Draft
Proceeds of Crime (Amendment of Schedule 2) (Jersey) Regulations 200-
PROPOSALS TO AMEND THE LIST OF BUSINESS ACTIVITES
TO WHICH THE MONEY LAUNDERING (JERSEY) ORDER 2008 APPLIES
_____________________________________________________________________
These draft Regulations amend Schedule 2 of the
Proceeds of Crime (Jersey) Law 2008 (“Schedule 2”),
which was last revised on 19th February 2008.
The draft Regulations are necessary as a consequence
of –
§
A need for greater clarity on the application of the
Money Laundering (Jersey) Order 2008 (“Money
Laundering Order”) to fund products. The application of the Money
Laundering Order to recognized funds, unclassified funds, unregulated funds,
and what are referred to as “COBO only” funds is now more clearly set out.
§
Changes made to the regulatory framework for fund
products by the Collective Investment Funds (Amendment No. 4) (Jersey) Law
2008 on 4th April 2008, which introduced a requirement for unclassified funds
to hold certificates.
§
The identification of some additional activities that
may be considered to present a lower risk of money laundering and which may be
excluded from the definition of “financial services business”. In particular,
it is proposed that certain general partners and special propose vehicles
should not be required to comply with obligations to prevent and detect money
laundering when administered by a trust company business that is subject to
such obligations.
§
The need to clearly set out the application of the
Money Laundering Order to lawyers and estate agents that are involved in
property transactions that are affected by share transfer.
§
The correction of some anomalies that have been
highlighted since the Regulations came into force, in particular the
application of the Money Laundering Order to money service business that is
exempt from regulation under Article 3 of the Financial Services (Money
Service Business) (Exemptions) (Jersey) Order 2007. The Regulations will make
it clear that those giving change in a different currency to that tendered for
items purchased are outside the scope of Schedule 2.
The Island’s framework to counter money laundering
and the financing of terrorism will be subject to review by the International
Monetary Fund in October 2008.
Financial and manpower implications
These draft Regulations will have no implications for
the financial or manpower resources of the States.
The object of these Regulations is to update the list
of businesses in Schedule 2 to the Proceeds of Crime (Jersey) Law 1999 to
fine-tune the application of the Money Laundering (Jersey) Order 2008 to –
(a) collective
investment funds (after changes to their regulation under the revamped Collective
Investment Funds (Jersey) Law 1988);
(b) unregulated
funds (after the making of the Collective Investment Funds (Unregulated Funds)
(Jersey) Order 2008);
(c) collective
investment funds that are not the subject of public offers (that is, funds that
are only regulated under the Control of Borrowing (Jersey) Order 1958);
(d) certain general
partners and special purpose vehicles (to avoid double regulation);
(e) certain
overseas persons (again to avoid double regulation);
(f) certain
minor currency exchange transactions (to avoid unnecessary regulation); and
(g) the
buying and selling of share transfer property (to remove any doubt that these are
subject to the Money Laundering (Jersey) Order 2008).
These Regulations are intended to come into force at
the same time as the Proceeds of Crime (Supervisory Bodies) (Amendment of Law)
(Jersey) Regulations 200-.
Draft
Proceeds of Crime (Amendment of Schedule 2) (Jersey) Regulations 200-
Made [date
to be inserted]
Coming
into force [date
to be inserted]
THE STATES, in pursuance of Article 36(2) of the
Proceeds of Crime (Jersey) Law 1999[1], have made the following Regulations –
1 Amendment of Part A of Schedule 2
In Part A of Schedule 2 to the Proceeds of
Crime (Jersey) Law 1999[2] –
(a) for the
title of the Part there shall be substituted the following title –
“part a
Business regulated by the Commission
under regulatory laws”;
(b) for
paragraph 3 there shall be substituted the following paragraph –
“3.(1) Any
of the following within the meaning of the Collective Investment Funds (Jersey)
Law 1988[3] –
(a) the
business of being a functionary;
(b) the
business of a recognized fund;
(c) the
business of an unclassified fund;
(d) the
business of a scheme or arrangement that would be a collective investment fund
except for the fact that the capital, the collective investment of which is the
object or one of the objects of the scheme or arrangement, is not acquired by
means of an offer to the public of units for subscription, sale or exchange.
(2) However,
business referred to in sub-paragraph (1) does not include the business of
a company, being a company issuing units that is within Article 1A of the Collective
Investment Funds (Permits) (Exemptions) (Jersey) Order 1994[4].”;
(c) in paragraph
4 –
(i) for
sub-paragraph (a)(i) there shall be substituted the following
clause –
“(i) paragraphs
1, 3B, 4, 10, 14 and 15,”;
(ii) after
sub-paragraph (a)(iv) there shall be inserted the following clause –
“(v) paragraph 18,
except where the special purpose vehicle is not administered by a person
registered under that Law to carry on trust company business;”;
(iii) for
sub-paragraph (f) there shall be substituted the following
sub-paragraph –
“(f) excluding
trust company business carried on by a person specified in any of the
paragraphs in the Schedule to the Financial Services (Trust Company Business
(Exemptions No. 3)) (Jersey) Order 2001[5]
specified below where that business is carried on in the circumstances described
in that paragraph –
(i) paragraph
1 (private protector company),
(ii) paragraph
2 (general partner),
(iii) paragraph
4 (investment company subsidiary);”;
(iv) after sub-paragraph (g)
there shall be inserted the following sub-paragraph –
“(h) excluding
money service business specified in Article 3 of the Financial Services
(Money Service Business) (Exemptions) (Jersey) Order 2007[6].”.
2 Amendment of Part B of Schedule 2
In Part B of Schedule 2 to the Proceeds of
Crime (Jersey) Law 1999 –
(a) for the
title of the Part there shall be substituted the following title –
(b) for
paragraph 1(2) there shall be substituted the following
sub-paragraph –
“(2) In
this paragraph ‘independent legal professionals’ means those who by way of
business provide legal or notarial services to third parties when participating
in financial, or immovable property, transactions concerning any of the
following –
(a) the
buying and selling of immovable property or business entities;
(b) the
buying and selling of shares the ownership of which entitles the owner to
occupy immovable property;
(c) the
managing of client money, securities or other assets;
(d) the
opening or management of bank, savings or securities accounts;
(e) the
organization of contributions necessary for the creation, operation or
management of companies; or
(f) the
creation, operation or management of trusts, companies or similar structures.”;
(c) for
paragraph 3 there shall be substituted the following paragraph –
“3 Estate
agency services
(1) The
business of providing estate agency services for or on behalf of third parties
concerning the buying or selling of freehold (including flying freehold) or
leasehold property (including commercial and agricultural property), whether
the property is situated in Jersey or overseas.
(2) The
business of providing estate agency services for or on behalf of third parties
concerning the buying or selling of shares the ownership of which entitles the
owner to occupy immovable property, whether the property is situated in Jersey
or overseas.”;
(d) for
paragraph 6 there shall be substituted the following paragraph –
“6 Unregulated
funds
The business of an unregulated fund, being an
unregulated fund within the meaning of the Collective Investment Funds
(Unregulated Funds) (Jersey) Order 2008[7].”.
3 Citation and commencement
(1) These
Regulations may be cited as the Proceeds of Crime (Amendment of Schedule 2)
(Jersey) Regulations 200-.
(2) These
Regulations shall come into force on the same day as Article 11(4) of the Proceeds
of Crime (Supervisory Bodies) (Jersey) Law 2008[8].
