Arrangement

THE CHIEF MINISTER, 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 –

“ ‘obliged person’ has the meaning in Article 16(1);”;

“(ii)    other legal person registered in Jersey,”;

“ ‘subsidiary’ means, in relation to a relevant person, a legal person that is majority owned or controlled by the relevant person;”.

“(5)    This paragraph applies to a relevant person who –

(a)     falls within paragraph (a) of the definition ‘relevant person’;

(b)     does not fall within paragraph (b) of that definition; and

(c)     is not registered, incorporated or otherwise established other than under Jersey law.”.

“(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)    the identification and assessment of risks that may arise in relation to the development of new products, services or practices, including new delivery mechanisms;

(bb)    the identification and assessment of risks that may arise in relation to the use of new or developing technologies for new or existing products or services;”;

“(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);”;

“(6)    A relevant person need not comply with paragraph (1) 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 to the Law.”;

“(12)  A relevant person, when considering the type and extent of the testing to be carried out under paragraph (11), shall have regard to the risk of money laundering that exists in respect of the relevant person’s business, and matters that may have an impact on that risk, such as    the size and nature and structure of the relevant person’s business.”.

“(3A) The appropriate time for applying the identification measure of finding out the identity of a person (as required by Article 3(4)) is a date that is not later than 31st December 2014, or such later date as may be agreed in writing by the Commission upon application by the relevant person to the Commission on or before 31st December 2014.

(3B)   For the purposes of paragraph (3A), the requirement of finding out the identity of a person may be satisfied by a relevant person if the relevant person holds, in relation to that person, information as to the person’s identity that is commensurate to the relevant person’s assessment of the risk that the continuing business relationship with that person will involve money laundering.”;

“(6)    Identification measures described in Article 3(4)(b) may be completed after the establishment of a business relationship that relates to a life insurance policy if –

(a)     the identification measures relate to a beneficiary under the policy; and

(b)     the relevant person is satisfied that there is little risk of money laundering occurring as a result of completing such identification after the establishment of that relationship.

(7)     Where the identification measures are not completed, in accordance with paragraph (6), before the establishment of the business relationship, they must be completed before any payment is made under the policy or any right vested under the policy is exercised.

(8)     Identification measures described in Article 3(4)(b) may be completed after the establishment of a business relationship that relates to a trust or foundation if –

(a)     the identification measures relate to a person who has a beneficial interest in the trust or foundation by virtue of property or income having been vested in that person; and

(b)     the relevant person is satisfied that there is little risk of money laundering occurring as a result of completing such identification after the establishment of that relationship.

(9)     Where the identification measures are not completed, in accordance with paragraph (8), before the establishment of the business relationship, they must be completed before any distribution of trust property or income is made.

(10)    Paragraph (11) applies to a relevant person before establishing a business relationship, or who is in a business relationship, with a holder of units in respect of any of the following –

(a)     a recognized fund, within the meaning of the Collective Investment Funds (Jersey) Law 1988[3];

(b)     an unclassified fund, within the meaning of the Collective Investment Funds (Jersey) Law 1988;

(c)     an unregulated fund, within the meaning of the Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008[4];

(d)     a non-public fund (as defined in Article 17(12)), being a fund, other than a fund described in sub-paragraph (a), (b) or (c), in respect of which a service is provided by a business described in paragraph 7(1)(h) of Part B of Schedule 2 to the Law.

(11)    A relevant person to whom paragraph (10) applies shall not be required to comply with the obligations under paragraph (1) or Article 15 in relation to a holder of any units in any such scheme or fund if –

(a)     the holder of the units acquires the units through a secondary market transaction;

(b)     a person who is –

(i)      carrying on investment business and is registered to carry on such business under the Financial Services (Jersey) Law 1998[5], or

(ii)      carrying on equivalent business to investment business,

has in relation to that holder applied the identification measures specified in Article 3(2) and (3) or, if that person is outside Jersey, has applied similar identification measures that satisfy Recommendation 5 of the FATF Recommendations.

(12)    For the purposes of paragraph (11) –

(a)     ‘secondary market’ means a financial market in which previously issued units are bought and sold;

(b)     ‘unit’ has the same meaning as in Article 1(1) of the Collective Investment Funds (Jersey) Law 1988.”.

