This industry update is more than 1 year old

Industry update

Reminder regarding risk in customer relationships associated with Russia and Belarus

On 18 March, we issued a joint-risk statement with the Government of Jersey which stated: “Given the substantially heightened risk and changing measures, the Government of Jersey and the JFSC consider that at the current point in time, if a regulated financial services business was considering a new ongoing Russia or Belarus-associated customer relationship, it may not be possible to adequately mitigate the risk of sanctions evasion. Regulated entities should discuss any matters of this nature with the firm’s supervisor where there is any concern.”
 
We are aware that the vast majority of supervised persons have taken account of the risk statement. However, we wish to remind supervised persons of the risk statement, and to stress that it may not be possible to adequately mitigate the risk of sanctions evasion when considering a new business relationship, including those seeking to be transferred from other service providers. Supervised persons who are considering new business relationships that have connections to Russia or Belarus should pay particular attention to the rationale for the new business. For example if the answer to any of the following questions is yes, or is in doubt, we would not expect such new business to be taken on:

  • Is the underlying rationale for the new business driven by the imposition of non-Jersey sanctions measures?
  • Is the underlying rationale for the new business driven by a desire to avoid or evade potential future sanctions measures?
  • Is the underlying rationale for the new business driven by an intent to avoid scrutiny by law enforcement agencies anywhere in the world?

If supervised persons do proceed with new business relationships that have connections to Russia or Belarus, they must be particularly alert to ensuring the adequacy of their risk management systems in light of the heightened and complex risk of such clients, and able to demonstrate this on request.

We would also like to take this opportunity to express our gratitude to Industry for its ongoing efforts in support of the implementation of Targeted Financial Services over recent weeks.
 
Furthermore, we have been pleased to see Island businesses responding to our special data requests in a timely way, and fulfilling their reporting obligations to Island Agencies including the Minister for External Relations and Financial Services, the Jersey Financial Intelligence Unit, and the JFSC, as appropriate to their circumstances.