UPDATED JFSC AML/CFT/CPF HANDBOOK NOW EXPECTED 31 MAY 2026

On 27 November 2025, the JFSC has:-

• Outlined its responses to Consultation Paper No. 4 2025 in its  "Feedback on Enhancements to the AML/CFT/CPF Handbook,"
• Outlined its new rules on criminal background checks
• Issued a follow-on consultation on the topic of “complex structures"
• Deferred PEPs changes pending 2026 Government work/FCA guidance review (communicated first half of  2026).

It is now the intention to have an updated AML/CTF/CPF handbook, Effective on 31 May 2026.

Below are three briefing summaries of the above matters

PART 1 - THE FEEDBACK TO CONSULTATION PAPER NO. 4 2025

• The feedback to consultation paper no. 4 2025
• Details industry feedback on proposed updates to the Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) Handbook, aimed at addressing seven MONEYVAL-recommended actions from Jersey's 2022 Mutual Evaluation Report.
• Highlights  Key areas include enhanced due diligence for complex structures and politically exposed persons (PEPs), periodic reviews for high-risk customers, beneficial ownership and control through other means, sanctions indirect links, and sector-specific guidance for designated non-financial businesses and professions (DNFBPs) and virtual asset service providers (VASPs).
• Highlights themes such as requests for deferred implementation, proportionality in risk-based guidance, concerns over operational burdens (e.g., identifying social connections via social media), clearer examples, support for a standalone Prescribed Non-Profit Organisations (NPO) CFT Handbook, and suggestions for better formatting and tools like mapping documents and webinars.
• Read more here
• https://www.jerseyfsc.org/industry/consultations/feedback-on-enhancements-to-the-amlcftcpf-handbook/
• https://www.jerseyfsc.org/media/bzlk5pio/feedback-on-enhancements-to-the-aml-cft-cpf-handbook.pdf
• See below PART 1 for a summary

PART 2 - COMPLEX STRUCTURES - "Follow-on consultation: AML/CFT/CPF Handbook enhancements complex structures" (No. 8 2025). Issue Date: 27 November 2025.

In addition to the above feedback, the JFSC are seeking additional input on complex structures.

• Purpose: This is a targeted follow-on consultation paper (CP) addressing industry feedback from a June 2025 consultation on the AML/CFT/CPF Handbook. It focuses on revising guidance and codes for handling "complex structures" in customer due diligence (CDD) processes, in response to MONEYVAL's Mutual Evaluation Report (MER) recommendations. The revisions aim to promote a risk-based, proportionate approach while improving Handbook usability.
• Background: MONEYVAL identified gaps in Jersey's framework for detecting and preventing money laundering (AML), countering terrorist financing (CFT), and countering proliferation financing (CPF). Initial proposals treated complex structures as inherently high-risk; however, following industry input (from 18 respondents and workshops, especially in the funds sector) highlighted that many such structures are common and not necessarily risky. This led to a revised approach to avoid disproportionate measures such as mandatory enhanced monitoring.
• Feedback is invited by Thursday, 12 February 2026. 
• Read more here
• Read the JFCS  follow-on consultation: AML/CFT/CPF Handbook enhancements for complex structures. 
• See below PART 2 for a summary

PART 3 - FEEDBACK ON ENHANCEMENTS TO CRIMINAL BACKGROUND CHECKS

In addition to the above, the JFSC published its policy position on criminal background checks for Principal Persons (PPs) and Key Persons (KPs). We consulted on this in Consultation Paper No 1 2025 (the CP), published on 29 January 2025. 

• Given the extent of the feedback received, the JFSC are issuing this paper a few months later than initially envisaged. The additional engagement required the JFSC to refine its original proposals and adopt a revised approach to reflect stakeholder input, while maintaining its commitment to a proportionate and effective regime.
• Key changes include the removal of the three-year rolling refresh requirement and placing the responsibility on Supervised Persons, 1, to collect and maintain records of checks performed.
• The full details of the revised approach are covered throughout the remainder of this paper and the appendices.
• https://www.jerseyfsc.org/media/0rpnaady/feedback-on-enhancements-to-criminal-background-checks.pdf
• See below PART 3 for a summary

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SUMMARIES

Part 1

The following is a summary of the industry feedback and JFSC response to Consultation Paper No. 4 2025.