“16    Reliance on relevant person or person carrying on equivalent business

(1)     Provided the conditions in paragraph (3) and (4) are met, in order to meet the relevant person’s obligations under Article 13(1), by virtue of Article 13(1)(a) or 13(1)(c)(ii), or under Article 15(1), by virtue of Article 15(1)(b), 15(3) or 15(5), a relevant person may rely on a person who the relevant person knows or has reasonable grounds for believing is a relevant person in respect of whose financial services business the Commission discharges supervisory functions, or is a person carrying on equivalent business (each referred to as ‘obliged person’) –

(a)     to apply the identification measures specified in Article 3(2)(a), (b) and (c); or

(b)     if the person is not in Jersey, to apply similar identification measures that the obliged person applies that satisfy recommendation 5 of the FATF recommendations,

in respect of any person to whom paragraph (2) applies.

(2)     This paragraph applies to –

(a)     a customer of the obliged person;

(b)     any beneficial owner or controller of that customer;

(c)     any third party for whom that customer is acting;

(d)     any beneficial owner or controller of a third party for whom that customer is acting; or

(e)     any person purporting to act on behalf of that customer.

(3)     The conditions mentioned in paragraph (1) are that –

(a)     the obliged person consents to being relied on;

(b)     the relevant person obtains adequate assurance in writing from the obliged person that in the course of an established business relationship or one-off transaction –

(i)      the obliged person has applied the identification measures mentioned in paragraph (1)(a) or (1)(b), as the case may be, in relation to the customer,

(ii)      the obliged person has not relied upon another party to have applied any of those identification measures,

(iii)     the obliged person has not, in reliance upon any provision in Article 17 or 18 (or in the case of the obliged person being outside Jersey, in reliance upon a provision of similar effect to a provision in Article 17 or 18), applied identification measures that are less than those referred to in paragraph (1), and

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

(c)     the obliged person immediately provides in writing to the relevant person the information found out by the obliged person as a result of having applied the identification measures referred to in paragraph (1)(a) or (1)(b), as the case may be; and

(d)     the relevant person obtains adequate assurance in writing from the obliged person that the obliged person will –

(i)      keep the evidence the obliged person has obtained during the course of applying the identification measures until such time as the obliged person has either provided the relevant person with that evidence or has been notified by the relevant person that the relevant person no longer requires that evidence to be kept, and

(ii)      provide the relevant person with that evidence without delay if requested to do so by the relevant person.

(4)     The conditions mentioned in paragraph (1) are that immediately before relying upon a person described in that paragraph the relevant person must assess the risk of doing so and make a written record as to the reason the relevant person considers that it is appropriate to do so, having regard to –

(a)     the higher risk of money laundering should the obliged person fail to –

(i)      apply the identification measures referred to in paragraph (1)(a) or (1)(b) as the case may be,

(ii)      provide the information to the relevant person, or

(iii)     keep the evidence the obliged person has obtained during the course of applying the identification measures until such time as the obliged person has either provided the relevant person with that evidence or has been notified by the relevant person that the relevant person no longer requires that evidence to be kept; and

(b)     the risk that the obliged person will fail to provide the relevant person with that evidence without delay if requested to do so by the relevant person.

(5)     Where a relevant person relies upon an obliged person to apply the identification measures referred to in paragraph (1)(a) or (1)(b), as the case may be, the relevant person shall –

(a)     conduct such tests in such manner and at such intervals as the relevant person deems appropriate in all the circumstances in order to establish whether the obliged person –

(i)      has appropriate policies and procedures in place to apply the identification measures described in Article 13(1), by virtue of Article 13(1)(a) or 13(1)(c)(ii), or in Article 15(1), by virtue of Article15(1)(b), 15(3) or 15(5), or

(ii)      if the obliged person is not in Jersey, has appropriate policies and procedures in place to apply similar identification measures that satisfy the FATF recommendations in respect of identification measures; and

(b)     conduct such tests in such manner and at such intervals as the relevant person deems appropriate in all the circumstances in order to establish whether the obliged person –

(i)      keeps the evidence that the obliged person has obtained during the course of applying identification measures in respect of a person, and

(ii)      provides the relevant person with that evidence without delay if requested to do so by the relevant person.

(6)     In carrying out the tests –

(a)     the requirement to conduct the test referred to in paragraph (5)(b) shall not apply where the obliged person has already provided the evidence to the relevant person; and

(b)     the tests must take into consideration whether the obliged person may be prevented, by application of a law, from providing that information or evidence, as the case may be.

