Ask Mat: "Im a Jersey lawyer and act for the vendor. Do I really need to do AML/CTF/CPF checks on the buyer?"

This week's Ask Mat question:

• "I am a newly formed Jersey law firm, and I have been told that I should do AML/CTF/CPF (including sanctions) on a buyer even though I act for the vendor.
• My last firm DID NOT do this.
• Should I?"

Mat Says

• Good question, and one that catches out a lot of newly formed practices  because the honest answer isn't "yes" or "no."
• It's "it depends which part of the framework you're asking about," and conflating the two is exactly how firms end up either over-engineering their files or leaving a real gap.
• Let's take it apart properly.

The short answer

• No, in a standard conveyance where you act solely for the vendor, neither the Money Laundering (Jersey) Order 2008 nor Section 20 of the JFSC Handbook requires full customer due diligence on the buyer as if they were your own client.
• Yes, you do need to sanctions-screen the buyer.
• And somewhere in between, you need a documented, risk-based level of scrutiny over the money itself, which isn't CDD, but isn't nothing either. Your last firm's approach of doing nothing at all was riskier than the other position, even though it never caused a problem.

Why CDD doesn't reach the buyer

• Customer due diligence under Article 13 of the Money Laundering (Jersey) Order 2008 (MLO) is a relational concept. It only bites where you have a "business relationship" or "one-off transaction" with someone.
• Both of those terms are, in turn, defined by reference to a "customer", and Article 1 MLO's definition of "customer" is famously thin: "customer means a person."
• The real limiting work is done by the requirement that you actually be carrying out a transaction, or forming a relationship, for that person.
• A vendor's lawyer isn't doing anything for the buyer.
• They haven't instructed you,
• you're not advising them, and
• you're not carrying out the conveyance on their behalf.
• The buyer's completion funds arriving in your client account are the mechanical result of your actual client, the vendor, completing a sale.
• The buyer's own lawyer has (or should have) done full CDD on the buyer as their customer.
• That's the structural logic of the regime.
• Each firm owns CDD on its own client, and
• The framework allocates primary responsibility for buyer CDD to the professional who actually has the buyer as their customer: the buyer's own lawyer.
• Contrast this with real estate agents.
• COP176 of the JFSC Handbook explicitly requires estate agents to apply CDD to both purchaser and vendor, following FATF Recommendation 22.
• That's a deliberate, sector-specific carve-out, and Section 20 of the Handbook (Lawyers) has no equivalent provision — it doesn't extend to lawyers.
• So if your new firm's instruction is to run due diligence on the buyer as a matter of course, that's not something COP176, the MLO, or Section 20 actually requires of you.
• It doesn't necessarily mean the instruction is wrong, though — as you'll see below, there's often a narrower, correct reason behind it.

But sanctions are a genuinely different animal.

• This is the part that trips people up, because it's easy to assume "no CDD" means "no checks at all." It doesn't.
• Sanctions prohibitions under the Sanctions and Asset-Freezing (Jersey) Law 2019 aren't relationship-based; they're asset-based.
• It's a criminal offence to deal with funds belonging to a designated person, or to make funds available to one, directly or indirectly, regardless of whether that person is your customer.
• The Handbook's own Code of Practice makes this explicit:
• COP64: A supervised person must undertake sanctions screening for all business relationships and one-off transactions. This screening must include the customer, any Beneficial owners and/or controllers and other associated parties.
• A buyer providing completion funds is properly treated as an "associated party" for COP64 purposes, a prudent and defensible reading given the asset-based nature of the sanctions prohibitions, even though the buyer is not your customer.
• So: screen the buyer and, where relevant, the beneficial owners and controllers of a corporate buyer, before accepting or releasing funds. This applies whether or not you'd ever CDD them, and it isn't optional or discretionary; it's a standing obligation on every business relationship and on every one-off transaction you touch.
• Don't confuse the two regimes:
• The absence of a CDD obligation on the buyer does not remove your separate sanctions obligations.
• Worth flagging too:
• The mandatory reporting duty under Article 32 of the Sanctions and Asset-Freezing Law applies to a "relevant financial institution," which is defined by reference to "financial services business" under Schedule 2 of the Proceeds of Crime Law, and legal services fall squarely within that definition.
• So, this isn't just a Handbook expectation; it's a standalone statutory reporting obligation that sits alongside your ordinary SAR duties.