Summary of Consultation Feedback

Question 1: Control through other means (Section 4.6)

• Industry Response: 19 respondents welcomed guidance but expressed concerns about it becoming a prescriptive checklist; requested more examples (e.g., lenders, family influence), clarity on control vs. influence/insignificant control, and practical steps for identification; highlighted regulatory/operational impacts like increased burden and alignment with FATF/UK standards.
• JFSC Response: Refined wording to emphasise risk-based judgment and illustrative examples; added examples like family influence, lenders (only if legally exercisable), enforcers/protectors; confirmed control must be significant; removed investment advisers as an example; clarified primary sources beyond client disclosure; framed guidance to support compliance without unnecessary workload.

Question 2: Ongoing monitoring (Section 6)

• Industry Response: 19 respondents welcomed guidance but requested wording amendments, trigger event definitions, termination clarity, SAR links, and more examples for event-driven reviews.
• JFSC Response: Made wording changes for clarity (e.g., 'ascertain' to 'verify', added 'up to current standards'); defined trigger events; incorporated examples like changes to source of wealth/risk profile or trust beneficiaries; clarified termination expectations by linking to Section 9.5.2; added SAR reference.

Question 3: Ongoing monitoring - Specific feedback on periodic reviews and enhanced monitoring for higher-risk customers (Section 6, continued)

• Industry Response: 18 respondents welcomed guidance but requested wording amendments (e.g., remove 'best practice') and more prescriptive review cycles.
• JFSC Response: Removed 'best practice' references and minor wording suggestions; will consider illustrative review cycles in future updates.

Question 4: Sanctions indirect links (Section 6.5.3)

• Industry Response: Concerns about screening all link types (political, financial, family, social, business) as excessive/costly/ethically problematic; opposed social media as unreliable; wanted clarity on expectations, acknowledgement of screening tool limits, and practical examples (e.g., complex ownership, underlying activities).
• JFSC Response: Recognised challenges; clarified guidance highlights link types illustratively, not prescriptively; reiterated statutory requirements; noted screening tools suffice for most; incorporated examples of links identified during relationships; will reconsider social media in PEP response.

Question 5: PEPs and social/professional close associates of PEPs (Section 7.6)

• Industry Response: Concerns about practicality/reliability/proportionality of identifying close associates; viewed social/professional links as expanding MLO definition, increasing burden; highlighted social media issues (unreliable, scope ambiguity, cybersecurity, data protection); suggested 'open-source media'; requested clarity on family/domestic PEPs, declassification, Guernsey status; challenges in Southeast Asia/China; ambiguous scenarios like board membership.
• JFSC Response: Noted MONEYVAL action points; retained EDD for all foreign PEPs; clarified domestic PEPs require no enhanced measures unless higher risk; emphasised risk-based approach beyond client disclosure; acknowledged social media changes since 2013; deferring changes to 2026 for review of FCA guidance and potential MLO amendments.

Question 6: Complex structures (Section 7.8)

• Industry Response: 18 respondents welcomed guidance but requested wording amendments (remove 'best practice') and prescriptive review cycles; argued complex structures are not automatically higher risk; perceived EDD as leading to enhanced monitoring/oversight burdens.
• JFSC Response: Engaged with the funds industry; objective is a proportionate, risk-based approach; decided to revise proposals requiring further input; deferring for follow-on consultation.

Question 7: VASPs overview (Section 16)

• Industry Response: 19 respondents welcomed guidance; one minor request to update 'KYC' to 'CDD'.
• JFSC Response: Updated all 'KYC' to 'CDD'.

Question 8: DNFBP overview (Section 17)

• Industry Response: Few comments; one suggested ordering to reflect Section 2.
• JFSC Response: Reordered to reflect Section 2.

