), a business is exempt from applying the identification requirements in Article 13 in respect of the measures specified in Article 3(2)(a) and (aa) (in so far as those measures require identifying any person purporting to act on behalf of the customer), 3(2)(c)(ii) and 3(2)(c)(iii) in relation to a customer if the customer is –
Section 7.16.4 of the Handbook notes that the exemption does not apply to any third party (or parties) for whom the customer is acting, or for the Beneficial owners and/or controllers of such a third party (or parties).
There are a number of exemptions available under Article 18 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
There are a number of exemptions available under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
None of the exemptions can be used if any of the following apply:
Article 17B - Exemption from applying third party identification requirements in relation to customers acting in certain regulated, investment or fund services business.
A business can only apply the Article 17B exemption where the customer is one of the following:
and is acting in the course of providing that business.
Under this Article 17B exemption, the business is exempt from applying third party identification requirements in relation to a third party for which the customer is acting.
In order to apply the Article 17B exemption, the business must record the reasons for applying the exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the relevant customer fail to –
This need to record how the Article 7B exemption requirements are met is reiterated in the Code requirement in section 7.14 of the Handbook.
Article 17C – Exemption from applying third party identification requirements in relation to certain customers involved in unregulated or non-public funds, trust company business or the legal profession
A business can apply the Article 17C exemption where the customer is any of the following:
and is acting in the course of providing that business.
If the business is a lawyer, an accountant or a deposit-taking business (a bank) it can apply the Article 17C exemption where the customer is a Jersey trust company business or an equivalent business, and is acting in the course of providing that business.
If the business is a deposit-taking business (a bank), it can apply the Article 17C exemption where the customer is an independent lawyer, notary or other registered legal professional in Jersey, and is acting in the course of providing that business.
In order to apply the Article 17C exemption, the business must:
The assurance from the customer will be adequate if it is reasonably capable of being regarded as reliable and the business who relies on it is satisfied that it is reliable. The assurance may be given in relation to one or more business relationships and for more than one transaction. The assurance need not be given before deciding not to comply with third party requirements if an assurance has previously been given by that customer to the business in relation to a business relationship or transaction.
A business who has given an assurance to another person may, if requested by the other person, provide the person with the information or evidence obtained from applying the identification measures to the third party.
In order to apply the Article 17C exemption, the business must also record the reasons for applying the Article 17C exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the customer fail to –
The business applying the Article 17C exemption must also, in the way and frequency it considers appropriate, test whether the customer –
and in conducting such tests consider whether the customer may be prevented, by application of a law, from providing that information or evidence.
If the customer is not able to pass the tests, the business cannot use the Article 17C exemption and must immediately apply its own identification measures to the third parties. Section 7.15.1 of the Handbook sets out a Code requirement that under these circumstances, a business must also review the basis upon which it has applied CDD exemptions to other relationships with that particular customer (if any) to determine whether it is still appropriate to apply those measures to other parties.
Section 7.15 of the Handbook provides some guidance on how a business applying the Article 17C exemption can be satisfied that there is little risk of money laundering, terrorist financing or proliferation financing occurring.
Section 7.15.1 of the Handbook provides some guidance on how a business applying an Article 17 or Article 18 exemption may demonstrate that it has considered the risks presented by a customer and the adequacy of the customer’s identification measures.
There are a number of exemptions available under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
The Article 17B exemption is an exemption from applying third party identification requirements in relation to customers acting in certain regulated, investment or fund services business.
The Article 17B exemption cannot be used if any of the following apply:
A business can only apply the Article 17B exemption where the customer is one of the following:
and is acting in the course of providing that business.
Under the Article 17B exemption, the business is exempt from applying third party identification requirements in relation to a third party for which the customer is acting.
In order to apply the Article 17B exemption, the business must record the reasons for applying the exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the relevant customer fail to –
Section 7.15.1 of the Handbook provides some guidance on how a business applying an Article 17 or Article 18 exemption may demonstrate that it has considered the risks presented by a customer and the adequacy of the customer’s identification measures.
There are a number of exemptions available under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
Article 17C provides an exemption from applying third party identification requirements in relation to certain customers involved in unregulated or non-public funds, trust company business or the legal profession.