The bit in the middle: proportionate scrutiny, not CDD

Even setting sanctions aside, three separate mechanisms mean the buyer's money doesn't pass through your hands entirely unexamined:

• Ongoing monitoring of the vendor relationship (Article 3(3)(a) MLO)
• Requires you to scrutinise transactions within that relationship for consistency with what you know about your client  "including, where necessary, the source of the funds."
• Although the payment originates from the buyer, it forms part of the transaction being undertaken for the vendor.
• Please consider this part of your ongoing monitoring of that relationship.
• Article 11 MLO's general systems-and-controls duty
• Requires policies for identifying and scrutinising complex or unusually large transactions, and activity with no apparent economic or lawful purpose.
• This requirement attaches to your business generally, not to a specific customer relationship.
• Given the Handbook itself states plainly that conveyancing is "the function most utilised by criminal groups," a firm with zero process for double-checking incoming funds would be hard-pressed to argue its Article 11 policies are appropriate to its risk profile.
• The universal suspicion-based reporting duty
• Under the Proceeds of Crime Law applies to anyone who forms knowledge or suspicion of money laundering in the course of business, client or not.
• If something about the buyer's funds looks wrong, the fact that you never owed the buyer a CDD duty is no defence to failing to report a suspicion you actually held.

None of this creates a CDD obligation on the buyer.

• It does, however, require you to be able to demonstrate if ever asked by the JFSC or a court that you applied proportionate scrutiny consistent with your Article 11 systems and controls and your ongoing monitoring of the vendor relationship: that the money came via the buyer's own regulated conveyancer's client account, that the amount matched the registered contract, and that nothing about the pattern was inconsistent with a normal sale.
• Where completion funds are received from the buyer's regulated conveyancer's client account, that fact will often be a relevant risk-mitigating factor.
• Still, it does not remove the need to consider whether anything about the transaction appears unusual or suspicious.

What I'd tell a newly formed firm

• Your last firm's practice of doing nothing on the buyer side wasn't unlawful on the CDD point, but it was thin elsewhere and left the firm exposed if anything went wrong.
• Your new firm's instruction to "do AML/CTF/CPF on the buyer" may be aiming for the right outcome but using the wrong label.
• What you actually need is:
• Sanctions-screen the buyer
• And, where relevant, the beneficial owners and controllers of a corporate buyer, before accepting or releasing funds non-negotiable, COP64.
• Do not pay away funds or permit final agreements to be signed
• Until evidence of identity of your customer, the vendor, has been obtained (COP169).
• Build a documented, risk-based assessment (sanity check – more below)
• Into your file on every conveyance, as the practical evidence of your Article 11 systems and controls: confirm funds arrive via the buyer's own lawyer's client account, that the amount reconciles with the contract, and where they don't, record why and what additional steps you took.
• Stay alert to suspicion and
• treat that duty as running to anyone who touches the transaction, not just your own client.
• What you now have:-
• A defensible, proportionate position — it sits between your last firm's 'do nothing' approach and a full COP176-style CDD file on someone you were never instructed by.

