Registry high-risk and sanction information

Establishing legal persons or arrangements to facilitate restructurings with pre-existing subsidiaries located in jurisdictions that are targeted by sanctions measures

Entities registered in Jersey are legally required to comply with the Jersey sanctions framework.

Failure to comply with Jersey’s sanctions framework is a criminal offence. A person guilty of an offence is liable on conviction to up to 7 years imprisonment and/or a fine.

Any dealings with persons or legal entities subject to sanctions applied in Jersey or which contravene UK foreign policy are outside of our National Risk Appetite. See Jersey’s Statement on Financial Services and Financial Crime: Activities, Risk Appetite and Mitigation - Government of Jersey.

Strong sanctions compliance systems and controls prevent sanctions breaches and evasion by adapting to the evolving sanctions landscape and changing risk exposures. See further guidance on sanctions compliance in Jersey:
Sanctions — Jersey Financial Services Commission
Sanctions - Government of Jersey

Our Registry has received submissions for the registration of legal persons and/or arrangements to facilitate the restructuring of group entities that hold subsidiaries, and/or where activity is conducted in, jurisdictions that are subject to sanctions measures. We recognise there are occasions where the indirect acquisition of these entities is incidental to a wider restructuring transaction and does not necessarily constitute the core purpose of a proposal.

Whilst the risk of breaching Jersey’s sanctions regime remans high in this scenario, we acknowledge:

• occasions where foreign group-owned entities conducted activity prior to the implementation of targeted sanctions measures
• the possibility to facilitate a restructuring transaction in such a scenario, whilst also ensuring compliance with Jersey’s sanctions framework

If such a transaction is proposed, we expect, at minimum, the following information to be included in the incorporation/registration submission (within the submission or as an additional document attached to the submission):

1. full details of the proposed transaction
2. a group structure chart where the relevant entities are highlighted
3. in the context of a holding company, the Jersey entity’s ownership/proposed ownership percentage in the group
4. details of the type of activity conducted by the entities domiciled in the targeted jurisdiction
5. the value of the group’s turnover (expressed as a percentage) that is/was attributable to the entities domiciled in the targeted jurisdiction
6. if applicable, details of when the entity’s/ies’ activity ceased
7. whether any designated person is present within the group
8. if property continues to be held in the foreign entities, an approximation of the value of the holding
9. confirmation whether a sanctions licence and/or exception of any kind has been sought from The Minister for External Relations in Jersey, and details of the outcome of such engagement with the Minister (if applicable)
10. confirmation that the latest published Sanctions guidance has been appropriately considered and applied in all applicable aspects
11. details of how ongoing sanctions compliance risk is being managed which may include freezing arrangements, the long-term strategy concerning the extraction of property (if applicable), details of any moratorium imposed on activity, or other arrangements that are employed
12. the measures taken to ensure that no funding (direct or indirect) is provided to any entity located in the targeted jurisdiction (this with point 11 forming so called “ring fencing arrangements”)
13. how the board and/or managers of the new Jersey entity are managing the ongoing sanctions risk. We will specifically consider the oversight arrangements employed by Jersey resident directors or managers to ensure ongoing compliance with sanctions requirements. It is unlikely that we will permit the establishment of a legal person or arrangements where a director or manager is not provided by a principal person of a trust company business licensed by us.

The above list is not exhaustive, and we reserve the right to request any further information that we consider useful as part of our review.

The above steps will be considered in response to a group restructuring whereby the relevant foreign entities are already held in group. The Registry will not consider steps whereby foreign entities are to be transferred from a targeted jurisdiction into a group holding structure (introducing new risk as opposed to managing risks that are already present and where indirect acquisition is incidental to the wider purpose of a proposed transaction).

It is possible that certain conditions will be applied to any COBO consent granted, in accordance with our statutory rights under Part 3 of the Control of Borrowing (Jersey) Order (1958).

Service level agreements

Given the severity of risks associated with sanctions compliance, any application presenting the characteristics described above will fall outside of all our published service level agreements (SLAs), and submission should be made under our 5-day SLA.

Any alternative approach will carry the risk that any fast-track premium will not be refunded.