The Article 17C exemption cannot be used if any of the following apply:
A business can apply the Article 17C exemption where the customer is one of the following:
and is acting in the course of providing that business.
There are also a couple of specific exemptions for specific types of business:
In order to apply the Article 17C exemption, the business must:
The assurance from the customer will be adequate if it is reasonably capable of being regarded as reliable and the business who relies on it is satisfied that it is reliable. The assurance may be given in relation to one or more business relationships and for more than one transaction. The assurance need not be given before deciding not to comply with third party requirements if an assurance has previously been given by that customer to the business in relation to a business relationship or transaction.
A business who has given an assurance to another person may, if requested by the other person, provide the person with the information or evidence obtained from applying the identification measures to the third party.
In order to apply the Article 17C exemption, the business must also record the reasons for applying the Article 17C exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the customer fail to –
The business applying the Article 17C exemption must also, in the way and frequency it considers appropriate, test whether the customer –
and in conducting such tests consider whether the customer may be prevented, by application of a law, from providing that information or evidence.
If the customer is not able to pass the tests, the business cannot use the Article 17C exemption and must immediately apply its own identification measures to the third parties. Section 7.15.1 of the Handbook sets out a Code requirement that under these circumstances, a business must also review the basis upon which it has applied CDD exemptions to other relationships with that particular customer (if any) to determine whether it is still appropriate to apply those measures to other parties.
Section 7.15 of the Handbook provides some guidance on how a business applying the Article 17C exemption can be satisfied that there is little risk of money laundering, terrorist financing or proliferation financing occurring.
Section 7.15.1 of the Handbook provides some guidance on how a business applying an Article 17 or Article 18 exemption may demonstrate that it has considered the risks presented by a customer and the adequacy of the customer’s identification measures.
There are a number of exemptions available under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different.
Article 17C provides a specific exemption for lawyers from applying third party identification requirements where the customer is a Jersey trust company business or an equivalent business, and is acting in the course of providing that business.
There are other exemptions which a lawyer may be able to use so you should look at each instance on a case-by-case basis and you may need to seek expert advice.
The Article 17C exemption cannot be used if any of the following apply:
In order to apply the Article 17C exemption, the lawyer must:
The assurance from the customer will be adequate if it is reasonably capable of being regarded as reliable and the lawyer who relies on it is satisfied that it is reliable. The assurance may be given in relation to one or more business relationships and for more than one transaction. The assurance need not be given before deciding not to comply with third party requirements if an assurance has previously been given by that customer to the lawyer in relation to a business relationship or transaction.
A business who has given an assurance to another person may, if requested by the other person, provide the person with the information or evidence obtained from applying the identification measures to the third party.
In order to apply the Article 17C exemption, the lawyer must also record the reasons for applying the Article 17C exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the customer fail to –
The lawyer applying the Article 17C exemption must also, in the way and frequency it considers appropriate, test whether the customer –
and in conducting such tests consider whether the customer may be prevented, by application of a law, from providing that information or evidence.
If the customer is not able to pass the tests, the lawyer cannot use the Article 17C exemption and must immediately apply its own identification measures to the third parties. Section 7.15.1 of the Handbook sets out a Code requirement that under these circumstances, a lawyer must also review the basis upon which it has applied CDD exemptions to other relationships with that particular customer (if any) to determine whether it is still appropriate to apply those measures to other parties.
Section 7.15 of the Handbook provides some guidance on how a lawyer applying the Article 17C exemption can be satisfied that there is little risk of money laundering, terrorist financing or proliferation financing occurring.
Section 7.15.1 of the Handbook provides some guidance on how a lawyer applying an Article 17 or Article 18 exemption may demonstrate that it has considered the risks presented by a customer and the adequacy of the customer’s identification measures.
What is the Article 17 exemption for accountants?
There are a number of exemptions available under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different.
Article 17C provides a specific exemption for accountants from applying third party identification requirements where the customer is a Jersey trust company business or an equivalent business, and is acting in the course of providing that business.
There are other exemptions which an accountant may be able to use so you should look at each instance on a case-by-case basis and you may need to seek expert advice.
