All JERSEY legal person PTCs will now be expected to register for AML purposes.

All legal person PTCs will now be expected to register with the JFSC for AML purposes. The "AML lite" regime previously available to all non-professional trustees is now only available to INDIVIDUAL [NATURAL PERSON] TRUSTEES, courtesy of a change in the law with effect from next week.

The Assistant Chief Minister with responsibility for Financial Services has decided to amend:-

• Article 2 of the Proceeds of Crime (Duties of Non-Professional Trustees) (Jersey) Order 2016 (the “NPTO”).

This decision relates to implementing the changes as they apply to Private Trust Companies (PTCs) and some potential lack of consistency arising from interpreting the statutory and regulatory requirements.

The first amendment will

• align the terminology of the NPTO closer with FATF terminology, replacing the existing term “BY WAY OF BUSINESS” with the FATF term “AS A BUSINESS”.
• Amendment No. 6 already made a similar alignment to the Proceeds of Crime (Jersey) Law 1999 (the “1999 Law”) when it came into force on 30 January 2023.

The second amendment to Article 2 will

• Clarify that the NPTO ONLY applies to natural persons.

This change reflects the original intention behind the NPTO, i.e.,

• That legal persons should NOT BE considered non-professional trustees under the NPTO.

PTCs will now also need to consider relying on their corporate services provider [AMLSP] for assistance in discharging the full suite of AML obligations (having an MLRO, business risk assessment, policies, and procedures etc).

OBSERVATION

• Saying that a LEGAL PERSON PTC is acting "as a business" (and therefore needs to register) simply because it is a corporate entity has challenged many legal minds in Jersey.
• Also, in my non legal mind, it conflicts with the concept that a natural person director acting in a personal Non-Professional capacity is caught subject to some limited carve outs in the JFCS guidance
• A conventional PTC has no customer and does not seek to make a profit from its trusteeship. It will act only in relation to a small group of trusts, typically for a single family, and not solicit additional work from other quarters.

LONG READ

Jersey Private Trust Companies [PTC] “AS A BUSINESS” test is confirmed and must register.

THE JFSC  has announced:-

• Following the announcement by the Assistant Chief Minister [below], the JFSC is asking all PTCs to regularise their position by registering with us.

JERSEY GOV SAYS:-

The Government has made a further decision regarding the ongoing implementation of the Proceeds of Crime (Amendment No. 6) (Jersey) Law 2022 (“Amendment No. 6”) [https://www.jerseylaw.je/laws/enacted/Pages/L-25-2022.aspx]

The Assistant Chief Minister with responsibility for Financial Services has decided to amend

• Article 2 of the Proceeds of Crime (Duties of Non-Professional Trustees) (Jersey) Order 2016 (the “NPTO”).

This decision relates to implementing the changes as they apply to Private Trust Companies (PTCs) and some potential lack of consistency arising from interpreting the statutory and regulatory requirements.

The first amendment will

• Align the terminology of the NPTO closer with FATF terminology, replacing the existing term “BY WAY OF BUSINESS” with the FATF term “AS A BUSINESS”.
• Amendment No. 6 already made a similar alignment to the Proceeds of Crime (Jersey) Law 1999 (the “1999 Law”) when it came into force on 30 January 2023.

The second amendment to Article 2 will

• Clarify that the NPTO ONLY applies to natural persons.

This change reflects the original intention behind the NPTO, i.e.,

• That legal persons should NOT BE considered non-professional trustees under the NPTO.

This change

• reflects the findings in the recently published Legal Persons / Legal Arrangements National Risk Assessment (the “LPA NRA”) and
• underlines the importance of proactively managing the AML/CFT risks inherent in legal persons and legal arrangements.

JFSC Guidelines

• Having considered the results of the LPA NRA and the amendments to the NPTO, the JFSC intends to amend its Guidelines on interpretation, issued under Article 36 of the 1999 Law, which will impact legal persons and legal arrangements, including PTCs.
• The JFSC will clarify in its amended Guidelines that legal persons, such as PTCs and other corporate bodies, will be considered to be “ACTING AS A BUSINESS” where they act as trustees of an express trust.

This clarification

• Removes any remaining uncertainty regarding the “AS A BUSINESS” test and
• Brings these corporate bodies into full scope for Amendment No. 6, where they may have previously not been considered to be in scope already.

AMLSP

• And to mitigate the operational impact of these changes, the affected corporate bodies can appoint an ANTI-MONEY LAUNDERING SERVICE PROVIDER [AMLSP], as defined in Article 9A of the Money Laundering (Jersey) Order 2008,

The Assistant Chief Minister, Deputy Elaine Millar, made the Order on 23 October 2023 and will come into force seven days after today.

SOURCE

• https://www.gov.je/News/2023/Pages/UpdateConcerningAnti-moneyLaunderingAndCounteringTheFinancingOfTerrorismProvisionsForTrusteesAndPrivateTrustCompanies.aspx

• linkedin.com/posts/jersey-financial-services-commission_government-of-jersey-activity-7099787353166069760-PAT4?utm_source=share&utm_medium=member_ios