JERSEY gets tough following MONEYVALS 2015 criticism

If you were not convinced about MONEYVALS criticisms about Jersey's AML enforcement in 2015 - the LGL Trustees Limited (LGL) £550,000 fine (+£50k costs) is a wake-up call........

Solicitor General Matthew Jowitt QC commented:

• "Proper compliance by financial service providers with the Money Laundering Order is a key defence against abuse of the Island's finance industry by criminals and an important aspect of Jersey's international commitment to combatting money laundering. The decision to prosecute LGL for serious compliance failures and seek a significant fine reflect the gravity with which such breaches of the law are viewed."

Attorney General Mark Temple QC commented:

• "The sentence today represents the successful culmination of a complex investigation by teams from the Financial Crimes Unit of the States of Jersey Police and the Economic Crime and Confiscation Unit of the Law Officers' Department, all of whom I thank for their work. It demonstrates our combined commitment to protect the Island from financial crime."

THE BACKSTORY

1. On Friday, 19 February 2021, the Royal Court imposed a fine of £550,000 on LGL Trustees Limited (LGL) and awarded costs of £50,000 for failing to comply with the requirements of the Money Laundering (Jersey) Order 2008.
2. LGL had pleaded guilty on 4 December 2020 to two related offences under Article 37(4) of the Proceeds of Crime (Jersey) Law 1999 for breaches of the Money Laundering Order.
3. The offence contained within Count 1 concerned a failure by LGL to recognise and respond to the risk that a structure it set up and administered in Jersey might be used to embezzle funds from the public purse of an African country for the benefit of its rulers.
4. The offence contained within Count 2 relates to LGL's failure to properly identify and verify the controllers of one of its customers, namely the board members of the National Bank of Angola. Having failed to obtain the information at the outset of the business relationship as they were required to, they then failed to remedy this for another six years which was a further and separate breach of the ongoing monitoring requirements of the Money Laundering Order.
5. Whilst there is no suggestion that any of the funds provided by Angola were of suspicious origin or that the investments into which the funds were placed were themselves suspicious, LGL failed to identify the real risks of money laundering that were apparent. In doing so LGL placed themselves at risk of being involved in the diversion of tens millions of dollars of public funds of one of the poorest countries in the world, to its rulers, their relatives and associates.

https://www.gov.je/news/2021/pages/TrustCompanyFined.aspx