Question 9: DNFBP sections (excluding TCSPs) (Sections 18-21)

• Industry Response: Two respondents suggested recognising UK commercial property as low risk.
• JFSC Response: Declined, as UK assessments do not classify it as low risk.

Question 10: Prescribed NPO CFT Handbook

• Industry Response: All eight respondents supported a standalone handbook; noted minor inconvenience for TCSPs/TCBs, but benefits outweigh.
• JFSC Response: Developed handbook with sector engagement; made minor formatting amendments.

Question 11: General comments on updates

• Industry Response: Highlighted formatting errors (e.g., exemptions tables); feedback on Sections 4 (identification/verification) and 8 (exemptions); wide, unrelated feedback.
• JFSC Response: Corrected formatting; revised Section 4 to clarify that former names are not mandatory and outsourcing expectations; adjusted Section 8 for risk-mitigating conditions; added unrelated feedback to future 'wish list'.

Question 12.1: Any other comments in relation to these proposals

• Industry Response: Concerns on proportionality (e.g., complex structures/PEPs burden); clearer tracked changes/formatting; separate explanatory content/appendices; better engagement/phased rollouts; guidance seen as mandatory; questioned full MONEYVAL implementation impacting competitiveness; technical suggestions (e.g., AI use, define 'financial crime', consolidate Codes).
• JFSC Response: Deferring PEPs/complex structures; reviewing Handbook usability with technology; engaged extensively; reiterated guidance is not mandatory.

Question 12.2: Any other comments (wider feedback on Handbook)

• Industry Response: Clearer separation of requirements/guidance; restructure/consolidate; inconsistencies with Companies Registry; proportionate domestic approaches; clarify digital ID, deputy MLRO, former names; more pre-consultation engagement/supervision clarity; streamline for competitiveness.
• JFSC Response: Committed to streamlined/user-friendly Handbook; maintains request list for prioritisation.

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PART 2

"Follow-on consultation: AML/CFT/CPF Handbook enhancements complex structures" (No. 8 2025). Issue Date: 27 November 2025.

• Purpose: This is a targeted follow-on consultation paper (CP) addressing industry feedback from a June 2025 consultation on the AML/CFT/CPF Handbook. It focuses on revising guidance and codes for handling "complex structures" in customer due diligence (CDD) processes, in response to MONEYVAL's Mutual Evaluation Report (MER) recommendations. The revisions aim to promote a risk-based, proportionate approach while improving Handbook usability.
• Background: MONEYVAL identified gaps in Jersey's framework for detecting and preventing money laundering (AML), countering terrorist financing (CFT), and countering proliferation financing (CPF). Initial proposals treated complex structures as inherently high-risk. However, following industry input (from 18 respondents and workshops, especially in the funds sector) highlighted that many such structures are common and not necessarily risky. This led to a revised approach to avoid disproportionate measures such as mandatory enhanced monitoring.

Key Proposals

The JFSC proposes splitting the complex structures guidance into two sections of the Handbook:

• Section 4 (Standard CDD): Guidance on identifying complex structures and applying mitigating measures when they are not assessed as high-risk. This includes practical steps to evaluate opacity or lack of rationale without automatically escalating to enhanced measures.
• Section 7 (Enhanced CDD): A new code and guidance for high-risk scenarios where, after standard measures, the structure remains opaque, lacks a legitimate purpose, or contributes to a high-risk customer assessment. Enhanced due diligence (EDD) would then apply, such as senior management oversight and additional monitoring.

Consultation Questions

The CP poses four questions for feedback:

1. Section 4: Does the revised guidance appropriately reflect a risk-based, proportionate approach to identifying and assessing complex structures? Provide examples of challenging structures/scenarios.
2. Section 7: Does the guidance balance MONEYVAL expectations with proportionality? Suggest any additional enhanced measures.
3. Additional Guidance: What detailed guidance would help in consistently identifying and applying EDD to complex structures?
4. Timeframes: Is the proposed timeline (revisions published by 26 March 2026, effective 31 May 2026) sufficient for compliance?

