Anti-Money Laundering Policy and Procedures
LIST OF CONTENTS
The Anti-Money Laundering Policy
1.
The Policy
2.
What is Money Laundering
3.
Money Laundering and Terrorism
4.
What is Terrorism?
5.
Why are Law Firms at Risk?
6.
Non-compliance
The Anti-Money Laundering Procedures
Section A - The Procedure
1.
Introduction
2.
Key Individuals and Responsibilities
3.
Risk Assessment and Management
4.
Client Due Diligence measures and Ongoing Monitoring
5.
Enhanced CDD (PEPs)
6.
Simplified CDD
7.
Monitoring Client/Matter Activity and Transactions
8.
Reporting
9.
Monitoring and Management of Compliance
10.
Vetting and Training
11.
Record Keeping Procedures
12.
Openness
Section B - Department Specific
1.
2.
Department Specific Considerations
A.
Private Client Work
B.
Property Work
C.
Company and Commercial Work
D.
Litigation Work/ Family
Firm’s Accounts
Section C - Laws and Offences
1.
Money Laundering (Jersey) Order 2008 (as amended)
2.
Proceeds of Crime (Jersey) Law 1999 (as amended)
3.
Drug Trafficking Offences (Jersey) Law 1988 (as amended)
4.
Terrorism (Jersey) Law 2002 (as amended)
Section D – Glossary
Definitions
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THE ANTI-MONEY LAUNDERING POLICY
1.
THE POLICY
1.1
The firm's Policy is:

To maintain risk sensitive procedures of internal control and communication as may be
appropriate for the purposes of forestalling, preventing and detecting the firm being used
in any matters which might concern money laundering. This will include the application
of client due diligence measures and ongoing monitoring in respect of its clients and
record keeping procedures.

To comply with the requirements of the relevant anti-money laundering and countering
terrorist finance legislation, including the Money Laundering (Jersey) Order 2008 as
amended (“MLO”).

To follow best practice guidance produced by any relevant bodies or organisations on
money laundering and terrorist financing including the Jersey Finance Services
Commission (“JFSC”) handbook for the prevention and detection of money laundering
and the financing of terrorism for the legal sector (“Handbook”).