(7)     Where, as a result of a test carried out under paragraph (5), the relevant person is not satisfied that the obliged person has appropriate policies and procedures in place to apply the identification measures referred to in paragraph (5)(a), or does not keep the evidence referred to in paragraph (5)(b), or provide it without delay if requested to do so by the relevant person, the relevant person shall immediately apply identification measures required under Article 13(1), by virtue of Article 13(1)(a) or 13(1)(c)(ii).

(8)     For the purposes of paragraph (3) –

(a)     assurance is adequate if –

(i)      it is reasonably capable of being regarded as reliable, and

(ii)      the person who relies on it is satisfied that it is reliable; and

(b)     assurance may be given in relation to one or more business relationships and for more than one transaction.

(9)     Nothing in this Article shall permit a relevant person to rely on the identification measures of an obliged person if –

(a)     the relevant person suspects money laundering;

(b)     the relevant person considers that there is a higher risk of money laundering on the basis of the assessment made under paragraph (4); or

(c)     the obliged person is a person having a relevant connection with an enhanced risk state (as defined in Article 15(3A)(a)).

(10)    Despite the relevant person’s reliance on the obliged person, the relevant person remains liable for any failure to apply the measures referred to in paragraph (1)(a) or (b), as the case may be.

16A   Reliance upon persons in same financial group as relevant person

(1)     A relevant person, in order to meet the relevant person’s obligations under Article 13(1), by virtue of Article 13(1)(a) or 13(1)(c)(ii), or under Article 15(1), by virtue of Article 15(1)(b), 15(3) and 15(5), may rely on a person outside Jersey who is not an obliged person (‘other person’) to apply similar identification measures to those specified in Article 3(2)(a), (b) and (c) that satisfy recommendation 5 of the FATF recommendations if –

(a)     that other person is a member of the same financial group as the relevant person;

(b)     that other person carries on a business which, if that business were carried on in Jersey, would be a financial services business;

(c)     the financial group applies the customer due diligence measures and record keeping requirements required under this Order or in recommendations 5, 6 and 10 of the FATF recommendations;

(d)     the financial group to which the relevant person and the other person belong maintains a programme against money laundering which includes policies and procedures by which every member of the financial group who carries on financial services business or equivalent business shares information that is appropriate for the purpose of preventing and detecting money laundering;

(e)     the implementation of customer due diligence and record keeping requirements, and of the programme referred to in sub-paragraph (d), are supervised by an overseas regulatory authority; and

(f)      the conditions that must be complied with for a relevant person to rely upon a person under Article 16(1) (including the requirements described in Article 16(4) and 16(5)) are satisfied.

(2)     For the purposes of paragraph (1) and Article 22A, a person is a member of the same financial group as another person if there is, in relation to the group, a parent company or other legal person that exercises control over every member of that group for the purposes of applying group supervision under –

(a)     the core principles for effective banking supervision published by the Basel Committee on Banking Supervision (ISBN 92-9131-164-4);

(b)     the Objectives and Principles of Securities Regulation issued by the International Organisation of Securities Commissions; and

(c)     the Insurance Supervisory Principles issued by the International Association of Insurance Supervisors.”.

“17    Simplified identification measures in circumstances where the customer is a relevant person

(1)     Simplified identification measures described in paragraphs (3), (5), (6), (7) and (8) apply if the relevant person knows or has reasonable grounds for believing that a customer is –

(a)     a relevant person in respect of whose financial services business the Commission discharges supervisory functions, or a person carrying on equivalent business; or

(b)     a person –

(i)      wholly owned by a person (the ‘parent’) mentioned in sub-paragraph (a), and

(ii)      fulfilling the conditions in paragraph (2).

(2)     The conditions mentioned in paragraph (1)(b)(ii) are that –

(a)     the person is incorporated or registered, as the case may be, in the same jurisdiction as the parent;

(b)     the person has no customers who are not customers of the parent;

(c)     the person’s activity is ancillary to the business in respect of which the Commission discharges supervisory functions, or equivalent business carried on by the parent; and

(d)     in relation to that activity, the person maintains the same policies and procedures as the parent.