The Article 17C exemption cannot be used if any of the following apply:
In order to apply the Article 17C exemption, the accountant must:
The assurance from the customer will be adequate if it is reasonably capable of being regarded as reliable and the accountant who relies on it is satisfied that it is reliable. The assurance may be given in relation to one or more business relationships and for more than one transaction. The assurance need not be given before deciding not to comply with third party requirements if an assurance has previously been given by that customer to the accountant in relation to a business relationship or transaction.
A business who has given an assurance to another person may, if requested by the other person, provide the person with the information or evidence obtained from applying the identification measures to the third party.
In order to apply the Article 17C exemption, the accountant must also record the reasons for applying the Article 17C exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the customer fail to –
The accountant applying the Article 17C exemption must also, in the way and frequency it considers appropriate, test whether the customer –
and in conducting such tests consider whether the customer may be prevented, by application of a law, from providing that information or evidence.
If the customer is not able to pass the tests, the accountant cannot use the Article 17C exemption and must immediately apply its own identification measures to the third parties. Section 7.15.1 of the Handbook sets out a Code requirement that under these circumstances, an accountant must also review the basis upon which it has applied CDD exemptions to other relationships with that particular customer (if any) to determine whether it is still appropriate to apply those measures to other parties.
Section 7.15 of the Handbook provides some guidance on how an accountant applying the Article 17C exemption can be satisfied that there is little risk of money laundering, terrorist financing or proliferation financing occurring.
Section 7.15.1 of the Handbook provides some guidance on how an accountant applying an Article 17 or Article 18 exemption may demonstrate that it has considered the risks presented by a customer and the adequacy of the customer’s identification measures.
There are a number of exemptions available under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different.
Article 17C provides specific exemptions for deposit-taking businesses (banks) from applying third party identification requirements where the customer is one of:
There are other exemptions which a deposit-taking business (bank) may be able to use so you should look at each instance on a case-by-case basis and you may need to seek expert advice.
The Article 17C exemption cannot be used if any of the following apply:
In order to apply the Article 17C exemption, the deposit-taking business (bank) must:
The assurance from the customer will be adequate if it is reasonably capable of being regarded as reliable and the deposit-taking business (bank) who relies on it is satisfied that it is reliable. The assurance may be given in relation to one or more business relationships and for more than one transaction. The assurance need not be given before deciding not to comply with third party requirements if an assurance has previously been given by that customer to the deposit-taking business (bank) in relation to a business relationship or transaction.
A business who has given an assurance to another person may, if requested by the other person, provide the person with the information or evidence obtained from applying the identification measures to the third party.
In order to apply the Article 17C exemption, the deposit-taking business (bank) must also record the reasons for applying the Article 17C exemption, having regard to the risk of money laundering inherent in the customer’s business and the higher risk of money laundering associated with that type of business should the customer fail to –
The deposit-taking business (bank) applying the Article 17C exemption must also, in the way and frequency it considers appropriate, test whether the customer –
and in conducting such tests consider whether the customer may be prevented, by application of a law, from providing that information or evidence.
If the customer is not able to pass the tests, the deposit-taking business (bank) cannot use the Article 17C exemption and must immediately apply its own identification measures to the third parties. Section 7.15.1 of the Handbook sets out a Code requirement that under these circumstances, the deposit-taking business (bank) must also review the basis upon which it has applied CDD exemptions to other relationships with that particular customer (if any) to determine whether it is still appropriate to apply those measures to other parties.
Section 7.15 of the Handbook provides some guidance on how a deposit-taking business (bank) applying the Article 17C exemption can be satisfied that there is little risk of money laundering, terrorist financing or proliferation financing occurring.
Section 7.15.1 of the Handbook provides some guidance on how a deposit-taking business (bank) applying an Article 17 or Article 18 exemption may demonstrate that it has considered the risks presented by a customer and the adequacy of the customer’s identification measures.
There are a number of exemptions from applying due diligence measures to third parties for whom customers are acting under Article 17 of the Money Laundering (Jersey) Order 2008 but care must be taken as the exemptions are different and the requirements linked to each exemption are different so you need to look at each instance on a case-by-case basis and you may need to seek expert advice.
Article 17B provides an exemption from applying third party identification requirements in relation to customers acting in certain regulated, investment or fund services business.
Article 17C provides an exemption from applying third party identification requirements in relation to certain customers involved in unregulated or non-public funds, trust company business or the legal profession.
