Jersey's AML Overhaul: Master the Three-Gateway Test Before April 2026 Hits Your Fund Structures!

The structured three-gateway framework is a key feature of the Jersey Financial Services Commission's (JFSC) revised Guidelines on the interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999 (POCL), which are set to take effect on 30 April 2026.

• The guidance objectives are to provide a clear, step-by-step test to determine whether a person is carrying on a "financial services business" under Schedule 2 of POCL, thereby requiring registration with the JFSC under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 (SBL) and compliance with Jersey's AML/CFT/CPF regime.
• The framework addresses industry feedback on ambiguities in prior guidance, aiming to improve clarity, consistency, and alignment with FATF standards by focusing on the substance of activities rather than labels or forms.
• All three gateways must be met for Schedule 2 to apply, and individuals should regularly reassess their status if their activities or circumstances change.

An overview

1. Activity Gateway: Relevant Activity in Schedule 2

• This initial gateway assesses whether the person's activities or operations fall within the categories outlined in Parts 1–4 of Schedule 2, which cover financial institutions (e.g., banking, lending, money transmission), designated non-financial businesses and professions (DNFBPs, e.g., trust company business, real estate, legal services), virtual asset service providers (VASPs), and express trusts.
• The evaluation is based on what the person is actually doing in practice, not how the activity is described, labelled, or structured.
• You must consider all aspects of the person's operations holistically, including any ancillary or supporting elements none can be disregarded to avoid scope creep.
• For example, if an activity matches a Schedule 2 description (even if not explicitly identified as such), it qualifies. This gateway emphasises a risk-based, substantive review to prevent circumvention through recharacterisation.

2. 'As a Business' Gateway: Conducted 'As a Business' via a Two-Limbed Test

• If the Activity Gateway is met, this gateway requires the activity to be conducted "as a business," reformulated as a two-limbed test:
1. (i) on a business, professional, or commercial basis; and
2. (ii) in the presence of a customer.
• Both limbs must be satisfied, shifting from prior guidance to reduce ambiguity and focus on context and substance.

LIMBS

• Limb 1: Business, Professional, or Commercial Basis:
• This evaluates the overall context, intent, and nature of the activity, not just frequency, volume, or remuneration.
• A single instance or transaction can qualify if it has a commercial character (e.g., structured with profit motive, formal agreements, market-rate fees, or active marketing/promotion).
• Charitable or voluntary activities that use professional skills may be excluded if they lack a commercial basis, but AML/CFT/CPF risks must still be considered.
• Examples include ongoing services with billing, or ad hoc advice provided in a professional capacity for a fee. In contrast, informal, non-promoted help (e.g., to family without structure) typically falls outside the scope.
• Limb 2: Presence of a Customer:
• The activity must involve providing services to or acting for a "customer," defined broadly as any natural or legal person (or arrangement) with whom a business relationship is formed or a one-off transaction occurs aligning with
• Definitions in the Money Laundering (Jersey) Order 2008 and
• FATF concepts (e.g., encompassing "third parties" or "another natural or legal person").
• Intra-group or family/friend arrangements can still involve a customer if formalised and commercial (e.g., via engagement letters or market-rate fees to a group company).
• However, employees acting within the scope of their employment do not conduct business "in their own right" (the employer does), and salaried directors, secretaries, partners, or professionals in registered entities are generally excluded if they are not operating independently.

3. Jersey Nexus Gateway: Jersey Connection

• The final gateway requires the business to have a sufficient connection to Jersey, specifically:
• Carried on in or from within Jersey; or
• Carried on anywhere in the world in respect of a "Jersey entity" (e.g., a Jersey-incorporated company or a non-natural person/company with a registered office in Jersey).
• "In or from within Jersey"
• Is interpreted broadly to include physical presence, operational activities, or impacts linked to the jurisdiction (detailed guidance is provided in Annexe 1 of the Guidelines, covering factors such as marketing, client base, and administration in Jersey).
• Holding oneself out as carrying on such business also triggers this gateway.
• Notably, non-professional trustees are exempt from this gateway and SBL registration and instead fall under lighter obligations under Article 36(1A) of POCL.

Clarifications on Fund-Related Activities

• The revised Guidelines provide targeted interpretative support for fund and security services activities (primarily under Paragraph 9 of Part 2, Schedule 2), which involve participating in securities issues and providing related financial services.
• Also, to future-proof against upcoming changes to the Control of Borrowing (Jersey) Order 1958 (COBO) regime and ensure consistency as Jersey's fund regulation evolves.

