Understanding the impact on Schedule 2 Business

John Everett profile image
John Everett
Chief Risk Officer
Matthew Devine-Hill profile image
Matthew Devine-Hill
Associate Director, Private Equity & Venture Capital.
Published: 17th Jul 2023

Decoding recent amendments to the Proceeds of Crime (Jersey) Law 1999

The Proceeds of Crime (Jersey) Law (Amendment No.6) (Jersey) Law 2022, which came into force earlier this year, has sparked intense discussions within the Jersey Funds Association and market updates. The amendments have led to a flurry of activity as market participants scramble to understand their implications. To provide a comprehensive understanding, let’s delve into two crucial questions: firstly, what is the Proceeds of Crime (Jersey) Law (1999)? Secondly, what are the key changes brought about by the recent amendments?

Understanding the Proceeds of Crime (Jersey) Law (1999) and its significance
The Proceeds of Crime (Jersey) Law, or (referred to as “POCL”) serves as the cornerstone of anti-money laundering requirements in Jersey, in conjunction with the Money Laundering (Jersey) Order (“MLO”). Together, these regulations establish the framework for combating money laundering activities within the jurisdiction.

Changes introduced by the recent amendments
Amendments to the POCL have eliminated several exemptions previously granted from meeting anti-money laundering requirements. Additionally, the updated legislation has aligned the definition of entities subject to these requirements with the standards set by the Financial Action Task Force (FATF).

Impact of the amendments
It is worth noting that these amendments represent the most significant changes to financial regulation in Jersey. The effect is that more entities are caught – directly – by Jersey requirements than previously. The removal of exemptions and the broader reach of the regulatory framework signify a major shift in the landscape, prompting market participants to closely examine and adapt their practices to remain compliant.

‘I think this is the biggest change to financial regulation in Jersey since some of the basic regulatory requirements were introduced.’
‘Drawing from my experience as a former regulator in both Jersey and the UK, I have not witnessed a regulatory framework with criminal penalties for non-compliance that is subject to such widespread disagreement regarding its scope.’

Way forward and next steps

Considering the regulatory changes, particularly in the realm of combating money laundering, no jurisdiction can claim immunity from increasing regulatory requirements. With the introduction of the AML Service Provider concept, Jersey Authorities aim to alleviate additional burdens by enabling your current service provider to assist you in achieving compliance.

Understanding these amendments and their impact on businesses and clients has undeniably posed significant challenges, and it appears that the road ahead will continue to be demanding.

Despite the conclusion of the transitional period, it is expected that a period of adjustment will be necessary to fully adapt to these new requirements. With a team that encompasses individuals with experience in both the Jersey regulator and the Government financial services sector, we are well-positioned to stay informed about developments and provide ongoing support to our clients.