Implications and Recommendations

• Strategic Impact: This promotes a more flexible, risk-based framework, potentially reducing compliance burdens for non-high-risk complex structures (e.g., avoiding unnecessary EDD in 80% of cases, as noted by one respondent). However, firms must review internal CDD processes to align with the split approach.
• Risks: Failure to adapt could lead to non-compliance post-31 May 2026, especially in high-volume sectors like funds.
• Actions for Management:
• Review the draft Handbook sections (tracked/clean versions) referenced in the CP to assess internal impacts.
• Consider submitting feedback, either directly or via JFL, to influence final revisions—focus on practical examples from your operations.
• Assign a team (e.g., Compliance) to monitor updates and prepare for implementation by May 2026, including training on revised CDD/EDD for complex structures.
• If applicable, evaluate any exposure to affected entities (e.g., VASPs or NPOs) and update risk assessments.

Timelines

• Consultation Period: Open until 11:59 pm on Thursday, 12 February 2026 (shorter than standard due to follow-on nature).
• Publication of Feedback and Revisions: By 26 March 2026.
• Effective Date: Handbook updates effective from 31 May 2026.
• Note: This aligns with broader Handbook reforms from the June 2025 consultation.

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Part 3

Management Briefing: JFSC Feedback on Enhancements to Criminal Background Checks

Executive Summary

• The JFSC has finalized enhancements to Criminal Records or Background Checks (CRCs), for Principal Persons (PPs) and Key Persons (KPs) in supervised financial entities, responding to a MONEYVAL Priority Action from Jersey's fifth-round evaluation.
• The original proposals (from Consultation Paper No. 1 2025, published January 29, 2025) were refined based on 37 industry responses, emphasizing proportionality and cost-efficiency.
• Key adjustments include removing the three-year rolling refresh requirement, shifting responsibility for CRCs to Supervised Persons (e.g., our firm), and adopting a risk-based ongoing approach.
• The regime applies to AML/CFT/CPF-supervised entities under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 (SBJL), excluding General Insurance Mediation Businesses (GIMB).
• Implementation includes a transitional period from November 27, 2025, to May 31, 2026, with full effect on May 31, 2026.
• Our organization must update policies, conduct initial checks, and prepare for JFSC compliance assessments by late 2026.

Background

• MONEYVAL Context: Addresses a Priority Action to enhance checks at market entry, changes of control, and for key roles, aligning with FATF Recommendations on AML/CFT/CPF.
• Consultation Overview: The JFSC consulted on enhancing CRCs to prevent criminals or associates from owning, controlling, or influencing Jersey financial services businesses. Proposals included requiring DBS checks (or foreign equivalents) at application, on defined events, and every three years, plus ongoing fit-and-proper reviews.
• Feedback Themes: 37 responses (mostly from banking, trust companies, and sector groups like JCOA, JFA, and JSCCA) supported the principle but raised concerns about burden, practicality, overregulation, and alignment with other jurisdictions.
• Key issues: the three-year refresh was seen as excessive; responsibility should lie with Supervised Persons; data retention conflicted with GDPR; PP definitions were too broad.

Key Amendments to the CRC Regime

Following feedback, the JFSC made proportionate adjustments:

• Scope:
• Applies only to Principal Persons (PPs) and Key Persons (KPs) as defined in SBJL
• (e.g., directors, beneficial owners/controllers ≥10% in legal persons like SLPs/ILPs/LLPs, MLRO, MLCO, compliance officers).
• Excludes
• Passive investors in funds,
• Limited partners,
• Unit holders,
• Vested beneficiaries/settlers in trusts, and
• GIMB entities.
• Requirements:
• CRCs (basic DBS or foreign equivalent) must be obtained for:
• New or additional PP/KP roles.
• Existing licensees on change of control.
• Ongoing basis, using a risk-based approach (frequency based on individual risk profile, role, and entity complexity).
• For first-time JFSC authorisations post-May 31, 2026:
• Checks for current residence and any jurisdiction lived/worked in for ≥6 months in the prior 10 years.
• Certificates must be dated within 6 months of application/subsequent change.
• Responsibility: Shifted to Supervised Persons (our firm) for collecting, reviewing, and maintaining records. Firms  must confirm checks to JFSC on applications/notifications; JFSC may request copies case-by-case and conduct risk-based assessments.
• Record Keeping: No fixed term (e.g. 5-year) retention; comply with data protection laws (e.g., GDPR) for sensitive personal data.
• New Handbook Codes: Updates to Sections 10, 11, and 15 of the enhanced AML/CFT/CPF Handbook (effective May 31, 2026):
• Section 10.6: Ensure fit-and-proper status; obtain CRCs as above; provide documents to JFSC on request; notify material changes.
• Section 11.7: Retain documents per data protection obligations.
• Section 15 (AMLSP-specific): Conduct ongoing checks for appointed KPs, MLCO, MLRO; no routine JFSC notifications unless requested or part of applications.
• No Retrospectivity: For existing PPs/KPs, regime starts May 31, 2026.

