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Failure to prevent money laundering offence - Jersey is the first common law jurisdiction to introduce such an offence

28/04/2022

Jersey continues its commitment to protecting the international financial system from misuse.

On the 27 April, The States Assembly – Jersey's elected parliament unanimously adopted an amendment to the Proceeds of Crime (Jersey) Law 1999 to create a new offence of –

  • Failure to prevent money laundering and terrorist financing.

The amendment is as follows

  • PROCEEDS OF CRIME (AMENDMENT No. 7) (JERSEY) LAW 202-
  • New Article 35A (offence of failure to prevent money laundering) inserted the Proceeds of Crime (Jersey) Law 1999.

New Article 35A (offence of failure to prevent money laundering) inserted

35A Failure to prevent money laundering

(1)     A financial services business (B) commits an offence, and is liable –

(a)     If B is a body corporate, to a fine; or

(b)     If B is not a body corporate, to imprisonment for a term not exceeding 2 years or to a fine or to both,

if a person is engaged in money laundering when acting in the capacity of a person associated with B.

(2)     It is a defence for B to prove that when the money laundering occurred B adequately maintained and applied prevention procedures in relation to the activities of              the person associated with B.

(3)     A person is engaged in money laundering if the person engages in conduct which constitutes money laundering, whether or not the person has been convicted of             an offence in relation to that conduct.

(4)     A person acts in the capacity of a person associated with B if that person is –

(a)     an employee of B who is acting in the capacity of an employee;

(b)     an agent of B (other than an employee) who is acting in the capacity of an agent;

(c)     any other person who performs services for or on behalf of B who is acting in the capacity of a person performing such services; or

(d)     a customer of B, or an agent of a customer of B, in relation to any service performed by or on behalf of B.

(5)     In paragraph (2) “prevention procedures” means procedures designed to prevent persons acting in the capacity of a person associated with B being engaged in                 money laundering.

(6)     In determining whether B has adequately maintained and applied prevention procedures in relation to the activities of the person associated with B, the Court –

(a)     may take account of any relevant Code of Practice or guidance that applies to B and is issued by the supervisory body exercising supervisory functions in                          respect of B; or

(b)     if no such Code of Practice or guidance applies, may take into account any relevant Code of Practice or guidance that is issued by another supervisory body;                    or

(c)     if there is no such relevant Code of Practice or guidance, may take account of any other relevant guidance issued by a body that is representative of B or any                    supervised business that is carried on by B.

(7)     For the purposes of paragraph (4)(c) the question whether or not the person is a person who performs services for or on behalf of B is to be determined by                      reference to all the relevant circumstances and not merely by reference to the nature of the relationship between that person and B.

(8)     In paragraph (4)(d) “customer” has the same meaning as in Schedule 3.

(9)     For the purposes of paragraph (6), “Code of Practice”, “supervised business”, “supervisory body” and “supervisory functions” have the same meaning as in                       the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008.”.

https://www.jerseylaw.je/laws/pending/Pages/ProceedsofCrime(AmendmentNo.7)Law202-_ADOPTED.aspx

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