Arrangement

SCHEDULE   19

THE MINISTER FOR TREASURY AND RESOURCES, in pursuance of Articles 37 and 43 of the Proceeds of Crime (Jersey) Law 1999[1], and having consulted the Jersey Financial Services Commission, orders as follows –

“ ‘designated supervisory body’ means a supervisory body designated under Article 6 of the Proceeds of Crime (Supervisory Bodies) Law;”;

“ ‘Drug Trafficking Offences Law’ means the Drug Trafficking Offences (Jersey) Law 1988[3];”;

“ ‘enhanced customer due diligence measures’ has the meaning in Article 15(2);”;

“ ‘Proceeds of Crime (Supervisory Bodies) Law’ means the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008[4];”;

“ ‘source of the funds’ means the source of the funds that are used or to be used in a business relationship or a one-off transaction;”;

“ ‘Terrorism Law’ means the Terrorism (Jersey) Law 2002[5];”;

“ ‘customer due diligence measures’ means the measures described in Article 3(1);”;

“ ‘identification measures’ means those measures described in Article 3(2);”;

“ ‘on-going monitoring’ has the meaning in Article 3(3);”;

“(2A) A relevant person must ensure that –

(a)     the individual appointed as compliance officer under this Article is of an appropriate level of seniority; and

(b)     such compliance officer has timely access to all records that are necessary or expedient for the purpose of performing his or her functions as a compliance officer.”;

“(10)  The notified person shall be deemed to have been appointed under this Article and the relevant person will be deemed to have complied with paragraph (6).”.

“(2A) A relevant person must ensure that –

(a)     the individual appointed as reporting officer under this Article is of an appropriate level of seniority; and

(b)     such reporting officer has timely access to all records that are necessary or expedient for the purpose of performing his or her functions as a reporting officer.”;

“(8)    The notified person shall be deemed to have been appointed under this Article and the relevant person will be deemed to have complied with paragraph (4).”.

“(2)    A relevant person must ensure that –

(a)     a designated person is of an appropriate level of seniority; and

(b)     a designated person has timely access to all records that are necessary or expedient for the purpose of performing his or her functions as a designated person.”.

“10A Financial Services Business carried on outside Jersey

(1)     This Article applies to financial services business carried on in a country or territory outside Jersey.

(2)     Subject to the provisions of this Article, a relevant person who falls within paragraph (b) of the definition ‘relevant person’ must –

(a)     comply with the requirements of this Order in respect of any financial services business to which this Article applies carried on by the relevant person;

(b)     ensure that any subsidiary of that relevant person applies measures that are at least equivalent to the requirements of this Order in respect of any financial services business to which this Article applies carried on by that subsidiary.

(3)     Subject to the provisions of this Article, a relevant person to whom paragraph (5) applies must apply measures that are at least equivalent to the requirements of this Order in respect of any financial services business to which this Article applies carried on by any branch.

(4)     Subject to the provisions of this Article, a relevant person to whom paragraph (5) applies must ensure that any subsidiary of that relevant person applies measures that are at least equivalent to the requirements of this Order in respect of any financial services business to which this Article applies carried on by that subsidiary.

(5)     This paragraph applies to a relevant person who falls within paragraph (a) of the definition ‘relevant person’ and who does not fall within paragraph (b) of that definition.

(6)     A relevant person need not comply with paragraphs (2), (3) and (4) to the extent that the law of the country or territory in which that person carries on a financial services business, or has a subsidiary carrying on such a business, has the effect of prohibiting compliance with those paragraphs.

(7)     Where paragraph (6) applies, the relevant person must inform the supervisory body exercising supervisory functions in relation to that relevant person under the Proceeds of Crime (Supervisory Bodies) Law.

(8)     Where paragraph (6) applies, to the extent that the law of the country or territory concerned does not have the effect of prohibiting or preventing the relevant person from taking other reasonable steps to deal effectively with the risk of money laundering, the relevant person must take those reasonable steps.

(9)     A relevant person need not comply with paragraphs (2), (3) and (4) in a country or territory outside Jersey in respect of any financial services business that falls within paragraphs 1 to 5 of Part B of Schedule 2 of the Law.