Where does the sanity check actually live? Your three risk assessments

• Please don't treat “What I'd tell a newly formed firm" above as a loose checklist stapled to the file; it should sit inside the risk assessment architecture the Handbook already requires you to have.
• Section 20.3 sets out three levels for a lawyer's risk assessment, and each one has a job to do here:
• Business Risk Assessment (BRA):
• This is where you set policy, not where you assess an individual transaction.
• Your BRA should name conveyancing as an elevated-risk service line for the firm, on the strength of the Handbook's own view that it is "the function most utilised by criminal groups."
• It should record the type of control the firm applies as standard: that completion funds are expected to arrive via the buyer's own regulated conveyancer's client account, that a value-based risk trigger applies (the Handbook's own worked example is conveyancing matters of £3,000,000 or more), and what happens when a file departs from that pattern.
• If your BRA is silent on conveyancing risk, that's the gap a JFSC examination is most likely to find, not a missing CDD file on the buyer.
• Customer Risk Assessment (CRA):
• This is about the vendor, your actual client.
• The buyer doesn't get a CRA of their own, but the transaction should inform the CRA you hold on the vendor: does the expected sale value, the buyer's identity as it appears in the contract, and the funding route look consistent with what you know about your client?
• A CRA that was set at take-on and never revisited in light of the specific sale is doing half its job.
• Matter Risk Assessment (MRA):
• This is where point 3 actually gets operationalised, file by file.
• On each conveyance: record who the buyer is (per the registered contract), confirm the funding route is the buyer's own regulated lawyer's client account, reconcile the amount against the contract price, and note, even briefly, that nothing about the pattern looked inconsistent.
• Where completion funds arrive other than via the buyer's own regulated lawyer's client account, please record why and what additional steps were taken.
• This departure from the expected pattern is exactly the kind of thing Article 11 asks you to consider. That short paragraph is what turns "we did think about this" into evidence you can produce if the JFSC or a court ever asks.
• The three feed each other:
• What the MRA flags on individual files should inform the CRA on the client relationship, and patterns across CRAs and MRAs should periodically be fed back up into the BRA.
• That loop, not a standalone buyer-CDD exercise, is what a genuinely risk-based approach to this question looks like.

I hope all the above helps and makes sense; do come back if you need some further assistance.

Warning: This article reflects Comsure's interpretation of the legislation and JFSC AML/CFT/CPF Handbook (effective as at 30 June 2026) as at the date of publication. It is provided for general guidance only and does not constitute legal advice. The Handbook itself is a Code of Practice, not primary legislation, so firms should verify against the current legislation, check for any subsequent JFSC thematic findings or updated guidance on conveyancing or sanctions screening, and take independent advice on their own facts.

Got a question for Ask Mat? Please get in touch with the Comsure team; chances are, if you're asking it, someone else is too.

References

1. Money Laundering (Jersey) Order 2008  Article 1 (Interpretation), Article 3 (Meaning of "customer due diligence measures"), Article 4 (Meaning of "one-off transaction"), Article 11 (Policies, procedures and training), Article 13 (Application and timing of customer due diligence measures), Article 18(6) (Further exemptions).

https://www.jerseylaw.je/laws/current/ro_20_2008

2. JFSC AML/CFT/CPF Handbook effective as at 30 June 2026 (readers should check jerseyfsc.org for any subsequent updates)  COP64, COP169, COP176; Section 6.7.4.2 (Holding of funds); Section 20.3 (Risk Assessment  Business Risk Assessment, Customer Risk Assessment, Matter Risk Assessment); Section 20.3.1.6 (Criminal use of conveyancing services); Glossary ("customer(s)").

https://www.jerseyfsc.org/industry/financial-crime/amlcftcpf-handbooks/amlcftcpf-handbook/

3. Sanctions and Asset-Freezing (Jersey) Law 2019  Article 1 (Interpretation, "relevant financial institution"), Article 32 (Reporting obligations).

https://www.jerseylaw.je/laws/current/l_2_2019

4. Proceeds of Crime (Jersey) Law 1999  Schedule 2 (Financial services business, incorporating legal services).

https://www.jerseylaw.je/laws/current/l_8_1999

5. Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008  Article 22(6) (Legal status of Codes of Practice).

https://www.jerseylaw.je/laws/current/l_32_2008

Further Reading

JFSC  Sanctions and Asset-Freezing Law overview:

https://www.jerseyfsc.org/industry/international-co-operation/sanctions/sanctions-and-asset-freezing-law/

Government of Jersey  Financial Sanctions Notices:

https://www.gov.je/Industry/Finance/FinancialCrime/Sanctions/pages/internationalsanctions.aspx

JFSC  AML/CFT/CPF legislation page (full list of primary and subordinate legislation):

https://www.jerseyfsc.org/industry/financial-crime/amlcftcpf-legislation/