(3)     Provided the relevant person satisfies the condition in paragraph (4), a relevant person need not, if the relevant person thinks appropriate, comply with the requirements of Article 13 or 15 to apply the identification measures specified in Article 3(2)(b) to a third party for which the customer is acting where the customer, or the parent of its customer is acting in the course of a business –

(a)     that falls within paragraph (a), (b) or (d) in the definition of “regulated business”;

(b)     that is investment business or fund services business registered under the Financial Services (Jersey) Law 1998; or

(c)     that is equivalent business to any category of business described in sub-paragraph (a) or (b).

(4)     The condition referred to in paragraph (3) is that, immediately before applying the simplified identification measures in the manner described in that paragraph, the relevant person shall assess and make a written record as to the reason the relevant person thinks it appropriate to apply those simplified measures, having regard to the customer’s business and the higher risk of money laundering should the customer fail to –

(a)     apply the identification measures specified in Article 3(2)(b) or if the person is not in Jersey, similar identification measures required to be applied to satisfy the requirements in recommendation 5 of the FATF recommendations; or

(b)     keep records, or keep them for the period required to be kept.

(5)     Provided the relevant person satisfies the conditions in paragraph (9), if that relevant person thinks appropriate and is satisfied, by reason of the nature of the relationship with a customer, that there is little risk of money laundering occurring, that relevant person need not comply with the requirements of Article 13 or 15 to apply the identification measures specified in Article 3(2)(b) to a third party for which the customer is acting where the customer –

(a)     is or carries on business in respect of an unregulated fund, within the meaning of the Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008;

(b)     is or carries on business in respect of a fund that is a non-public fund, being a fund in respect of which a service is provided that is described in paragraph 7(1)(h) of Part B of Schedule 2 to the Law; or

(c)     is carrying on equivalent business to a business described in sub-paragraph (a) or (b).

(6)     Provided the relevant person satisfies the conditions in paragraph (9), if a relevant person who is carrying on deposit-taking business is satisfied, by reason of the nature of the relationship with a customer, that there is little risk of money laundering occurring, that relevant person need not comply with the requirements of Article 13 or 15 to apply the identification measures specified in Article 3(2)(b) to a third party for which the customer is acting where the customer –

(a)     is carrying on trust company business and is registered to carry on such business under the Financial Services (Jersey) Law 1998; or

(b)     is carrying on equivalent business to a business described in sub-paragraph (a).

(7)     Provided the relevant person satisfies the conditions in paragraph (9), if a relevant person who is carrying on deposit-taking business thinks appropriate and is satisfied, by reason of the nature of the relationship with a customer that there is little risk of money laundering occurring, that relevant person need not comply with the requirements of Article 13 or 15 to apply the identification measures specified in Article 3(2)(b) to a third party for which the customer is acting where the customer –

(a)     is an independent legal professional –

(i)      carrying on a business described in paragraph 1 of Part B of Schedule 2 to the Law, and

(ii)      registered to carry on such business under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008[6]; or

(b)     is carrying on equivalent business to a business described in sub-paragraph (a).

(8)     Provided the relevant person satisfies the conditions in paragraph (9), if a relevant person who is a lawyer carrying on a business described in paragraph 1 of Part B of Schedule 2 to the Law or an accountant carrying on a business described in paragraph 2 of Part B of Schedule 2 to the Law thinks appropriate and is satisfied, by reason of the nature of the relationship with a customer, that there is little risk of money laundering occurring, that relevant person need not comply with the requirements of Article 13 or 15 to apply the identification measures specified in Article 3(2)(b) to a third party for which the customer is acting where the customer –

(a)     is carrying on trust company business, and is registered to carry on such business under the Financial Services (Jersey) Law 1998; or

(b)     is carrying on equivalent business to a business described in sub-paragraph (a).

(9)     The conditions referred to in paragraph (5), (6), (7) and (8) are that, immediately before applying the simplified identification measures in the manner described in those paragraphs, the relevant person shall –

(a)     assess and make a written record as to the reason the relevant person thinks it appropriate to apply those simplified measures, having regard to the customer’s business and the higher risk of money laundering should the customer fail to –

(i)      apply the identification measures specified in Article 3(2)(b), or if the person is not in Jersey, similar identification measures required to be applied to satisfy the requirements in recommendation 5 of the FATF recommendations, or

(ii)      keep records, or keep them for the period required to be kept;

(b)     obtain adequate assurance in writing from the customer that the customer –

(i)      in furtherance of the customer’s obligations under Article 13(1)(a) and (c)(ii) and Article 15 has applied the identification measures specified in Article 3(2)(b) to the third party, or

(ii)      in the case of a customer who is not in Jersey, has applied similar identification measures that the relevant person applies that satisfy recommendations 5 and 6 of the FATF recommendations; and

(c)     obtain adequate assurance in writing from the customer that the customer –

(i)      will provide the relevant person, without delay and in writing, the information found out by the customer as a result of having applied the identification measures if so requested by the relevant person,

(ii)      will keep the evidence the customer has obtained during the course of applying the identification measures, and

(iii)     will provide the relevant person with that evidence without delay if requested to do so by the relevant person.

