The JFSC overhauls its higher risk country lists [the D2 lists]

On the 1 February 2022, the JFSC announced that their Appendix D2* LIST [Countries and territories identified as presenting higher risks] has had an overhaul as can be shown in the following diagram and link 01022022-appendix-d2.pdf (jerseyfsc.org)

The changes they have made include:

• Addition of data including replacing obsolete Sources and reflecting the FATF 4th round mutual evaluations results
• Addition of indicators (red flags) to distinguish between countries which are higher risk for ML and those that are higher risk for TF, Sanctions and PF. This is to help support you with your business risk assessments for each of these risks categories
• Highlighting where a country is identified as presenting a higher risk.

The JFSC tell us

1. Countries, territories, and areas listed under Sources 1 and 2 are also to be treated as being non-compliant with FATF Recommendations for the purpose of
• Article 17A of the Money Laundering (Jersey) Order 2008. https://www.jerseylaw.je/laws/current/Pages/08.780.30.aspx

3.Source 6 will only capture financial sanctions regimes that relate to a country, territory, or area, i.e., it will not capture thematic sanctions regimes.

• For a full list of financial sanctions regimes applicable in Jersey see Sanctions by country and category. https://www.jerseyfsc.org/industry/international-co-operation/sanctions/sanctions-by-country-and-category/

4.The risk indicators (red flags) are populated from the following sources:

1. The Higher Risk/Money Laundering-list (Column B) is based on Sources 1, 2, 3, 4, 7, 8, 9, 10 and 11
2. The Higher Risk/Financing of Terrorism-list (Column C) is based on Sources 1, 2, 3, 4, 5, 8, 9, 10 and 13
3. The Higher Risk/Financial Sanctions-list (Column D) is based on Source 6 only
4. The Higher Risk/Financing of Proliferation of Weapons of Mass Destruction-list (Column E) is based on Sources 1 and 12.

The JFSC also add a risk warning

• Countries, territories, and areas covered by each Source may not be consistent when one Source is compared with another Source. Equally, the information may be incomplete or out of date.
• The JFSC do not accept responsibility for the findings and conclusions of these sources.
• Relevant persons are expected to exercise judgement in relation to how they interpret and use the Sources and should reach and document their own consideration and conclusions on risk.
• See Sections 3, 6 and 7 of the AML/CFT Handbook for further guidance. https://www.jerseyfsc.org/industry/financial-crime/aml-cft-handbooks/

*Appendix D2 of the Handbook for the prevention and detection of money laundering and the countering of terrorism financing provides details of countries, territories and areas that have been identified by reliable and independent third-party sources as presenting a higher risk of:

• Money laundering;
• Financing of terrorism and;
• Financing of proliferation of weapons of mass destruction.

SOURCES

• https://www.jerseyfsc.org/news-and-events/updated-appendix-d2-to-support-industry/

• https://www.jerseyfsc.org/industry/financial-crime/aml-cft-handbooks/appendix-d2-countries-and-territories-identified-as-presenting-higher-risks/