JFSC Changes to AML/CFT Handbook on CDD legal persons and arrangements

The JFSC is making changes to the AML/CFT Handbooks due to Financial Action Task Force (FATF) Recommendations and Industry feedback to its consultation paper.  These changes will come into effect on 31st May 2021, where they will publish the final wording of the AML Handbooks.

Concerning Customer Due Diligence and certain legal persons and arrangements, changes will demonstrate full implementation with international FATF standards

FATF Recommendation 10 – Customer due diligence

The Interpretive Note to Recommendation 10 states that for customers that are legal persons or arrangements, the financial institution should be required to identify the customer and verify its identity through the following information …..

• The powers that regulate and bind the legal person or arrangement, as well as
• The names of the persons having a senior management position in the legal person or arrangement.

The guidance in section 4 of the AML/CFT Handbooks will change in the following places: (NB paragraph numbers refer to the Main Handbook)

Section 4.2 Obtaining evidence of identity – Legal arrangement that is a trust

1. Section 4.2 Obtaining evidence of identity – Legal arrangement that is a trust
   • The guidance at paragraph 86 will be amended to refer to
     1. the evidence of the nature of a trustee’s powers rather than a trustee’s duties.
2. Section 4.3 Finding out identity – Legal arrangement that is a limited partnership
   • The guidance at paragraph 87 will be updated by amending the last bullet point to read
     1. “the names of all general partners and those limited partners that participate in management (if any)”.
3. Section 4.4 Obtaining evidence of identity – Legal arrangement that is a limited partnership
   • The guidance at paragraph 98 will be amended to refer to a relevant person obtaining, in every case,
     1. the partnership agreement or certified copy of such document as one of its sources of evidence.
4. Section 5.1 Finding out identity – Legal person that is a company.
   • The guidance at paragraph 123 will be updated by amending the last bullet point to read
     1. “The names of all persons having a senior management position”, and
     2. Additional explanatory wording will be added to explain that individuals having a senior management position means those who have and exercise strategic decision-taking powers or who have and exercise executive control.
     3. This wording is consistent with that found at paragraph 128.
   • Consequential amendments will be made at paragraphs 129 and 136 to
     1. Replace the word ‘director/s’ with
     2. ‘Person/s having a senior management position’. (Further guidance to reflect obligations in relation to a LLC will be added in due course).
5. Section 5.2 Obtaining evidence of identity - Legal person that is a company
   • The guidance at paragraph 134 will be amended to refer to a relevant person obtaining, in every case,
     1. The Memorandum and Articles of Association (or equivalent) or certified copy of such documents as one of its sources of evidence.
6. Section 5.4 Obtaining evidence of identity – Legal person that is a foundation
   • The guidance at paragraph 146 will be amended to refer to a relevant person obtaining, in every case,
     1. The foundation charter (or equivalent) or certified copy of such document as one of its sources of evidence.
7. Section 5.5 Finding out identity – Legal person that is a partnership
   • The guidance at paragraph 149 will be updated by amending the last bullet point to read
     1. “The names of all partners, except any limited partners that do not participate in management”.
8. Section 5.6 Obtaining evidence of identity – Legal person that is a partnership
   • The guidance at paragraph 158 will be amended to refer to a relevant person obtaining, in every case,
     1. The partnership agreement or certified copy of such document as one of its sources of evidence.

You can find full details in the JFSC

• Consultation on proposals to revise the AML/CFT Handbooks No 3 2020 - Issued:28 May 2020 = https://www.jerseyfsc.org/industry/consultations/consultation-aml-cft-handbook-revisions-no3-2020/
• consultation feedback paper. = https://www.jerseyfsc.org/industry/consultations/consultation-feedback-paper-on-aml-handbook-revisions-2020/