Is my organisation a non-profit organisation and what does this mean?
Globally, it is recognised that non-profit organisations (“NPOs”), including registered charities, may be exploited to raise and move funds to support terrorist activity. Jersey is proud to have a thriving and diverse NPO sector and must endeavour to protect it from terrorist exploitation, both as a critical component of the global fight against terrorism as well as to preserve the integrity of the sector and the trust of our donor community.
Ultimately, the JFSC does not wish to interfere or add unnecessary burden to the NPO sector which is a vital contributor to society and its members, not just in Jersey but also in the world economy, providing important services and functions which enhance the quality of life for many.
A representative for a non-profit organisation in Jersey should ask two questions:
- Step 1. Does my NPO need to register with the JFSC?
- Step 2. If so, will my NPO be considered Prescribed and be subject to additional requirements?
This page looks at these two questions in turn and provides guidance for NPOs on what steps should be taken.
Is your organisation an NPO and what that means in practice
Step 1: Does my NPO need to register?
Not all NPOs need to be registered with the JFSC. NPOs only need to register if they meet the following definition:
A legal person or arrangement or organisation that primarily engages in raising or disbursing* funds for purposes such as charitable, religious, cultural, educational, social or fraternal purposes, or for the carrying out of other types of good works?
Raising - funds given to the NPO but does not include income earned on the funds of the NPO or amounts paid to the NPO by persons to become or remain members of the NPO
Disbursing – does not include the disbursement of funds paid to the NPO by persons to become or remain members of the NPO if those funds are applied in a way that only benefits members of the NPO. A disbursement also does not include a payment for goods and services. A payment is when you send funds for a specific agreed value for goods or services, where a disbursement is a transfer of money to a beneficiary to fulfil the objects of the organisation”.
If your NPO meets the above definition then it is required to register with the JFSC. You can register via the myJFSC portal. Further details on the registration process can be found via the Registration section of the JFSC website.
NPOs that fall outside of the above definition do not have to register with the JFSC and no further action is required. However, these NPOs can still register if they wish to in order to obtain an NPO number.
NPOs who are already registered with the JFSC do not need to complete a further application form.
Step 2: Is my NPO Prescribed and subject to additional requirements?
It is important to note that just because an NPO is required to register does not mean the NPO is then automatically subject to supervision by the JFSC.
After determining that your organisation is considered an NPO and making your application to the JFSC in Step 1, the next step is to determine whether your NPO will be considered a Prescribed NPO. The definition of a Prescribed NPO can be found in Article 1 of the Non-Profit Organisations Order. The Order sets out the definition as below:
"...a prescribed NPO is an NPO that, during the preceding 12 months, has –
- raised funds exceeding £1,000 from outside Jersey, Guernsey, the Isle of Man, England and Wales and Scotland; or
- disbursed funds exceeding £1,000 outside those jurisdictions.
If your NPO meets this definition it will be classified as a Prescribed NPO and will be subject to additional requirements and supervision by the JFSC.
If you are a Prescribed NPO, and are now considering stopping your activity due to concerns, get in touch to discuss this further. It is important to us that your good work is not impacted and we would value the opportunity to discuss with you prior to any action being taken.
A Prescribed NPO - What does this mean in practice?
If your NPO falls within the definition of a Prescribed NPO it will be required to meet certain additional requirements. The additional requirements are detailed within the Non-Profit Organisations Order, and formalise measures that may already be in place as part of your NPO’s good governance.
A brief outline of the requirements as stated in the Order can be seen below:
- Article 2 - To prepare an annual financial statement
- Article 3 - To have appropriate accounting systems and controls in place
- Article 4 - To keep records of owners, controllers etc. sufficient to identify them
- Article 5 - To keep a record of significant donors
- Article 6 - Take reasonable steps to identify other NPOs with whom your NPO may be working, the beneficiaries, activities, and the nature of the relationship
To assist NPOs with the implementation of the requirements under the Order, the JFSC has developed an NPO specific section of the Handbook for the prevention and detection of money laundering and the countering of terrorist financing (the Handbook). The Handbook provides in-depth, best practice guidance on how an NPO may implement the requirements of the Order. Further information can be located on the Prescribed NPO Handbook section of the JFSC website.
Prescribed NPOs will be subject to supervision by the JFSC on a risk-based approach, with a focus on those NPOs that may be at a higher risk of being abused or misused for terrorist financing purposes.
Jersey Registered Charities
NPOs are distinct from charities. Whilst all charities are NPOs, not all NPOs are charities. Charities are governed by the Charities (Jersey) Law 2014. There is a test in the law to establish whether or not you are a charity.
Both the JFSC and the Office of the Charities Commissioner maintain registers. The Office of the Charities Commissioner ultimately supports public confidence in charities and their work, whereas the JFSC focuses on managing the risk of NPOs being abused for terrorist financing purposes.
Useful legislation and guidance
Non-Profit Organisations (Prescribed NPOs - Additional Obligations) (Jersey) Order 202-
Non-Profit Organizations (Jersey) Law 2008 (jerseylaw.je)
Handbook for the prevention and detection of money laundering and the countering of terrorist financing
Section 17 - Prescribed Non-Profit Organisations
National Risk Assessment of Non-Profit Organisations (gov.je)
National Risk Assessment of Terrorist Financing (gov.je)