Jersey directors (acting outside of employment) get one-year exemption from certain AML obligations

Monday, 07 August 2023
Jersey company directors (acting outside of employment) who have recently been brought into scope of the anti-money laundering (AML) regime are to be exempted from certain common AML obligations that the government now considers are not relevant to them.
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The Proceeds of Crime (Amendment No.6) (Jersey) Law 2022 came into force on 30 January, removing all registration exemptions from Jersey's money laundering regime and widening Schedule 2 of the Proceeds of Crime Law to cover business activities not previously within scope, including directors. Entities newly required to register for AML supervision were granted a transitional period ending on 30 June 2023.

Soon afterwards, the Jersey Financial Services Commission (JFSC) recognised that greater clarity on the new Schedule 2 requirements was needed, particularly for exemptions and transitional rules for private trust companies and family offices. It extended the registration deadline to 31 August for directors and family offices to give them a 'better understanding of how to meet their new obligations'. By the end of June the registration deadline had been further extended to 30 September, to ensure that these newly in-scope sectors, predominantly comprising individuals, are aware of their registration requirements.

Now the Jersey authorities have taken more far-reaching measures to address the problem. Elaine Millar, the Assistant Chief Minister with responsibility for financial services, intends to make an order concerning the ongoing obligations of previously exempt directors acting outside of employment who are newly required to register as a Schedule 2 business. This order will disapply certain common AML obligations as not relevant to these directors' duties. They include the requirements to undertake risk assessments; maintain policies and procedures; and appoint a separate money laundering reporting officer and compliance officer. The policy reversal is to ensure that the regime is implemented 'in a proportionate, effective, and risk-based manner, whilst adhering to international standards'.

The exemption order will come into effect on 30 September, the day before the regime comes into force for directors, and will remain in force for a year.

There remains some uncertainty as to whether further amendments are required to the AML regime for private trust companies. Jersey's government is in discussions with the JFSC on this issue and will announce the outcome early this month.


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