Jersey's policy on beneficial ownership registry is revealed

Thursday, 03 November 2016

Jersey's government is to require trust and company service providers (TCSPs) to notify changes of beneficial ownership to the jurisdiction's central registry within 21 days of learning of the change. A central register of directors of Jersey companies is also to be created. Information in both registries will be exchanged with law enforcement and tax authorities on request.

Jersey, along with all other Crown Dependencies and British Overseas Dependencies, have adopted these measures on request by the UK government. The jurisdiction announced last year that Britain's law enforcement and tax authorities needed immediate access to beneficial ownership information for the purposes of enforcing money laundering regulations. Jersey accepted this position in an exchange of notes signed in April this year.

Unlike some other jurisdictions, Jersey already had a central registry of company beneficial ownership, and all corporate and legal entities formed for non-residents are required to be formed through regulated TCSPs. However, this registry was considered by some critics to be insufficiently up-to-date, being compiled from information supplied at the time of incorporation. The policy announced this week is designed to address this issue, taking into account comments received during a consultation held earlier this year.

The new system acknowledges that TCSPs may only know of a change of beneficial ownership when they carry out a compliance review exercise under the existing money laundering provisions. Moreover, the obligation to notify a change of beneficial ownership will not be driven by a fixed percentage or threshold of equity, but will continue to be determined by the TCSPs' own internal procedures.

Jersey's government acknowledged the 'increasing need for law enforcement authorities to have information passed to them quickly to investigate financial crime, but particularly where terrorist financing is concerned' – with the Jersey Financial Services Commission (JFSC) and the financial services industry stating last month that terrorist financing poses the most severe risk facing firms in Jersey.

To implement the new policy, TCSPs will have to install computer systems that will automatically deliver updates to the central registry, which is managed by the JFSC. This will be done by the end of this year – a timescale that the JFSC admits is 'very tight'.

All Jersey corporate and legal entities will have to confirm their beneficial ownership information to the Companies Registry in the first half of next year. For corporate and legal entities administered by TCSPs, this will be the beneficial ownership information the TCSP already holds, based on risk-based money laundering guidelines. The new policy will start formally on 30 June 2017.

The register of company directors is to be introduced by the middle of 2018. There will be a three-month window before the middle of 2018 for companies to provide the required information. This register is not to be made public for the time being, though it will be available to law enforcement and tax authorities on request. However this is a controversial issue, and the government will reconsider its decision if and when there is agreement on a global standard to make registers of directors publicly available.

Sources

The content displayed here is subject to our disclaimer. Read more