Implementation Timeline

• Transitional Period: November 27, 2025 – May 31, 2026. Use this to update policies/procedures and obtain initial CRCs (or equivalents) for existing PPs/KPs.
• Effective Date: May 31, 2026 – Enhanced Handbook and Codes apply.
• Evaluation: JFSC will assess compliance in late 2026 as part of MONEYVAL reporting.

Implications for Our Organization

• Operational Impact: As a Supervised Person (assuming we fall under SBJL, e.g., banking/trust/investment), we must integrate CRCs into HR/onboarding, change-of-control processes, and risk-based reviews. This may increase administrative costs initially but aligns with existing fit-and-proper assessments, avoiding duplication.
• Risks: Non-compliance could lead to JFSC scrutiny, reputational damage, or regulatory action. Data handling must strictly follow GDPR to avoid breaches.
• Opportunities: Enhances our AML/CFT/CPF framework, potentially improving trust with clients and regulators. Limited competitiveness impact, as per JFSC.
• Affected Roles: Review all PPs (e.g., directors, ≥10% owners) and KPs (e.g., MLRO/MLCO) for compliance needs.

Recommended Actions

1. Immediate Review (by End-2025): Audit current PPs/KPs against SBJL definitions; identify gaps in existing checks.
2. Policy Updates (Q1 2026): Revise internal policies, systems, and controls to incorporate risk-based CRCs; train relevant teams (HR, Compliance).
3. Initial Checks (During Transition): Obtain CRCs for all existing PPs/KPs by May 31, 2026; document assessments.
4. Ongoing Monitoring: Establish a risk-based schedule for renewals (e.g., higher-risk roles annually).
5. JFSC Engagement: Monitor for further guidance; prepare for potential requests or assessments in late 2026.
6. Resource Allocation: Assign a lead (e.g., Compliance Officer) and budget for checks (DBS costs ~£25-50 per person, plus foreign equivalents).

https://www.jerseyfsc.org/media/0rpnaady/feedback-on-enhancements-to-criminal-background-checks.pdf

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JFSC Next Steps

The JFSC will proceed with most enhancements and incorporate feedback.

• Exceptions include revised complex structures proposals for further consultation (published 27 November 2025, feedback closes 12 February 2026, feedback paper/updated Handbook 26 March 2026) and
• Deferred PEPs changes pending 2026 Government work/FCA guidance review (communicated first half of  2026).

Publish on 27 November 2025:

• Feedback paper,
• Complex structures follow-on CP,
• Enhanced AML/CFT/CPF Handbook,
• Prescribed NPO CFT Handbook,
• Mapping document.

Live Effective date: 31 May 2026

• Including complex structures, criminal background checks.

Handbook for financial services business, together with a tracked change version.  Handbook (tracked changes) Handbook (clean version)

• http://www.jerseyfsc.org/media/gtmjnzvq/tracked-handbook-november-2025.pdf
• http://www.jerseyfsc.org/media/wr5prwn5/clean-handbook-november-2025.pdf

Matrix mapping the COP of the existing Handbook to the new version. Matrix mapping

• http://www.jerseyfsc.org/media/dr3dph2e/handbook-mapping-november-2025.xlsx