To monitor and manage these systems and procedures by keeping them under review
on an appropriate basis, including ongoing evaluation of the firm's risk profile.
1.2
Whilst the MLO applies specifically to those who provide legal (or notarial) services to third
parties when participating in financial or immovable property transactions as set out in article
3(9) of the MLO, the principal money laundering offences under the Proceeds of Crime (Jersey)
Law 1999 as amended (“POCL”) and the Terrorism (Jersey) Law 2002 as amended (“TJL”)
apply regardless of the type of work being handled.
1.3
The firm has conducted a risk assessment of its work and client base. Having done so, and
adopting a risk sensitive approach, it has been determined that the firm's Policy and these
Procedures will apply to all work undertaken by the firm. This will be the subject of ongoing
review and assessment with reference to the Handbook current at the time and the firm's
ongoing risk based approach.
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WHAT IS MONEY LAUNDERING?
2.1
Money laundering is generally defined as the process by which the proceeds of crime, and the
true ownership of those proceeds, are changed so that the proceeds appear to come from a
legitimate source.
2.2
The relevant money laundering offences can be found in the POCL and the TJL.
2.3
The MLO sets out a regulatory framework for organisations with which they must comply to
enable them to forestall, prevent and detect money laundering. Failure to comply with the MLO is
a criminal offence under article 37(4) of the POCL.
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MONEY LAUNDERING AND TERRORIST FINANCE
3.1
In some jurisdictions, including Jersey, the anti-money laundering legislation also covers issues
of terrorist financing. The MLO requires that our money laundering systems and procedures
include the risk of the firm being used in a matter which may concern terrorist financing. This is
sometimes referred to as CTF, or countering terrorist financing.
3.2
Although the firm's Policy and Procedures are entitled 'Anti-Money Laundering Policy and
Procedures' they equally apply to any suspicions relating to terrorist financing. Any suspicion of
this should be reported without delay to the firm's Money Laundering Reporting Officer.
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WHAT IS TERRORISM?
4.1
Terrorism is defined as the use or threat of action which involves serious violence against a
person, serious damage to property, the endangering of life or the disruption of an electronic
system, in circumstances where the use or threat is designed to influence a government or
intimidate a section of the public for the purpose of advancing a political, religious or ideological
cause.
4.2
The relevant terrorism offences can be found in the TJL.
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WHY ARE LAW FIRMS AT RISK?
5.1
It is difficult to be precise about methods of money laundering or, indeed, its true scale.
International specialist bodies, including the Financial Action Task Force, have suggested that
property and business purchases are particularly common methods, where methods can be
identified, but money launderers are particularly inventive and always looking for new ways in
which to ply their trade. These methods will usually involve the use of professionals and hence
law firms can be targeted.
5.2
Money launderers do not discriminate; they will target small, medium and large practices, and so
law firms of all shapes and sizes need to remain alert to the possibilities and take care to
recognise anything suspicious.
5.3
The Handbook, in section 1 (Introduction) provides:
The inter-governmental agencies and international standard-setting bodies have recognised
the access that professionals provide for their clients to financial services and products, and
have extended the scope of the international standards and recommendations to cover
lawyers and accountants - often referred to as 'gatekeepers'. As a well-regulated jurisdiction
operating in the international financial arena, Jersey must adopt the international standards to
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guard against money laundering and terrorist financing and integrate the requirements into
the legal and regulatory system.
Lawyers are key professionals in the business and financial world, facilitating vital
transactions that underpin Jersey's economy. As such, they have a significant role to play in
ensuring that their services are not used to further a criminal purpose. As professionals,
lawyers must act with integrity and uphold the law, and they must not engage in criminal
activity'.
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NON-COMPLIANCE
6.1
The consequence of non-compliance with the firm's Policy and Procedures and/or any of the
anti-money laundering provisions under the MLO (and, by extension, the Handbook), POCL and
TJL could lead to the implementation of a formal investigation by the JFSC and/or the Jersey
Financial Crimes Unit and the possible imposition of regulatory sanctions upon, and criminal
prosecution of, the firm and its partners and relevant employees (which could result in an
unlimited fine and imprisonment). The firm's reputation would be severely harmed in the process.
6.2
The failure by an individual of the firm to comply with the firm's Policy and Procedures is also a
disciplinary offence under the firm's disciplinary procedures.
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THE ANTI-MONEY LAUNDERING PROCEDURES
SECTION A - THE PROCEDURES
1.
INTRODUCTION
1.1
Overview
In accordance with our Policy and the requirements of the Money Laundering (Jersey) Order
2008 as amended (“MLO”), the firm has the following Procedures:

Appointment of a Money Laundering Compliance Officer and Money Laundering
Reporting Officer.
1.2

Risk assessment and management.

Client due diligence measures and ongoing monitoring.

Monitoring client/matter activity and transactions.

Reporting money laundering and terrorist financing activity and transactions.

Monitoring and management of compliance.

Vetting and training.

Record keeping
Scope of Policies
Although the MLO requires policies and procedures to be put in place in respect of legal (and
notarial) services to third parties when participating in financial or immovable property
transactions as set out in article 3(9) of the MLO, adopting a risk sensitive approach and having
regard to risk assessment, the firm's Policy (at paragraph 1.3 of the Policy) states that the firm
will apply the policies across all areas of work, regardless of whether or not it falls within the
MLO.
1.3
The relevant Law and Standards
The relevant legislation and standards are:

The Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008.

The Proceeds of Crime (Jersey) Law 1999 as amended (“POCL”).

The Terrorism (Jersey) Law 2002 as amended (“TL”).

Drug Trafficking Offences (Jersey) Law 1988 as amended.

MLO.

The Jersey Financial Services Commission handbook for the prevention and detection of
money laundering and the financing of terrorism for the legal sector (“Handbook”).
Copies of the relevant sections of the legislation appear in Section C of these Procedures and
the Handbook.
2.
KEY INDIVIDUALS AND RESPONDIBILITIES
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2.1
The firm's partners are responsible for complying with the requirements of the MLO and for the
firm's Policy and Procedures. This includes:

Identifying the firm's money laundering and terrorist financing risks.

Ensuring that its systems and controls are appropriately designed and implemented to
manage those risks.

2.2
Ensuring that sufficient resources are devoted to achieving these objectives.
The firm has an obligation to appoint and maintain key individuals in designated roles as part of
its system of internal control to forestall, prevent and detect money laundering. The roles are:
2.3

The Money Laundering Reporting Officer (“MLRO”).

