Summer is gone, but the heat remains for Non-Compliance of AML/CFT

The JFSC (Jersey Financial Services Commission) has a role to play in Industry – to uphold the highest standards by regulating, developing and supervising the Islands Financial Services Industry. They are however beholden to a greater power.

Part of this power is to take a greater stance in relation to AML obligations including financial penalties for those flouting the law. We all live in a world where we are now scared of what may happen on a personal level. The most recent penalties issued were related to AML/CFT failings and obligations.

The JFSC has stated that it is looking to build a track record of effective risk-based assessment ahead of Jersey’s next MoneyVal evaluation in 2022, so don’t be surprised to see further enforcement action before then.

Rather than being outliers, it is likely the JFSC will start to push for more action, and therefore it's imperative to get in front of the issues. The regular review and testing of your AML/CFT processes and policies is the best way for a regulated entity to ensure that it complies with its obligations and avoid such penalties. Given the amendments made to the Money Laundering Order 2008, it is now more than appropriate for businesses to review their compliance measures.

Given the increased use of the civil financial penalty regime, principal persons should be aware of their obligations. The JFSC has the power to impose financial penalties on individuals as well as the Regulated Entity itself. The only caveat being that the threshold for imposing a civil financial penalty on a principal person is high – there must be a significant and material contravention by a registered person and such contravention was (i) committed with the consent or connivance of, or is attributable to neglect on the part of a principal person or (ii) aided, abetted, counselled or procured by a principal person.

The offshore finance industry represents an ever changing regulatory environment, and one that can be high profile if things go wrong. If you want to know more about your business’s AML/CFT policies and processes, or if you simply want to discuss how your business’ policies and procedures can be tested contact Vycki at Sabre Advisory.

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