(10)    Where a relevant person applies simplified identification measures under paragraph (5), (6), (7) or (8), the relevant person shall –

(a)     conduct such tests in such manner and at such intervals as the relevant person deems appropriate in all the circumstances in order to establish –

(i)      whether the customer has appropriate policies and procedures in place to apply the identification measures described in Articles 13(1)(a), 13(c)(ii) and 15 (or in the case of a customer who is outside Jersey, similar identification measures that satisfy the FATF recommendations in respect of identification measures),

(ii)      whether the customer finds out information in relation to the third party, and

(iii)     whether the customer –

(A)    keeps the information or evidence that the customer has obtained during the course of applying identification measures in respect of a third party, and

(B)     provides the relevant person with that information or evidence without delay if requested to do so by the relevant person; and

(b)     in carrying out such tests take into consideration whether the customer may be prevented, by application of a law, from providing that information or evidence, as the case may be.

(11)    Where as a result of a test carried out under paragraph (10) the relevant person is not satisfied that the customer has found out information in relation to the third party as referred to in paragraph (10)(a)(ii), or does not keep the information or evidence as referred to in paragraph (10)(a)(iii), or provide it without delay if requested to do so by the relevant person, the relevant person shall immediately apply identification measures as required under Article 13(1)(a) and 13(c)(ii).

(12)    In this Regulation “non-public fund” means a scheme falling within the definition of “collective investment fund” in Article 3 of the Collective Investment Funds (Jersey) Law 1988 except that the offer of units in the scheme or arrangement is not an offer to the public within the meaning of that Article.

(13)    For the purposes of paragraph (9) –

(a)     assurance is adequate if –

(i)      it is reasonably capable of being regarded as reliable, and

(ii)      the person who relies on it is satisfied that it is reliable;

(b)     assurance may be given in relation to one or more business relationships and for more than one transaction; and

(c)     assurance need not be given immediately before applying simplified measures in a case where assurance has previously been given in relation to a business relationship or transaction.

(14)    Nothing in this Article shall permit a relevant person to rely on the identification measures of a customer if –

(a)     the relevant person suspects money laundering;

(b)     the relevant person considers that there is a higher risk of money laundering on the basis of the assessments made under paragraphs (4) or (9);

(c)     the customer is a person in respect of whom Article 15(3A) applies; or

(d)     the customer is a person in respect of whom Article 15(4) applies.”.

“(9)    Nothing in this Article shall apply if –

(a)     the relevant person suspects money laundering;

(b)     the relevant person considers that there is a higher risk of money laundering; or

(c)     the customer is a person in respect of whom Article 15(3A) applies.”.

“(5)    Where an obliged person who is a relevant person has given an assurance under Article 16 (or under a provision that applies outside Jersey that is equivalent to Article 16) to another relevant person, the obliged person must make available to that other relevant person, at the other relevant person’s request, evidence of identification that the obliged person is required to keep under this Article, such evidence being the evidence that is referred to in Article 16(3)(d) (or in a provision that applies outside Jersey that is equivalent to Article 16(3)(d)).

(6)     Where a relevant person has given an assurance to another person that is required under Article 17 (or under a provision that applies outside Jersey that is equivalent to Article 16(3)(d) or Article17), the relevant person may make available to that other person, at that other person’s request, the information or the evidence of identification that the relevant person is required to keep under this Article, such evidence being the information and evidence that is referred to in Article 17(9)(c) (or in a provision that applies outside Jersey that is equivalent to Article 16(3)(d) or 17(9)(c)).

(7)     A relevant person may make available to a another person, being a person who is carrying on an equivalent business, at that other person’s request, a copy of the evidence, documents, data and information referred to in Article 15(4B)(f).”.