The Bailiwick of Jersey: National Risk Assessment of Terrorist Financing document says that the Island has ‘largely adequate’ systems in place to tackle the risk but ‘additional action is required to test and strengthen existing controls’.
The report was produced by the government in response to the requirements of the Financial Action Task Force, a body founded by the G7 group of countries to combat money-laundering.
It recommends that both the Island’s public and private sectors should develop ‘a more robust skills base to identify, investigate and supervise compliance with terrorist-financing requirements’.
External Relations and Financial Services Minister Ian Gorst said the government team that had carried out the work had deliberately been ‘conservative’ with its ranking.
‘The reason we are conservative and we are confident in that approach is that the international standard setters want us to show them how we have arrived at these assessments,’ he said.
‘If we were giving ourselves ten out of ten we would fail at the first hurdle when those assessors set foot on our soil and look at the work we’ve done.
‘There’s absolutely no benefit in us being overly positive.’
He added: ‘Over the next 18 months, work will be done to determine if the medium-low rating could be lower, and Jersey’s finance industry is likely to be asked to provide additional data to that end.’
George Pearmain, the government’s director of financial crime strategy, said that the Island aimed to be at the forefront of international standards.
‘We see only a future for finance centres who uphold international standards and those standards are getting harder,’ he said.
‘That’s where we position our regime and that is the advice that is provided to ministers.
‘Jersey drives business on the fact that we are upholding international standards and good co-operators.’
A similar report on the risk of Jersey enabling money laundering was published in September and also found that action was needed to improve standards in certain areas.
Sub-sectors of the finance sector which were considered to be at the highest risk of exposure to money laundering, according to the report, included trust and company service providers, banks, funds businesses and investment firms.
The new report on terrorist financing was produced by the National Risk Assessment Working Group, which included officers from the Government of Jersey, Jersey Financial Services Commission, Law Officers’ Department, the States police, Jersey Overseas Aid, Jersey Customs & Immigration Service, and the Office of the Jersey Charity Commissioner.
It was compiled using a methodology produced by the World Bank, enhanced by documents produced by the Financial Action Task Force as well as work conducted between Jersey and other international finance centres.