None of the exemptions can be used if any of the following apply:
In order to apply the exemption, the business will have to meet the requirements of the specific exemption, which may include recording the reasons for applying the exemption and the risks of doing so; obtaining defined assurances from the customer; and testing the customer’s compliance with the assurances.
In financial services, the term "beneficial owner" refers to the individual or entity that ultimately owns or controls a financial asset, account, or investment. Identifying the beneficial owner is crucial for various reasons, including regulatory compliance, anti-money laundering (AML) efforts, and ensuring transparency in financial transactions. An individual or person does not have a beneficial owner.
Here are a few common scenarios in financial services where the concept of beneficial ownership is important:
Identifying the beneficial owner is often a part of due diligence procedures in financial services to ensure transparency and accountability. It helps prevent financial crimes, such as money laundering, tax evasion, and fraud, by making it more difficult for individuals or entities to hide their true ownership and control of assets. Regulatory authorities in many countries have implemented requirements for financial institutions to verify the beneficial ownership of their customers and report suspicious transactions to authorities when necessary.
If a non-profit organisation (NPO) either:
during the preceding 12 month period, then it is classified as a Prescribed NPO under Article 1 of the Prescribed Non-profit Organisations (Jersey) Order 2022.
Prescribed NPOs are supervised persons under Article 1 of the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 and must therefore comply with the requirements of that law, the Prescribed Non-profit Organisations (Jersey) Order 2022 and the AML/CFT/CPF Handbook.
These requirements are imposed on Prescribed NPOs because they are considered to present a higher level of risk than other NPOs, because Prescribed NPOs transact with jurisdictions other than Jersey, Guernsey, the Isle of Man, England, Wales and Scotland.
When dealing with low-risk customers ONLY, the JFSC AML/CFT/CPF Handbook indicates that a supervised person may demonstrate that it has obtained evidence that is reasonably capable of verifying (under Article 3(2)(a) of the Money Laundering Order) that an individual to be identified is who they are said to be where that evidence covers the following components:
This may also be applied to customers who are resident outside Jersey
In the case of a lower risk relationship with a customer who is resident in Jersey, a
supervised person may demonstrate that it has obtained evidence of identity under Article 3(2)(a) of the Money Laundering Order where that evidence is a Jersey Driving Licence or a birth certificate. If a birth certificate is presented, it can only be accepted if presented alongside with one of the following:
There is no formal requirement to appoint a deputy MLCO, but businesses should consider how they would deal with the MLCO's obligations if the appointed MLCO was absent or unable to fulfil their role for a period of time.
If a politician is considered to be senior, he or she is a Politically Exposed Person (“PEP”) as defined in Article 15A(3) of the Money Laundering Order. Because the politician’s role is in Jersey, he or she will be considered to be a Domestic PEP. (Foreign PEPs are individuals who hold or have held a prominent public function outside of Jersey).
Paragraph 67 of section 7.6.2 of the Handbook provides some guidance on positions which are included, but not limited to, Domestic PEPs. This guidance includes Ministers (but not necessarily deputy Ministers) and the immediate family members of close associates of such individuals.
Under Article 15A(2A) of the Money Laundering Order, a business may treat a Domestic PEP as not being a PEP two years after the person ceases to be entrusted with a prominent public function if the business is satisfied –
(a) that, following a risk assessment, the person does not present a higher risk of money laundering; and
(b) that there is no reason to continue to treat the person as a PEP.
The first information to be obtained is therefore the nature, seniority and timing of the politician’s public role. This information should be compared to the business’ policy on Domestic PEPs to determine whether the individual falls within the business’ definition of a Domestic PEP.
Under Article 15A(1)(c) of the Money Laundering Order, enhanced due diligence measures must be applied on a risk-sensitive basis if, in the case of a high risk business relationship or one-off transaction, a Domestic PEP is:
There is no requirement to apply enhanced due diligence measures in respect of a Domestic PEP in the case of a business relationship or one-off transaction which is not high risk. Paragraph 74 of section 7.6.2.1 of the Handbook provides some guidance on other characteristics that might indicate a higher risk, including where the Domestic PEP has:
Paragraph 75 of section 7.6.2.1 of the Handbook provides some guidance on characteristic that might indicate a higher risk in respect of the immediate family or close associate of a Domestic PEP, including:
The second piece of information to be obtained is therefore the assessed level of risk of the business relationship or one-off transaction. And the third piece of information is details of any characteristics of the Domestic PEP or their immediate family member or close associate if applicable, which could indicate a higher level of risk.