Key clarifications include:

• Scope of Participation:
• "Participation" requires a direct, active, and important role in the issuance process (e.g., underwriters, lead managers, bookrunners, broker-dealers, or advisory firms essential to the issuance's success).
• Merely issuing securities is insufficient; it must involve providing services to a customer (typically the issuer).
• Activities such as maintaining one's own securities register or custody are out of scope due to the lack of a customer nexus.
• Application to Funds:
• For fund structures (e.g., collective investment funds, alternative investment funds, Jersey private funds), activities like managing schemes or issuing units/securities qualify if meeting the gateways.
• General partners in limited partnerships often fall under fund services, portfolio management (Paragraph 11, Part 2 managing customer portfolios, excluding own assets), or directorship roles (Paragraph 23(2), Part 3).
• Registration is required for all applicable activities, but for regulated funds (e.g., under the Collective Investment Funds (Jersey) Law 1988), a notification under Article 11(3) of the SBL may suffice instead of full registration if already supervised.
• 'As a Business' in Funds:
• Emphasises the customer limb (e.g., investors or the fund entity as customers) and commercial basis (e.g., structured with fees).
• Examples distinguish between in-scope professional fund management and out-of-scope personal asset handling.
• The Guidelines incorporate FATF interpretations of risk-based approaches, with no retrospective application, but ongoing reassessment is advised for legislative changes.

This framework enhances proportionality by focusing on high-risk activities while providing practical examples to reduce queries and support compliance in the funds sector.

References  

1. AML/CFT/CPF Handbooks - Jersey Financial Services Commission - https://www.jerseyfsc.org/industry/financial-crime/amlcftcpf-handbooks
2. Update: AML/CFT/CPF Handbook - Jersey Financial Services Commission - https://www.jerseyfsc.org/news-and-events/update-amlcftcpf-handbook
3. UPDATED JFSC AML/CFT/CPF HANDBOOK NOW EXPECTED 31 MAY 2026 - Comsure - https://www.comsuregroup.com/news/updated-jfsc-amlcftcpf-handbook-now-expected-31-may-2026
4. UPDATED JFSC AML/CFT/CPF HANDBOOK NOW EXPECTED 31 MAY 2026 - Immediate Actions to Take and Prioritise - Comsure - https://www.comsuregroup.com/news/updated-jfsc-amlcftcpf-handbook-now-expected-31-may-2026-immediate-actions-to-take-and-prioritise
5. The issue affecting the consolidated AML/CFT/CPF Handbook has now been resolved ... - https://www.linkedin.com/posts/jersey-financial-services-commission_the-issue-affecting-the-consolidated-aml-activity-7414624119369093120-hMUy
6. Jersey delays AML handbook amendments until June 2026 - STEP - https://www.step.org/industry-news/jersey-delays-aml-handbook-amendments-until-june-2026
7. Handbook on Countering Financial Crime (AML/CFT/CPF)   GFSC - https://www.gfsc.gg/commission/financial-crime/handbook-on-countering-financial-crime-AML/CFT/CPF
8. AML/CFT/CPF Handbook - Jersey Financial Services Commission - https://www.jerseyfsc.org/news-and-events/amlcftcpf-handbook
9. JFSC Consultation Paper No 8 2025: Follow-on consultation: AML/CFT/CPF Handbook enhancements complex structures | Insights | Jersey Finance - https://www.jerseyfinance.com/insights/jfsc-consultation-paper-no-8-2025-follow-on-consultation-aml-cft-cpf-handbook-enhancements-complex-structures
10. Clarifying Schedule 2: The JFSC's Proposals For Revision Of Guidance For Article 36 Of The Proceeds Of Crime Law | Appleby - https://www.applebyglobal.com/publications/clarifying-schedule-2-the-jfscs-proposals-for-revision-of-guidance-for-article-36-of-the-proceeds-of-crime-law
11. Adjusting the scope of Schedule 2 - Walkers Global - https://www.walkersglobal.com/en/Insights/2025/09/Adjusting-the-scope-of-Schedule-2
12. Follow-on consultation: AML/CFT/CPF Handbook enhancements complex structures | Jersey Financial Services Commission - https://www.jerseyfsc.org/media/dimjchjk/follow-on-consultation-aml-cft-cpf-handbook-enhancements-complex-structures.pdf
13. JFSC confirms 2026 fees, clarifies Schedule 2 POCL scope | Metumo Shilongo posted on the topic | LinkedIn - https://www.linkedin.com/posts/metumo-shilongo-955708131_feedback-on-proposed-fees-for-2026pdf-activity-7381346897644396544-MaVd
14. UPDATED JFSC AML/CFT/CPF HANDBOOK NOW EXPECTED 31 MAY 2026 - Comsure - https://www.comsuregroup.com/news/updated-jfsc-amlcftcpf-handbook-now-expected-31-may-2026
15. Draft Proceeds of Crime (Jersey) Amendment Regulations 202 - States Assembly - https://statesassembly.je/publications/propositions/2025/p-39-2025
16. Schedule 2 Forms - Jersey Financial Services Commission - https://www.jerseyfsc.org/industry/sectors/schedule-2-forms
17. Session 5 - JFL - JSCCA - https://jscca.org/uploads/documents/inline/pdf/session-5-jfl-compressed.pdf
18. Through the looking glass: Jersey's revised AML Regime | Bedell Cristin - https://www.bedellcristin.com/knowledge/articles/2023/through-the-looking-glass-jerseys-revised-aml-regime
19. Jersey delays AML handbook amendments until June 2026 - STEP - https://www.step.org/industry-news/jersey-delays-aml-handbook-amendments-until-june-2026