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IMF’s findings reflect Jersey’s robust anti-money laundering regime

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Ian Strang, managing partner of Voisin and Robert Christensen, managing director of Volaw review the conclusions of the IMF’s recent assessment of

Ian Strang, managing partner of Voisin and Robert Christensen, managing director of Volaw review the conclusions of the IMF’s recent assessment of Jersey’s regulatory framework for combating money laundering and terrorism financing.

The International Monetary Fund has just published its assessment of Jersey’s anti-money laundering and combating the financing of terrorism regime. The assessment, based on Financial Action Task Force’s Forty Recommendations of 2003 and the Nine Special Recommendations on Terrorist Financing in 2001, concluded that Jersey has put in place a comprehensive and robust legal framework with a high level of compliance with almost all aspects of the FATF recommendations.

The report concluded that Jersey complies with or largely complies with 44 of the 49 FATF recommendations and 15 of the 16 ‘core’ and ‘key’ recommendations. This compares favourably with Singapore and the US, which comply with 43, and Belgium, which complies with 42, with no other jurisdiction complying with 40 or more.

The IMF reported that both money laundering and the financing of terrorism are criminalised largely in line with the international standard and Jersey has implemented the provisions effectively. Further, the Joint Financial Crime Unit was identified as carrying out the role of a financial intelligence unit effectively and has benefited from an increase in its resources.

Jersey has adopted a risk-based approach to anti-money laundering and combating the financing of terrorism at all levels – in determining the scope of requirements, in designing implementation measures and in supervision. The report documents the high level of awareness of AML/CFT risks and requirements across the financial sector as well as Jersey’s high level of compliance with the FATF recommendations on preventive measures. Overall, the Jersey Financial Services Commission is described as an effective regulator and supervisor for financial institutions and trust company businesses in Jersey.

Whist compliance with the Objectives and Principles of Securities Regulation issued by the International Organisation of Securities Commissions was not assessed during the visit, the IMF report states that it is evident that the regulation of investment business and in particular funds services business has been “significantly strengthened” since 2003 and that the trust and company business in Jersey has a “comprehensive” regulatory and supervisory framework.

The IMF’s findings reflect favourably on the island and will provide further evidence to external bodies and jurisdictions that Jersey has positioned itself in the top division of international finance centres. With the pending release of the revised EU AIFM Directive, the report should provide a foundation for recognising Jersey’s regulatory equivalence to its European neighbours.

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