(10)    If, in a country or territory outside Jersey –

(a)     a relevant person carries on a financial services business or has a subsidiary carrying on such a business; and

(b)     that country or territory has more stringent requirements than those set out in this Order,

the relevant person must ensure that those more stringent requirements are complied with.”.

“Prevention and detection of money laundering”.

“11    Policies, procedures and training to prevent and detect money laundering”;

“(1)    A relevant person must maintain appropriate policies and procedures relating to –

(a)     customer due diligence measures;

(b)     reporting;

(c)     record-keeping;

(d)     screening of employees;

(e)     internal control;

(f)      risk assessment and management; and

(g)     the monitoring and management of compliance with, and the internal communication of, such policies and procedures,

in respect of that person’s financial services business in order to prevent and detect money laundering.”;

“(3)    The policies and procedures referred to in paragraph (2) 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;

(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,

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 that does not apply, or insufficiently applies, the FATF recommendations;

(e)     determining whether a business relationship or transaction, or proposed business relationship or transaction, is with a person connected with a country or territory that is subject to measures for purposes connected with the prevention and detection of money laundering, such measures being imposed by one or more countries or sanctioned by the European Union or the United Nations;

(f)      assessing the risk referred to in Article 13(4)(b).

(3A)   For the purposes of paragraph (3)(a) ‘scrutiny’ includes scrutinising the background and purpose of transactions and activities.

(4)     For the purposes of this Article ‘transaction’ means any of the following –

(a)     a one-off transaction;

(b)     transactions within a one-off transaction; and

(c)     transactions within a business relationship.”;

“(8)    A relevant person with any subsidiary or branch that carries on a financial services business must communicate to that subsidiary or branch that person’s policies and procedures for complying with paragraph (1).”;

“(10A)  For the purposes of paragraph (10), such training shall include the provision of information on current money laundering techniques, methods and trends.”;

“12    Exception from Article 11

A sole trader need not maintain policies and procedures relating to internal reporting, screening of employees and the internal communication of such policies and procedures.”.

“(b)    for the application of on-going monitoring, throughout the business relationship as described in Article 3(3).”;

“(2)    For the purposes of this Order ‘enhanced customer due diligence measures’ means customer due diligence measures that involve specific and adequate measures to compensate for the higher risk of money laundering.”;

“(3A) This paragraph applies where a relevant person has, or proposes to have, a business relationship with, or proposes to carry out a one-off transaction with, a person connected with a country or territory that does not apply, or insufficiently applies, the FATF recommendations.”;

“(4A) This paragraph applies to a relevant person who carries on a deposit-taking business as defined in Article 1 of the Banking Business (Jersey) Law 1991 except the doing of anything by or on behalf of –

(a)     the States;

(b)     the central bank of a member State of the European Community; or

(c)     the National Savings Bank of the United Kingdom.

(4B)   Where paragraph (4) applies, the specific and adequate measures that are referred to in paragraph (2) shall include –

(a)     gathering sufficient information about the institution to understand fully the nature of its business;

(b)     determining the reputation of the institution and the quality of its supervision, including whether it has been subject to any money laundering investigation or regulatory action;

(c)     assessing the institution’s systems and controls to combat money laundering in order to determine whether they are consistent with the requirements of the FATF recommendations and their effectiveness;

(d)     requiring any new relationship to be approved by the senior management of the relevant person;

(e)     recording the respective responsibilities of the relevant person and the institution to prevent and detect money laundering so that both parties clearly understand those responsibilities;

(f)      being satisfied that, in respect of customers of the institution who have services provided directly by the relevant person, that the institution has applied customer due diligence measures at least equivalent to those set out in this Order and is able to provide a copy, at the request of the relevant person, of the evidence, documents, data and information obtained when applying such measures.”;

“(5)    This paragraph applies where –

(a)     a relevant person has or proposes to have a business relationship with a politically exposed person or proposes to carry out a one-off transaction with such a person; or

(b)     any of the following is a politically exposed person –

(i)      a beneficial owner or controller of the customer,

(ii)      a third party for whom a customer is acting,

(iii)     a beneficial owner or controller of a third party described in clause (ii),

(iv)     a person acting, or purporting to act, on behalf of the customer.

