3 March 2006 – Policy On Referrals To The Attorney General – Proceeds of Crime (Jersey) Law 1999 / Money Laundering (Jersey) Order 1999 – On 27 January 2006, the Court of Appeal upheld the decision made by the Royal Court to convict persons for failing to comply with Article 2 (1) (a) of the Money Laundering (Jersey) Order 1999 (“the Order”). The obligation under Article 2 (1) (a), to maintain procedures for the purposes prescribed in the Order, is an absolute one and the ruling makes it clear that even a single breach is enough to constitute an offence.

In the Commission’s view, this case emphasises the importance for regulated entities to maintain adequate procedures to combat money laundering on an ongoing basis. Equally, the Commission is aware that there may be concern in the financial community that the judgement means that any breach of the Order identified by the Commission, no matter how small, could give rise to a criminal prosecution and possible conviction.

The present policy of the Commission is that if it should come across an apparent breach of the Order in the course of its supervision, including as a result of an onsite examination, the Commission will refer it to the Attorney General if the breach is considered to be sufficiently serious. It should be stressed, however, that a decision on whether to prosecute a breach of the Order will be a matter solely for the Attorney General.

The Commission will generally regard a breach of the Order as sufficiently serious to the extent that it poses a threat to clients or potential clients or to the reputation of the Island and/or where it casts doubt on the integrity, competence or financial standing of the person concerned. It will also be relevant if the breach was deliberate or premeditated rather than accidental, or if the person (individual or body corporate) has failed to report a material breach to the Commission.

Failure, inability or refusal to cooperate with the Commission to rectify a breach, and a history of past breaches or poor regulatory compliance (which may give grounds to believe that the breach is likely to be repeated and/or is part of a systemic failure), will also be taken into account.

The above list of relevant factors is not intended to be exhaustive. But it should be enough to indicate that referrals to the Attorney General by the Commission will be judged on their merits on a case-by-case basis and will not be made on every occasion a breach of the Order is identified.

Regulated entities and their directors should however be in no doubt that they put themselves at potential risk if they do not take adequate steps to ensure that they are compliant with the Order. In assessing their compliance they should pay close attention to the Guidance Notes (and their successor) issued by the Commission.

Policy dated 3 March 2006

http://www.jerseyfsc.org/pdf/policy_on_referrals_to_attorney_general.pdf