The Money Laundering Compliance Officer (“MLCO”)
Although the partners are responsible for the firm's money laundering compliance the MLCO
monitors the firm's compliance with the Policy and Procedures to help ensure their effectiveness.
The MLCO also manages the procedure in relation to client due diligence measures (“CDD”) set
out in paragraph 4 below, and queries regarding CDD issues should be addressed to the MLCO.
The current MLCO is Agnieszka Blaszczyk. In her absence you can contact Andrew Pinel who
will assume the role.
2.4
The role of the MLRO is to receive reports from any member of the firm regarding suspicious
activities or other matters which may concern money laundering or terrorist financing. The
legislation includes all partners and staff and any one with concerns or who is unsure about
money laundering issues should seek assistance from the MLRO without delay. The current
MLRO is Agnieszka Blaszczyk. In her absence you can contact Andrew Pinel who will assume
the role.
3.
RISK ASSESSMENT AND MANAGEMENT
3.1
Firm’s Risk Assessment
In order to arrive at policies and procedures which are appropriate and risk sensitive, the firm
has undertaken an overall risk assessment review of its clients and practice areas and has
followed relevant guidance adopting policies and procedures addressing the conclusions of the
assessment. Risk will continue to be assessed in this way and the appropriateness reviewed in
accordance with paragraph 9 below.
3.2
Risk Assessment on Client/Matter Engagement
In addition to a firm wide risk assessment, risk assessment must be undertaken on a matter by
matter basis on client/matter engagement. This requires those involved in the client/matter
engagement process to undertake a risk assessment when taking on a new client or matter.
Risk categories are divided into Higher Risk, Standard Risk and Lower Risk.
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Guidance on each of these categories is provided in these Procedures and will be reviewed on
a regular basis. Section 4.3 of the Handbook contains additional guidance. Section B of these
Procedures contains some department-specific guidance.
3.3
Higher Risk Category
Each CDD Form requires fee earners to input the appropriate level of CDD information for each
client. As part of the process, fee earners need to highlight any client or matter which falls within
the Higher Risk category. The table below provides pointers on what might constitute a Higher
Risk matter. It is not exhaustive. If a fee earner considers that there are other factors not listed
which elevate risk, mark the matter as Higher Risk and provide the additional Higher Risk
indicators to the MLCO who may then add them to the list.
The following matters are classified as Higher Risk category and/or should give cause for
concern:
All clients:

Inexplicably complicated transactions.

Transactions that are unusually large for the particular client.

Unusual instructions where there is little or no rational or logical reason.

Loss-making transactions where the loss is avoidable.

Unusual patterns of transactions which have no obvious economic or other legitimate
purpose.

Dealing with money or property when there are suspicions that it is being transferred to
avoid the attention of a revenue authority, a law enforcement agency or a liquidator/
trustee-in-bankruptcy/ the Viscount/ creditors.

Politically Exposed Persons (“PEPs”) (see paragraph 5 below).

Significant cash payments are involved.

Payments that are to be made to, or received from, third parties with no obvious
connection with the transaction.

Excessively obstructive or secretive or evasive clients.

Reluctance on a client's part to provide the requested CDD information.

Client has significant business dealings in Higher Risk jurisdictions.

Unregulated cash businesses habitually dealing in substantial amounts of cash.
And corporate clients:

Where a company is listed or registered in a Higher Risk jurisdiction.

Where there is a High Risk business (which includes energy and construction),
particularly where coupled with a Higher Risk jurisdiction, be alert to the possibility of
corruption. Are there links with PEPs?

Where there is a business with no obvious or legitimate source of profits.

Where there is a company involved which has bearer shares or an inexplicably complex
ownership structure.

Inexplicably complex trust structures.
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And individual clients:

Individuals for whom the firm does not handle all their legal affairs. Consider whether this
is logical or could they be spreading their affairs between firms to avoid one professional
having a picture of all of their dealings?
3.4
Lower Risk Category
Without limitation, the following clients may be considered to be Lower Risk, but always take
account of any concerns you have on a matter by matter basis:

A client entity that is regulated by the JFSC or is an equivalent financial services
business in an equivalent jurisdiction.

A body corporate whose securities have been admitted to trading on a regulated market,
or is a subsidiary of a body company whose securities have been admitted to trading on
a regulated market.