(5A)   Where paragraph (5) applies, the specific and adequate measures that are referred to in paragraph (2) must include –

(a)     requiring any new business relationship or continuation of such a relationship or any new one-off transaction to be approved by the senior management of the relevant person; and

(b)     measures to establish the source of the wealth of the politically exposed person and source of the funds involved in the business relationship or one-off transaction.

(5B)   In paragraph (5A)(b) ‘source of the wealth’ means the source generating the total net worth of funds of the politically exposed person, whether or not those funds are used in the business relationship or one-off transaction.”.

“(ii)    the other person is required to keep and does keep evidence of the identification, as described in Article 3(4), relating to each of the other person’s customers and a record of such evidence,”;

“(iii)   the other person will keep the evidence described in clause (ii) and will provide a copy of that evidence without delay to the relevant person at the relevant person’s request;”;

“(6A) Case F is where the customer of a relevant person is a body corporate the securities of which are listed on a regulated market where ‘regulated market’ has the same meaning as in Article 2(5).”;

“(ii)    all the supporting documents, data or information that have been obtained in respect of a business relationship or one-off transaction following the application of customer due diligence measures;”;

“(5)    Where the relevant person (‘first person’) is an introducer or intermediary and has given the assurance that is required under Article 16(4)(b) to another relevant person (‘second person’), the first person must make available to the second person, at the second person’s request, a copy of the evidence of identification that the first person is required to keep under this Article, such evidence being the evidence that is referred to in Article 16(4)(b)(iii).”.

“reporting and disclosure”.

“21    Reporting procedures and related disclosure requirements”;

“(c)    they must provide for securing that a report is made to the person who is referred to in paragraph (6)(a), (b) and (c) for the purposes of the provisions mentioned in that paragraph;”;

“(h)    they must provide for securing that the information or other matter contained in a report is disclosed, by the person considering the report under sub-paragraph (d) or (f), to a designated police officer or designated customs officer as soon as is practicable, using the form set out in the Schedule to this Order (‘Form’), where the person considering the report knows or suspects, or has reasonable grounds for knowing or suspecting, that another person is engaged in money laundering;”;

“(ha)  they must provide for securing that the person who makes a disclosure under sub-paragraph (h) provides the designated police officer or designated customs officer with such additional information relating to that disclosure as that officer may reasonably request and that such information is provided in such form and within such reasonable period as that officer may reasonably request;”;

“(2)    If a person considering a report under paragraph (1)(d) or (1)(f) knows or suspects, or has reasonable grounds for knowing or suspecting, that another person is engaged in money laundering, the first person must, as soon as is practicable, make a disclosure to a designated police officer or designated customs officer –

(a)     by using the Form; and

(b)     in compliance with the requirements indicated on the Form.

(3)     The person making the disclosure under paragraph (2) must ensure that –

(a)     a completed Form is delivered in the manner indicated on the Form; and

(b)     any information entered upon or accompanying the Form is legible.

(4)     A person who makes a disclosure under paragraph (2) must provide the designated police officer or designated customs officer with such additional information relating to that disclosure as that officer may reasonably request in such form and within such reasonable period as that officer may require.

(5)     Where the relevant person’s business falls within paragraph 1 or 2 of Part B of Schedule 2 to the Law the requirements described in paragraphs (1)(h), (1)(ha), (2) and (4) need not apply where the information or other matter that would be the subject of disclosure has been received in the course of ascertaining the legal position for the relevant person’s client or performing the task of defending or representing the client in, or concerning, legal proceedings, including advice on the institution of legal proceedings.

(6)     A designated person or, if there is no such person, the reporting officer, shall be –

(a)     the nominated officer referred to in –

(i)      Article 40A of the Drug Trafficking Offences Law,

(ii)      Article 34D of the Law, and

(iii)     Article 23 of the Terrorism Law;

(b)     the appropriate person referred to in –

(i)      Articles 37(5) and 38(8) of the Drug Trafficking Offences Law, and

(ii)      Articles 32(5) and 33(8) of the Law; and

(c)     the person to whom disclosure may be made under any procedure established by an employer as described in Articles 21(4) and 22(6) of the Terrorism Law.”.

