Directions issued to financial services businesses

Money Laundering and Weapons Development (Directions) (Iran) (Jersey) Order 2015 (MLWD Iran Order) - not in force

On 16 January 2016, the European Council lifted all nuclear-related economic and financial EU sanctions against Iran following verification by the International Atomic Energy Agency that Iran had implemented all nuclear-related measures agreed in a Joint Comprehensive Plan of Action. Consequently, the Minister for External Affairs decided not to re-enact the MLWD Order, which expired on 14 January 2016.

The UK government has published information relating to Iran which Industry may find useful:

  • Revised Guidance: Doing business with Iran
  • The HM Treasury Financial Sanctions Notice on Iran (Nuclear Proliferation).

Caution is still required in dealing with Iran: whilst economic and financial sanctions are lifted, there remain some import and export restrictions, a number of individuals and entities remain subject to restrictive measures, and a number of Iranian entities also remain listed for human rights and terrorism concerns.

Money Laundering and Weapons Development (Directions) (Jersey) Law 2012 (MLWD Law)

On 13 January 2012, the MLWD Law came into force. The MLWD Law provides the Island with additional safeguards in respect of money laundering, terrorist financing and the development or production of weapons, by introducing powers similar to those contained in Schedule 7 of the Counter-Terrorism Act 2008 (UK legislation).

Under the MLWD Law the Minister has the power to give a direction to a person carrying on a financial services business in or from within Jersey, or to any legal person that is established under Jersey law that is carrying on financial services business in any part of the world (referred to as a relevant person).

Directions can be given generally, by Order, to all relevant persons or to a specific category of relevant persons. A direction may also be given to a particular relevant person who must comply with the terms of the direction.

A direction may be given if one or more of the following conditions are met in relation to a country or territory outside Jersey, namely the:

  • FATF advises there is a risk of money laundering or terrorist financing in a country or territory
  • The Minister reasonably believes that there is a risk that there is money laundering or terrorist financing in a country or territory, by the government of a country or territory, or by persons resident, or incorporated in a country or territory, that poses a significant risk to Jersey
  • The Minister reasonably believes that the development or production of weapons in a country or territory, or anything that facilitates such development or production, poses a significant risk to Jersey.

In relation to transactions or business relationships with the government of, or a person connected to, a particular country or territory, a direction can require a relevant person, to:

  • undertake enhanced due diligence measure
  • provide information and documents
  • limit or cease a business relationship.

Failure to comply with a direction is a criminal offence. No offence is committed where there is evidence that a relevant person failed to comply with a direction but took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with, including following any relevant guidance or code of practice.