If the assessment concludes the level of risk is not high, there is no requirement to apply enhanced due diligence measures in respect of the Domestic PEP and only the standard due diligence measures defined in Article 3(2) of the Money Laundering Order are required.
If the assessment concludes the level of risk is high, it will be necessary to apply enhanced due diligence measures in respect of the Domestic PEP. Article 15(1)(a) states that enhanced due diligence measures must be applied on a risk sensitive basis.
The fourth piece of information to be obtained is therefore information on the role of the Domestic PEP with reference to the business relationship or one-off transaction. This combined with information on the characteristics of the Domestic PEP with reference to the guidance in paragraph 75 of section 7.6.2.1 of the Handbook. This information will allow the business to identify the risks presented by the Domestic PEP and the due diligence required to address those risks.
Article 15A(2) of the Money Laundering Order lists the following enhanced due diligence measures to be applied on a risk-sensitive basis:
a) unless the relevant person is a sole trader, measures requiring a new business relationship or continuation of a business relationship or a new one-off transaction to be approved by the senior management of the business;
b) measures to establish the source of the wealth of the PEP and the source of the funds involved in the business relationship or one-off transaction;
c) measures to conduct the enhanced on-going monitoring of that relationship; and
d) if the relevant business relationship relates to a high risk life insurance policy –
i. measures requiring the senior management to be informed before any payment is made under the policy or any right vested under the policy is exercised, and
ii. measures to consider whether to make a suspicious activity report.
Because enhanced due diligence measures should be applied on a risk-sensitive basis, it may not be necessary to apply all of the measures in all scenarios. For example, section 7.6.2 of the Handbook provides guidance on the enhanced due diligence which could be appropriate in two specific scenarios where no property of the PEP is handled in the business relationship or one-off transaction:
A full and formal record should be made of all enhanced due diligence measures applied in respect of any Domestic PEP. If any other risk factors have been identified, appropriate additional due diligence should be obtained to address these other risk factors. And the standard due diligence measures required under Article 3(2) of the Money Laundering Order must also be applied.
Sources:
Article 15A of the Money Laundering Order
Section 7.6 of the Handbook
At the moment AskMax.je does not have that information loaded into its knowledge base as the list is prone to frequent change and we did not want to supply outdated information. If you have concerns or want to check a country's status, you should visit the relevant JFSC web page at https://www.jerseyfsc.org/industry/financial-crime/amlcftcpf-handbooks/appendix-d2-countries-and-territories-identified-as-presenting-higher-risks/
I have not been provided with any information on data protection, the Data Protection (Jersey) Law 2018, the Financial Services (Jersey) Law 1998, the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1998 or the Insurance Business (Jersey) Law 1996. I am only able to assist with queries on the AML/CFT/CPF regime in Jersey.
I have not been provided with any information on outsourcing, periodic reviews, civil penalties, qualifications, closing a client structure, financial resource requirements, the ANLA calculation, the incorporation of a company, submission of information to the Registry, or any conduct of business or prudential requirements. I am only able to assist with queries on the AML/CFT/CPF regime in Jersey.
The Jersey Financial Services Commission (JFSC) is the regulator for the financial services industry in Jersey. It is responsible for regulating, developing and supervising the Island’s financial services industry. Businesses which are regulated by the JFSC are typically given the contact details of the relevant individual or team at the JFSC that they should contact, as well as access to the JFSC’s online portals which can be used to submit information. General contact details (team email addresses and telephone numbers) are published on the JFSC’s website. The JFSC publishes other useful information on their website including information on examinations, access to regulatory documents and news. I am able to assist with any queries on the AML/CFT/CPF regime in Jersey.
