FATF grey listing and the impact on Jersey CDD concessions

On 23 June 2023, the Financial Action Task Force (FATF) added the following to its 'grey list:🚩 CAMEROON 🚩 CROATIA 🚩 VIETNAM

• https://www.fatf-gafi.org/en/publications/Fatfgeneral/Increased-monitoring-june-2023.html

One immediate impact of a grey listing event is for Jersey firms to consider Jersey CDD concessions and whether they still apply.

Part 3A of the Money Laundering Order provides exemptions from CDD requirements that apply in some strictly limited circumstances, as set out in Articles 17B - D and 18.

However, the circumstances in which exemptions under Part 3A do not apply (Article 17A)

1. The customer is resident in a country that is not compliant with the FATF recommendations

See 7.13 - https://www.jerseyfsc.org/media/6549/section-7-enhanced-and-simplified-cdd-measures.pdf

See 13.7.1 – https://www.jerseyfsc.org/media/6555/section-13-funds-and-fund-operators.pdf

Also, Where funds involved in a business relationship have

• Been received from a bank that is a regulated person or carries on equivalent business to deposit-taking (see Section 1.8 JFSC AML HANDBOOK regarding equivalent business); and
• Have come from an account in the sole or joint name of the customer who is an individual (or are individuals);

Then the receipt of funds from such an account may be considered to be reasonably capable of verifying that the person to be identified is who they are said to be, where the product or service requested by the customer is considered to present a "very low" risk of money laundering, the financing of terrorism, or the financing of proliferation.

This will be the case where funds may only be received from, and paid to, an account in the customer's name, i.e., a product or service where funds may not be paid in by, or paid out to, external parties.

The concession referred to above must not be applied in the following circumstances:

•  Where the customer is resident in a country or territory that is not compliant with the FATF Recommendations.

See 7.18 - https://www.jerseyfsc.org/media/6535/sections-1-18-consolidated-11-april-2023.pdf