JFSC Thematic examination for SUSPICIOUS ACTIVITY REPORTING [SARs] starts 7 MARCH 2025

Today, March 7, 2025, the JFSC has advised that FOR THOSE IT HAS SELECTED, it is starting today is a THEMATIC EXAMINATION for SUSPICIOUS ACTIVITY REPORTING [SARs]  

• https://www.jerseyfsc.org/news-and-events/thematic-examination-for-q2-and-q3-2025-on-suspicious-activity-reporting/

In this update, they say that for those it has selected, they have TODAY Issued its THEMATIC EXAMINATION information request (details below)

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JFSC Thematic examination for SUSPICIOUS ACTIVITY REPORTING [SARs] starts 7 MARCH 2025 (the full timetable is below)

• As part of the JFSC thematic examinations for 2025 (announced in January), the JFSC will assess whether supervised persons meet statutory obligations and regulatory requirements related to SARs.

This thematic examination follows:-

• Due to perceived risks, the 2024 Moneyval Mutual Evaluation Report identified SUSPICIOUS ACTIVITY REPORTING as a key focus area.
• The 2 JFSC Onsite Thematic Examinations will assess the role of the money laundering reporting officer (a summary of the findings is below).

KEY AREAS OF FOCUS

The key areas of focus for this thematic examination will be to review and assess whether supervised persons can demonstrate they have met the statutory obligations and regulatory requirements relating to SARs, including those relating to:

1. REPORTING KNOWLEDGE OR SUSPICION –
1. Do staff understand their obligation to report suspicions, and are they aware of the difference between their obligations and those of the supervised persons?
2. PROCEDURES FOR REPORTING –
1. Do supervised persons have adequate and up-to-date policies and procedures to make it clear to staff what to do in the event a suspicion is formed, and do the procedures ensure adequate and accurate records are maintained?
3. MONEY LAUNDERING REPORTING OFFICER (MLRO) –
1. Does the MLRO have appropriate independence, authority, and support to perform its role?
4. REPORTING SUSPICIOUS ACTIVITY –
1. Does the MLRO make external SARs as soon as practicable to the FIU where suspicion is formed and ensure that adequate and accurate records are maintained?
5. FIU CONSENT –
1. Does the supervised person understand and, where appropriate, act within the requirements of the consent regime?
6. TIPPING OFF –
1. Does the supervised person and its staff understand and have adequate measures to guard against tipping off?
7. TRAINING –
1. Does the supervised person provide adequate training to staff at appropriate frequencies on reporting suspicious activity?
8. DISCLOSURE TO GROUP COMPANIES AND NETWORKS –
1. Does the supervised person have adequate systems and controls (including policies and procedures) to manage disclosure in line with permitted guidelines?

JFSC 2019 VISIT - THE ROLE OF THE MONEY LAUNDERING REPORTING OFFICER

1. In 2019, the JFSC conducted onsite thematic examinations to assess the role of the money laundering reporting officer.
• https://www.jerseyfsc.org/industry/examinations/themed-examination-role-of-money-laundering-reporting-officer/
2. The scope of these examinations included a review of some obligations on suspicious activity reporting.
3. Most of the JFSC findings related to:
• Policies and procedures - ensuring the business has adequate systems and controls in place to prevent and detect money laundering and the financing of terrorism
• Training and awareness - ensuring employees are alert to money laundering and financing of terrorism risks and well-trained in recognising notable transactions or activity which may indicate money laundering or terrorist financing activity
• Boards and management teams of all supervised persons were advised to review the JFSC findings from the themed examination programme 2019: the money laundering reporting officer role and consider their arrangements to ensure adherence to the regulatory requirements.
4. In addition, the findings relating to SARs continue to be prevalent and, in some cases, considered serious.

KEY STAGE OF THE 2025 EXAMINATION

Notable dates for this thematic examination are:

1. Issue of the information request to all supervised persons subject to this SARs thematic examination
1. 7 March 2025
2. Response required from all supervised persons to Phase I of the information request
1. 21 March 2025
3. Response required from all supervised persons to Phase II of the information request
1. 18 April 2025
4. Onsite examination period
1. May 2025 to September 2025
5. Draft individualised reports
1. Within six weeks of the end of the exam
6. Issue of industry-wide feedback paper
1. Q4 2025

BACKGROUND

THEMATIC EXAMINATION FOR Q2 AND Q3 2025 ON SUSPICIOUS ACTIVITY REPORTING -

• On 31 January 2025, the JFSC published its selected themes for thematic examinations this year.
• https://www.jerseyfsc.org/news-and-events/thematic-examination-programme-2025/
• Suspicious activity reporting (SARs) was one of the three themes selected based on perceived risks and recommended actions from the 2024 MONEYVAL Mutual Evaluation Report.

JERSEY’S 2024 MONEYVAL MUTUAL EVALUATION REPORT -

1. The 2024 MONEYVAL Mutual Evaluation Report included a Recommended Action regarding suspicious activity reporting,
1. https://www.fatf-gafi.org/en/publications/Mutualevaluations/MER-Jersey-2024.html
2. MONEYVAL stated that the JFSC should:
1. Continue efforts at monitoring and enhancing the effectiveness of internal systems and processes of supervised persons for identifying and reporting suspicious activity
2. Ensure that all supervised persons are submitting Suspicious Activity Reports to the Jersey Financial Intelligence Unit (FIU) promptly after a suspicion is formed
3. Supervised person’s obligations relating to SARs

LEGAL AND REGULATORY DRIVERS

1. Supervised persons conducting business in or from within Jersey must report knowledge e or suspicion of money laundering, terrorist financing and proliferation financing to the FIU in line with their obligations under the Proceeds of Crime (Jersey) Law 1999 and Terrorism (Jersey) Law 2002.
2. Under the Money Laundering (Jersey) Order 2008, a supervised person must
1. Have procedures in place for reporting knowledge or suspicion of money laundering, the financing of terrorism, and proliferation financing activity to the FIU.

SOURCES

• https://bit.ly/4hdUBjA
• https://www.jerseyfsc.org/news-and-events/thematic-examination-for-q2-and-q3-2025-on-suspicious-activity-reporting/
• https://www.linkedin.com/posts/jersey-financial-services-commission_following-the-2024-moneyval-mutual-evaluation-activity-7303670788304351233-_uWD?utm_source=share&utm_medium=member_ios&rcm=ACoAAAA_6EIB0wPAWyjQcuq_XiD3asUV8xpMeZ0