JERSEY to broaden the scope of sanction reporting [SancSAR]

The Minister for External Relations [the Minister] is intending to propose to the States Assembly that an amendment be made to the reporting obligations under Article 32 of Sanctions and Asset-Freezing (Jersey) Law 2019.

The Draft Sanctions and Asset-Freezing (Amendment of Law – Reporting Obligations) (Jersey) Regulations 202- would, if passed, broaden the scope of the reporting obligations,

Currently Article 32(1)

• requires a financial institution to provide the Minister with information about a person.
• where it knows or has reasonable cause to suspect, as a result of information obtained in the course of its business, that the person is a Designated Person, or has committed, is committing or intends to commit an offence under SAFL.
• However, the requirement only applies in circumstances where the financial institution.
• holds an account of the person,
• has entered into dealings or an agreement with the person, or
• has been approached by or on behalf of the person.

The proposed amendment made by the Minister intends on expanding the scope of the requirement by removing these criteria.

If approved, Article 32 of the Sanctions and Asset-Freezing (Jersey) Law 2019, paragraph (1) the following will be substitute the current requirements –

• “A relevant financial institution must inform the Minister as soon as practicable if –
  • is a designated person, or
  • has committed, is committing, or intends to commit an offence under this Law; and
• it knows, or has reasonable cause to suspect, that a person –
• 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.”.

An Explanation on the changes is below.  

DRAFT WRITTEN REPORT. 

1.Background

1.1 The Sanctions and Asset-Freezing (Jersey) Law 2019 (“SAFL”) and the Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2021 (the “Sanctions Order”), which is made under SAFL, are the Island’s key pieces of sanctions legislation, through which it implements all United Nations sanctions and all autonomous UK sanctions.

1.2 The draft Sanctions and Asset-Freezing (Amendment of Law - Reporting Obligations) (Jersey) Regulations 202- (the “draft Regulations”) are intended to broaden the scope of Article 32 of SAFL by removing the current criteria as to the circumstances in which a financial institution is required to provide the Minister for External Relations (the “Minister”) with information about a Designated Person.

2.Removal of the current limitation on reporting by a financial institution

2.1 Regulation 1 of the draft Regulations amends Article 32(1) of SAFL, which sets out obligations on relevant financial institutions to report certain information to the Minister.

• Article 32(1) currently requires a financial institution to provide the Minister with information about a person where it knows or has reasonable cause to suspect, as a result of information obtained in the course of its business, that the person is a Designated Person, or has committed, is committing or intends to commit an offence under SAFL.
• However, the requirement only applies in circumstances where the financial institution.
• holds an account of the person,
• has entered into dealings or an agreement with the person, or
• has been approached by or on behalf of the person.
• The amendment made by these Regulations expands the scope of the requirement by removing these criteria.

2.2 Regulation 2 provides that the draft Regulations will come into force 7 days after they are made.

SOURCE

• https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fwww.jerseyfinance.je%2Fwp-content%2Fuploads%2F2023%2F06%2FDraft-Written-report-Amendment-to-Regulations-v2.docx&wdOrigin=BROWSELINK

DRAFT EXPLANATORY NOTE

1. These Regulations, if made, would amend reporting obligations under Article 32 of the Sanctions and Asset-Freezing ( Jersey) Law 2019 (the “Sanctions Law”).
2. Regulation 1 amends Article 32(1) of the Sanctions Law, which sets out obligations on relevant financial institutions to report certain information to the Minister for External Relations (the “Minister”).
3. Article 32(1) currently requires a relevant financial institution to provide the Minister with information about a person where it knows or has reasonable cause to suspect, as a result of information obtained in the course of its business, that the person is a designated person.
4. But the requirement only applies in circumstances where the financial institution holds an account of the person, has entered into dealings or an agreement with the person, or has been approached by or on behalf of the person.
5. The amendment made by these Regulations expands the scope of the requirement by removing these criteria.
6. Regulation 2 provides that these Regulations come into force 7 days after they are made.

SOURCE

• https://www.jerseyfinance.je/check-file?file=wp-content/uploads/2023/06/SanctionsandAsset-FreezingAmendmentofLaw-ReportingObligationsRegulations202-_EXN3.pdf