Activities conducted by lawyers that fall within the scope of Schedule 2 or "supervised business" are defined in paragraph 21 of Part 3 of Schedule 2 to the Proceeds of Crime (Jersey) Law. According to the information provided, the relevant operations and activities of lawyers, notaries, and other independent legal professionals (collectively referred to as Lawyers) which are considered supervised business are:
It is important to note that while the Money Laundering Order and the Handbook only bring within its scope the business activities of law firms where they are carrying on a supervised business, the Anti-Money Laundering and Counter-Terrorism Legislation and the general offences and penalties cover all persons and all business activities within Jersey.
Whilst there is no requirement for lawyers to apply AML-compliant systems and controls to activities which are not considered to be supervised business, as noted in section 15.1.1 of the Handbook, lawyers undertaking a significant proportion of supervised business may wish to consider applying the systems and controls to counter money laundering, the financing of terrorism, or the financing of proliferation across the whole of their business activities.
The principal information source in respect of outsourcing is the JFSC’s Outsourcing Policy which is published on the JFSC’s website. The Outsourcing Policy is not part of the information which has been provided.
The JFSC’s Handbook makes limited reference to outsourcing in section 2.4.4 with reference to a business’s corporate governance. Section 2.4.4 of the Handbook lists the following code requirements with reference to outsourcing:
• All supervised persons must comply with the JFSC’s Outsourcing policy and guidance note, except where an AMLSP performs AMLSP services on behalf of an AMLSP Direct Customer and such AMLSP services are consistent with the Money Laundering Order and the standards set out in the AML/CFT/CPF Codes of Practice and Guidance notes for AMLSPs in this Handbook;
• A supervised person must consider the effect that outsourcing has on money laundering, terrorist financing, and proliferation financing risk, in particular where an MLCO or MLRO is provided with additional support from other parties, either from within group or externally;
• A supervised person must assess possible money laundering, terrorist financing, and proliferation financing risk associated with outsourced functions, record its assessment, and monitor any risk on an on-going basis;
• Where an outsourced activity is a supervised business activity, then a supervised person must be satisfied that the provider of the outsourced services has in place policies and procedures that are consistent with those required under the Money Laundering Order and, by association, this Handbook;
• A supervised person must be satisfied that knowledge, suspicion, or reasonable grounds for knowledge or suspicion of money laundering, the financing of terrorism or proliferation financing activity will be reported by the provider of the outsourced service to the MLRO (or Deputy MLRO) of the supervised person.
Other sections of the Handbook that may be relevant with reference to outsourcing include:
4.3.5 – Use of E-ID
5.1 – Reliance on obliged persons
7.17 – Exemptions from CDD requirements where there is outsourcing or an AMLSP is appointed
8.2 – Suspicious activity reporting
13.8 – Collation of CDD
17 - NPOs
18 – AMLSPs
However, the principal information source in respect of outsourcing is the JFSC’s Outsourcing Policy but this is not part of the information which has been provided.
Section 4.3.3 of the Handbook provides guidance on suitable certification.
Paragraphs 52 to 55 inclusive of section 4.3.3 of the Handbook provide guidance on who may be considered to be suitable certifiers.
Paragraph 63 of section 4.3.3 of the Handbook provides guidance that the certification should state that the copy of the document is a true copy of an original document (or extract thereof) that includes information on the identity and/or residential address of an individual. Paragraph 64 of the Handbook provides guidance that in a case where the document to be certified relates to a legal arrangement or legal person, then the guidance note still applies, except that the documents to be certified will be those that provide evidence of identity of that arrangement or legal person.
Paragraph 65 of section 4.3.3 of the Handbook provides guidance that an adequate level of information to be provided by a suitable certifier about themselves will include their name, position or capacity, their address and a telephone number, or email address, at which they can be contacted. This applies regardless of what method of certification is used.
Paragraph 66 of section 4.3.3 of the Handbook provides guidance that a business may wish to take additional steps to validate the credentials of the suitable certifier and that these may include considering factors such as:
• the stature and track record of the suitable certifier;
• previous experience of accepting certifications from suitable certifiers in that profession or country or territory;
• the adequacy of the framework to counter money laundering, the financing of terrorism, or the financing of proliferation in place in the country or territory in which the suitable certifier is located; and
• the extent to which that framework applies to the suitable certifier.
