Jersey Tables Risk-Based Approach On Money Laundering

Ian Allison

11 May 2006

The Jersey Financial Services Commission has published a consultation paper on the draft Handbook for the Prevention and Detection of Money Laundering and Terrorist Financing. The aim of the consultation paper is to bring Jersey up to speed with recommendations on anti-money laundering set out within the revised Financial Action Task Force recommendations. The draft Money Laundering Order and Handbook proposes a new risk-based approach to customer due diligence, that permits reduced or simplified measures in the case of lower risk relationships. David Carse, director general of the Jersey Financial Services Commission, said in a statement: “The proposals highlight the importance of a risk based approach to combating money laundering and terrorist financing, which is intended to focus resources on higher risk customers, whilst at the same time easing the burden on other customers.” An emphasis on customer due diligence measures will reduce the onus placed on identification and verification of identity, in particular with the ongoing monitoring of unusual, complex, and higher risk activity and transactions. There will also be scope for greater reliance on a single document to verify identity in lower risk circumstances, for example, a passport. In the case of a lower risk minor, whose parent or guardian is unable to provide standard documentation to verify the minor’s identity, identity may be verified through use of the minor’s birth certificate. As well as addressing corporate governance and the responsibilities of senior management, the paper extends FATF recommendations to non-financial businesses and professions, including certain activities conducted by lawyers, accountants and estate agents, and the sale of high value goods for cash. The proposals are contained within two documents, a draft Money Laundering Order 2006, “draft Money Laundering Order” to replace the existing Money Laundering Order 1999, and a draft Handbook for the Prevention and Detection of Money Laundering and Terrorist Financing, to replace the existing Guidance Notes for the Finance Sector. There will also be a set of seminars on the consultation paper’s requirements. The programme of events is as follows: Part One: 15, 16 and 17 May 2006 – Seminars presenting an overview of the proposals Part Two: Week beginning 19 June 2006 – Discussion fora focusing on key proposals Part Three: 14 August 2006 – Consultation response period closes Part Four: December 2006 and January 2007 – Training on the new requirements