Finance industry will face increased scrutiny and regulation next year, says Chief Minister

Speaking at a seminar on economic crime on Tuesday, Senator Ian Gorst said that both Jersey and Guernsey were currently undergoing assessment by Moneyval – a body of the Council of Europe that monitors anti-money laundering measures and the financing of terrorism – that would have an ongoing effect over the next five years.

He told a packed audience at the Hotel de France, gathered for the Jersey International Business School’s 11th annual Compliance and Economic Crime Symposium, that the conclusions of the assessment would be published early next year and would be ‘a key influence’ on Jersey’s global reputation.

‘This assessment has taken a lot of effort to prepare and stays in place until 2021. It will have far-reaching consequences,’ he said.

Senator Gorst said that the Financial Crime Strategy Group, chaired by his department, had seen the first draft of the 500-page report in May and since then had held ‘intensive’ meetings in Strasbourg, resulting in the agreement to ‘significant amendments’.

The next stage, he said, would be a Moneyval meeting in December involving 33 countries, adding that for each of the recommendations the industry would need to put action plans in place.

Two further important projects are also planned for next year, the Chief Minister said.

The first, a national risk assessment requirement, will involve professionals from the World Bank who had been taken on to help the Island through the process.

In addition, legislation for the fourth anti-money-laundering directive was required to be in place nationally in 2017. Senator Gorst said that the Island authorities had already been involved throughout through the Channel Islands/Brussels office, with changes to the law required if Jersey was to maintain equivalent standards.

The Chief Minister – who last week visited China with a Jersey Finance delegation – also stressed that financial services was a vital component of the economy, last year providing 51 per cent of economic activity and now employing 12,700 people, which enabled the States to make the investments in health and education that it needed.

‘I am confident that our broad-based industry will help us to grow the economy and insulate ourselves from global uncertainty,’ he said.

Meanwhile, Barry Faudemer, director of enforcement at the Jersey Financial Services Commission, also spoke at the conference and advised businesses to be ‘open and candid’ with the commission to avoid penalties.

Mr Faudemer gave his personal thoughts on what steps businesses can take to avoid civil penalties.

These included carrying out detailed risk assessments of customers, identifying and dealing with problems as early as possible and if there is an issue, going to the commission with a plan to resolve it.

• The JFCU is a combined team of 28 staff from the States police and Customs and Immigration. The staff are made up of a lawyer, accountant, financial crime analysts and administrative staff
• Their role is to combat all manners of economic crime from fraud to money laundering and terrorist financing
• The unit has three core areas; crime investigation, drugs trafficking and financial intelligence or operations
• 80 per cent of cases involve foreign jurisdictions