ASK MAT – I AM AWARE OF MY JERSEY FIU “SAR” RESPONSIBILITIES, BUT LESS SO ON SANCTION REPORTING. CAN YOU HELP?

MAT REPLY:-

• Thank you for a great question; understandably, sanction reporting (SancSAR) is not at the forefront of your mind when FIU (Financial Crime/Money Laundering & Terrorist Financing) SAR reporting is more likely
• However, it is essential to recognise that for some businesses and persons, there is a legal obligation to report a SANCTION matter to the Jersey Government by the Minister for External Relations and Financial Services because not doing so is a criminal offence.

GUIDANCE

You should start with the following guidance:-

• Your financial sanctions reporting obligations are outlined on the Government of Jersey website,
• https://www.gov.je/government/departments/jerseyworld/pages/sanctionsfaq.aspx#anchor-5
• https://www.gov.je/government/departments/jerseyworld/pages/measuresagainstterrorism.aspx
• A more extensive sanctions guidance can be found on the Jersey Financial Services Commission’s website.
• https://www.jerseyfsc.org/industry/international-co-operation/sanctions/
• https://www.jerseyfsc.org/industry/international-co-operation/sanctions/about-sanctions/
• If unsure of your reporting obligations, seek independent legal advice.

Further to this guidance, I can offer the following thoughts

EXECUTIVE SUMMARY

• SANCTION reporting obligations FALL under Article 32 of the Sanctions and Asset-Freezing (Jersey) Law 2019
• SANCTION reporting obligations are separate from any legal obligation for a Suspicious Activity Report to the FIU [https://www.fiu.je/] under the
• the Proceeds of Crime (Jersey) Law 1999 –
• Reporting requirement (Article 34A) and
• Protection for reporting (Article 32)   
• The Terrorism Law - Articles 19 and 18
• SANCTION reporting obligations are If you KNOW or have 'REASONABLE CAUSE TO SUSPECT' that you are in possession or control of, or are otherwise dealing with, the funds or economic resources of a designated person you must
• Freeze assets
• Refrain from acting on instructions and transactions
• Report to the Jersey government’s appropriate minister
• In some instances, a dual report may be needed as a KNOWLEDGE AND OR SUSPICION may meet all the tests above
• Furthermore, whilst the Proceeds of Crime Law and Terrorism Law anticipate that a report may be made by an employee directly to the FIU,
• Article 21 of the Money Laundering Order requires that such reporting is made in line with a supervised person’s reporting procedures.
• Such procedures must ensure that a report by an employee is made to the MLRO (or deputy MLRO)
• It should be read that a firm MLRO should also manage internal Sanction reports

THESE MATTERS ARE COVERED BELOW

SANCTION REPORTING OBLIGATIONS [SancSAR] – TRIGGER FOR REPORTING

• Reporting obligations are set out in Article 32 of Sanctions and Asset-Freezing (Jersey) Law 2019 ('SAFL) and apply to all sanctions regimes in force.
• These obligations include requirements for a relevant financial institution* (the "institution") to inform the MINISTER FOR EXTERNAL RELATIONS AND FINANCIAL SERVICES (MER) if:
• It holds an account of a person, has entered into dealings or an agreement with a person or has been approached by or on behalf of a person
• IT KNOWS, or has REASONABLE CAUSE TO SUSPECT, that the person:
      i) Is a designated person, or
      ii) Has committed, is committing, or intends to commit an offence, and
• The information or other matter on which the knowledge or reasonable cause for suspicion is based came to it in the course of carrying on its business
• Please note:
• Reasonable cause to suspect refers to an objective test that asks whether there were factual circumstances from which an honest and reasonable person should have inferred knowledge or formed the suspicion. 

SancSAR – THE REPORTING FORM

• To comply with any reporting obligations in respect of financial sanctions YOU MUST:-
• Use the Sanctions Compliance Reporting Form​  https://www.gov.je/SiteCollectionDocuments/Industry and finance/Sanctions Compliance Reporting form.docx

and

• Return the completed form to sanctions@gov.je 
• To request a copy of this form by email, or should you have any issues accessing this document, please contact sanctions@gov.je​
• This Sanctions Compliance Reporting Form should be used to report all compliance-related information to the MER

SancSAR – INFORMATION TO INCLUDE IN EXTERNAL MINISTER REPORT

• The information given to the Minister must include:
• The information or other matter on which the relevant financial institution's knowledge or reasonable cause for suspicion is based
• Any information that the relevant financial institution holds about the person by which the person can be identified
• If the person is a customer or client of the institution, the nature and amount or quantity of any funds or economic resources held by the institution for the person at the time when the institution first had the knowledge or reasonable cause for suspicion
• Please note that the information you provide may be shared to facilitate or ensure compliance with financial sanctions legislation, per the Minister’s information-sharing powers and Jersey data protection legislation.

SUMMARY OF SancSAR ACTIONS

• This Sanctions Compliance Reporting Form should be used to report all compliance-related information to the “MER”, including information regarding:-

• Suspected designated persons (Part B);
• Assets you have frozen (Part C); and
• Suspected breaches of financial sanctions (Part D).
• Annexes 2 and 3 to this form provide key terms and information to assist you in completing your report.

• Please ensure that when completing this form,

• You believe that the facts and information provided in this form are accurate and
• True to the best of your knowledge.

ON REPORTING A SancSAR - WHAT YOU MUST DO 

• If you know or have 'reasonable cause to suspect' that you are in possession or control of, or are otherwise dealing with, the funds or economic resources of a designated person, you must: 
• FREEZE AND REFRAIN
• Freeze such accounts and other funds or economic resources without prior notice and delay
• Refrain from dealing with the funds or assets or making them available (directly or indirectly) to such persons unless licensed by the 'MER.'
• REPORT
• Report any findings to MER, together with any additional information that would facilitate compliance with SAFL
• Provide any information concerning the frozen assets of designated persons that MER may request.
• Please note
• Information reported to MER may be passed on to other regulatory authorities or law enforcement 

SOURCES

• https://www.gov.je/government/departments/jerseyworld/pages/sanctionsfaq.aspx#anchor-5
• https://www.jerseyfsc.org/industry/international-co-operation/sanctions/
• https://www.jerseyfsc.org/industry/international-co-operation/sanctions/about-sanctions/
• Sanctions Compliance Reporting Form​  https://www.gov.je/SiteCollectionDocuments/Industry and finance/Sanctions Compliance Reporting form.docx
• Proceeds of Crime (Jersey) Law 1999 https://www.jerseylaw.je/laws/current/Pages/08.780.aspx
• Money Laundering (Jersey) Order 2008 is made - https://www.jerseylaw.je/laws/current/Pages/08.780.30.aspx
• Terrorism (Jersey) Law 2002 https://www.jerseylaw.je/laws/current/l_40_2002
• Combatting terrorism and terrorist financing - Government of Jersey https://www.gov.je/government/departments/jerseyworld/pages/measuresagainstterrorism.aspx