“22A Disclosure within the relevant person’s organization

A relevant person may disclose –

(a)     the information contained in any report for the purpose of any of the provisions mentioned in Article 21(6);

(b)     any additional information required under Article 21(4);

(c)     the information contained in any record kept by the relevant person for the purpose of this Order,

to any person or institution with whom or which the relevant person shares common ownership, management or compliance control where such disclosure is appropriate for the purpose of preventing and detecting money laundering.”.

“(n)    an agent appointed by the Commission under Article 10(1) of the Financial Services Commission (Jersey) Law 1998.”;

“(5A) If a designated supervisory body (other than the Commission) –

(a)     obtains any information; and

(b)     is of the opinion that the information indicates that any person has or may have been engaged in money laundering,

that body shall disclose that information to a designated police officer or designated customs officer as soon as is reasonably practicable.

(5B)   If a person is a secondary recipient of information obtained by a designated supervisory body (other than the Commission) and forms such an opinion as is described in paragraph (5A)(b), the person may disclose the information to a designated police officer or designated customs officer.

(5C)   If any person referred to in paragraph (5D) –

(a)     obtains any information while acting in the course of any investigation, or discharging functions, to which the person’s authorization or appointment relates; and

(b)     is of the opinion that the information indicates that any other person has or may have been engaged in money laundering,

the first person shall as soon as reasonably practicable disclose that information to the persons and bodies referred to in paragraph (5E).

(5D)   The persons to whom this paragraph refers are –

(a)     a person authorized by a suitable supervisory body under Article 30 of the Proceeds of Crime (Supervisory Bodies) Law to require a person to provide information or documents or to answer questions; and

(b)     a person appointed by a suitable supervisory body under Article 31 of that Law to investigate and report under that Article to that body.

(5E)   The persons and bodies to whom this paragraph refers are –

(a)     the suitable supervisory body referred to in paragraph (5D); and

(b)     a designated police officer or designated customs officer.

(5F)   In this Article ‘suitable supervisory body’ has the same meaning as in the Proceeds of Crime (Supervisory Bodies) Law.”.

“part 5A

Other measures

23A   Shell banks

(1)     A relevant person to whom paragraph (3) applies must not enter into or continue a banking relationship with a shell bank.

(2)     A relevant person to whom paragraph (3) applies must take appropriate measures to ensure that he or she does not enter into, or continue, a banking relationship with a bank that is known to permit its accounts to be used by a shell bank.

(3)     This paragraph applies to a relevant person who carries on a deposit-taking business as defined in Article 1 of the Banking Business (Jersey) Law 1991 except the doing of anything by or on behalf of –

(a)     the States;

(b)     the central bank of a member State of the European Community; or

(c)     the National Savings Bank of the United Kingdom.

(4)     For the purposes of paragraphs (1) and (2) –

(a)     ‘bank’ means a person or body carrying on a deposit-taking business within the meaning of the Banking Business (Jersey) Law 1991 whether or not that business is carried on from within Jersey; and

(b)     ‘shell bank’ means a bank incorporated in a jurisdiction in which it has no physical presence involving meaningful decision-making and management, and which is not subject to supervision by the Commission or by an overseas regulatory authority by reason of that bank’s connection with any other institution or person.

(5)     For the purposes of paragraph (4)(b), ‘connection’ has the same meaning as in Article 3A of the Income Tax (Jersey) Law 1961.

23B   Anonymous accounts

A relevant person must not, in relation to any of that person’s customers, set up an anonymous account or an account in a name which it knows, or has reasonable cause to suspect, to be fictitious.

23C   Directions where the Financial Action Task Force applies counter- measures

(1)     The Minister may, after consultation with the Commission and any relevant supervisory body, direct any relevant person –

(a)     not to enter into a business relationship;

(b)     not to carry out a one-off transaction;

(c)     not to proceed any further with a business relationship or one-off transaction;

(d)     to impose any prohibition, restriction or limitation relating to a business relationship or one-off transaction;

(e)     to apply enhanced customer due diligence measures to any business relationship or one-off transaction,

with any person who is situated or incorporated in a country or territory to which the international body known as the Financial Action Task Force on Money Laundering has decided to apply counter-measures.

(2)     In paragraph (1), ‘relevant supervisory body’ means the supervisory body exercising supervisory functions in relation to that relevant person under the Proceeds of Crime (Supervisory Bodies) Law.”.