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

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.

On January 30, 2022, the Proceeds of Crime (Amendment No.6) (Jersey) Law 2022 was enacted, ushering in significant changes to Jersey's anti-money laundering (AML) framework. This amendment removed all registration exemptions within Jersey's money laundering regime, broadened the scope of Schedule 2 of the Proceeds of Crime Law to encompass business activities that were previously outside its purview, including directors. Entities now obligated to register for AML supervision were granted a transitional period that extended until June 30, 2023.

Shortly thereafter, the Jersey Financial Services Commission (JFSC) recognized the need for enhanced clarity concerning the new requirements outlined in Schedule 2, particularly regarding exemptions and transitional rules for private trust companies and family offices. Consequently, the registration deadline for directors and family offices was extended to August 31, with the aim of providing them with a more comprehensive understanding of their new obligations. However, by the end of June, the registration deadline was further pushed to September 30. This extension was implemented to ensure that these newly encompassed sectors, primarily comprised of individuals, are well-informed about their registration requirements.

Now, Jersey authorities have taken more extensive measures to address these challenges. Elaine Millar, the Assistant Chief Minister responsible for financial services, intends to issue an order pertaining to the ongoing obligations of previously exempt directors who, due to the recent changes, are now required to register as Schedule 2 businesses. This order will exempt these directors from certain typical AML obligations that are deemed irrelevant to their duties. Such exemptions include the obligation to conduct risk assessments, maintain policies and procedures, and appoint separate money laundering reporting and compliance officers. This policy shift aims to ensure that the AML framework is implemented in a proportionate, effective, and risk-based manner while aligning with international standards.

The exemption order is slated to take effect on September 30, the day before the new regime becomes applicable to directors. It will remain in force for a year.

Nevertheless, some uncertainty persists regarding potential further amendments to the AML framework for private trust companies. The Jersey government is engaged in discussions with the JFSC regarding this matter, and an official announcement about the outcome is expected in the early part of this month.

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