Article 11(1) of the Money Laundering Order states that a relevant person (a business) must maintain appropriate and consistent policies and procedures relating to –
in respect of that person’s financial services business carried on in Jersey or elsewhere, or a financial services business carried on in Jersey or elsewhere by a subsidiary of that person, in order to prevent and detect money laundering.
Article 11(3) of the Money Laundering Order says that the appropriate and consistent policies and procedures must include policies and procedures for –
(a) the identification and scrutiny of –
(i) complex or unusually large transactions,
(ii) unusual patterns of transactions which have no apparent economic or visible lawful purpose, and
(iii) any other activity which the relevant person regards as particularly likely by its nature to be related to the risk of money laundering;
(b) the taking of additional measures, where appropriate, to prevent the use for money laundering of products and transactions which are susceptible to anonymity;
(ba) in relation to the development of new products, services or practices, including new delivery mechanisms, the identification and assessment of associated risks before the launch of such products, services or practices and the taking of appropriate measures to manage and mitigate those risks;
(bb) in relation to the use of new or developing technologies for new or existing products or services, the identification and assessment of associated risks before the launch of such technologies and the taking of appropriate measures to manage and mitigate those risks;
(c) determining whether –
(i) a customer,
(ii) a beneficial owner or controller of a customer,
(iii) a third party for whom a customer is acting,
(iv) a beneficial owner or controller of a third party described in clause (iii),
(v) a person acting, or purporting to act, on behalf of a customer,
(vi) a beneficiary under a life insurance policy,
(vii) a beneficial owner or controller of a beneficiary under a life insurance policy,
is a politically exposed person;
(d) determining whether a business relationship or transaction, or proposed business relationship or transaction, is with a person connected with a country or territory in relation to which the FATF has called for the application of enhanced customer due diligence measures;
(e) determining whether a business relationship or transaction or a proposed business relationship or transaction is with a person that is –
(i) subject to measures under law applicable in Jersey for the prevention and detection of money laundering,
(ii) connected with an organization that is subject to such measures, or
(iii) connected with a country or territory that is subject to such measures;
(f) assessing the risk referred to in Article 13(4)(b);
(fa) ensuring the periodic reporting to the senior management of a relevant person cases where, in reliance upon Article 13(4), identification measures have been completed after the establishment of a business relationship so as to enable the relevant person to –
(i) assess that appropriate arrangements are in place for the relevant person to address any risk of money laundering that arises in such cases, and
(ii) ensure that identification measures are completed as soon as reasonably practicable, as required by Article 13(4);
(fb) managing the risks in relation to the conditions under which a customer may utilise a business relationship with the relevant person before the identification of the customer has been completed;
(g) having particular regard to the requirements of Article 10A in respect of any branch and subsidiary of the relevant person where such branch or subsidiary is situated in a country or territory that does not apply, or insufficiently applies, the FATF recommendations.
Article 11(11) of the Money Laundering Order states that a relevant person must maintain adequate procedures for monitoring and testing the effectiveness of the following actions –
(a) the policies and procedures maintained under paragraph (1);
(b) the measures taken under paragraph (9); and
(c) the training provided under paragraph (10).
There are exemptions available for sole traders from some parts of Article 11.
Paragraphs 50 to 52 inclusive of section 2.4 of the Handbook sets out the Code level requirements that:
A supervised person must establish and maintain appropriate and consistent systems and controls to prevent and detect money laundering, the financing of terrorism, and the financing of proliferation, that enable it to:
In addition to those listed in Article 11(3) of the Money Laundering Order, a supervised person must have policies and procedures for:
A supervised person must check that the systems and controls (including policies and procedures) are operating effectively and test that they are complied with.
All of these policies and procedures should therefore be maintained by a business and documented in the business’s procedures manual (or equivalent).
Any business should also put in place any other systems and controls (including policies and procedures) which are needed for the business to be adequate and effective in preventing and detecting money laundering, the financing of terrorism and the financing of proliferation, as appropriate to the circumstances of the business.
“AskMax” is a joint project between Blue Llama Ltd and Cyan Services Ltd.
Max is an AI-powered assistant designed to provide guidance on Anti-Money Laundering (AML) matters in Jersey. Decisions and actions based on information provided by Max should always be validated with qualified human experts. Max’s responses are intended for informational purposes only and should not be considered as legal or professional advice.