PRESS RELEASE 23 November 2006
Consultation on Draft Legislation to effect the oversight of Money Service Businesses
(Bureaux de change, money transmitters and cheque cashers)
The Commission has today re-commenced a public consultation exercise on draft legislation to introduce an oversight regime for money service businesses (bureaux de change, money transmitters and cheque cashers).
Whilst money service businesses are already required by the Money Laundering (Jersey) Order 1999 (“Money Laundering Order”) to have systems and training to forestall and prevent money laundering, there is no body responsible for ensuring that such businesses implement the requirements of the Money Laundering Order effectively.
The absence of such an oversight regime puts the Island at variance with international standards issued by the Financial Action Task Force on Money Laundering (“FATF”). This deficiency was noted by the International Monetary Fund (“IMF”) in its 2003 assessment on the supervision and regulation of the financial sector in Jersey. The Island’s compliance with the FATF’s recommendations on (amongst other things) the oversight of money service business will be re-assessed by the IMF in early 2008.
The aim of the legislative proposals described in the consultation paper is to provide a mechanism for the oversight of money service businesses in line with international standards.
Those persons carrying on the following activities will be affected to some extent by the proposed legislation:
- Foreign currency exchange. This will include post offices, travel agents, and hotels.
- Money transmission (or any representation of money, such as travellers’ cheques). This will include banks and those offering money transfer services, including some issuers of electronic money.
- Third party cheque cashing. This will include shops that, by arrangement with a bank, cash cheques made payable to customers, e.g. cashing pay cheques.
The Commission’s proposals do not cover the following activities: accepting payment for goods and services and tendering change in the same or a different currency, nor “cash-back” services offered by retailers.
The Commission’s intention is that only the largest providers of money service business will have to seek the prior authorisation of the Commission to carry on money service business. To achieve this, the Commission is proposing an exemption that will allow a person with money service business turnover (see footnote 1) at or below a prescribed amount (currently a figure of £50,000 is suggested in the consultation paper) to lawfully carry on money service business after simply notifying the Commission of its intention to do so.
The consultation paper can be viewed on the Commission’s website www.jerseyfsc.org and paper copies obtained from the Commission’s reception area or the Jersey Library.
The Commission would welcome input from interested parties. Responses should be submitted by 1 February 2007.
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For further information, please contact:
Andrew Le Brun
Director – International & Policy Division
Jersey Financial Services Commission
Tel: + 44 (0) 1534 822065
Fax: + 44 (0) 1534 82201
1 Money services business turnover will be defined as the cumulative total during a financial
period of all or any of the following:
• foreign currency bought or sold by a person who carries on the business of a bureau de change;
• funds transmitted or received by a person who carries on the business of transmitting or receiving funds by wire or other electronic means, or money transmission services;
• cheques cashed by a person who carries on the business of providing cheque cashing services,
measured in sterling in accordance with generally accepted accounting principles.