3.5
A Jersey public authority.
Standard Risk Category
All clients and matters not constituting Higher Risk or Lower Risk.
3.6
Ongoing Assessment
It is imperative that the risk assessment is constantly reviewed during the retainer and it may
be appropriate to amend the risk profile as matters progress.
The following matters will lead to a Higher Risk category and/or should give cause for concern:

A client deposits funds into the client account but then ends the transaction for no
apparent reason.

A client advises that funds are coming from one source and at the last minute the source
changes.

A client unexpectedly requests that money received into a firm's client account be sent
back to its source, the client or to a third party.
4.
CLIENT DUE DILIGENCE MEASURES AND ONGOING MONITORING
4.1
CDD measures will be carried out in respect of all clients when taking on a new client or matter.
Ongoing monitoring of all client business relationships will also be carried out.
4.2
The CDD procedures must be undertaken before the firm provides the legal advice/ assistance.
4.3
There is an exception: where urgent advice/ assistance is required and there is little risk of
money laundering such advice/ assistance may be given prior to completing the CDD
requirements so long as the CDD is received as soon as reasonably practicable.
9
4.4
The general requirements of CDD and guidance on the type of CDD information required for
each client entity are incorporated into the firm's CDD Forms and in the Handbook. There are
eight types of CDD Form which shall be used by the firm:

CDD Form CL
for clients that are Companies or other entities: Lower
Risk.

CDD Form CS
for
clients
that
are
Companies
or
other
entities:
Standard Risk and Higher Risk.

CDD Form I
for clients that are individuals; or for use with CDD Form CS
(pertains to CDD on directors/ partners/ etc. of clients that are
companies or other entities: Standard Risk and Higher Risk)).

CDD Form R
for clients that are Regulated entities.

CDD Form T
for Trustees which are not Regulated entities (in Jersey).

CDD Form W
a form of Written assurance. There are two types of CDD
Form W: (1) for use in respect of a Jersey intermediary; and
(2) for use in respect of a UK intermediary.

CDD Form X
for matters where there is no suspicion of money laundering.

Equivalent Certificate
this is the Equivalent Intermediary/Introducer Certificate as
prepared by the JFSC.
4.5
By completing the appropriate CDD Form/s, it is the firm's intention that it should assist the fee
earner in addressing CDD requirements on a risk sensitive basis and help him/her remain
aware of the information which needs to be obtained. It should also highlight client types to
whom enhanced or simplified due diligence requirements apply. The fee earner should always
remain aware of additional risks which suggest themselves during the process or throughout
the client relationship. Any queries on any aspect of compliance should be referred to the
MLCO.
4.6
In summary, CDD consists of:

Identifying the client and verifying the client's identity on the basis of documents, data
or information obtained from a reliable and independent source.

Identifying, where there is a beneficial owner who is not the client, the beneficial
owner and taking adequate measures, on a risk-sensitive basis to verify his identity.

Obtaining information on the purpose and intended nature of the business
relationship.
4.7
Detailed information and guidance on completing CDD for particular client entities is contained in
the CDD Form for new matters and clients.
4.8
The firm may accept certified copies of CDD paperwork so long as:

The certifier is a 'suitable certifier' pursuant to the provisions of section 5.8 of the
Handbook.
10

The paperwork has been certified in the manner specified in section 5.8 of the
Handbook.
4.9
In addition to undertaking CDD, the firm is also required to monitor client relationships on an
ongoing basis. Ongoing monitoring includes:

The scrutiny of activities undertaken throughout the course of the relationship
(including, where necessary, the source of funds) to ensure that the activities are
consistent with the relevant person's knowledge of the client, his business and risk
profile.

Keeping the documents, data or information obtained for the purpose of applying
CDD measures up to date.
4.10
All fee earners have a role to play in achieving effective ongoing monitoring of client business
relationships. This is because ongoing monitoring must be conducted by fee earners whilst
handling the retainer; the role of fee earners does not end once the relevant CDD material has
been attained and verified at the outset of instructions. Fee earners must stay alert to
suspicious circumstances which may suggest money laundering or terrorist financing.
4.11
To ensure that CDD material is kept up-to-date, it should be reviewed:

When taking new instructions from a client, particularly if there has been a gap of
over two years between instructions.

When information is received of a change in the client's details.
5.
ENHANCED CDD (PEPs)
5.1
One particular client category, PEPs, requires additional consideration and enhanced CDD
measures; it also requires prior MLCO and partner approval. The Handbook provides:
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PEPs
Politically exposed persons are individuals who are (or have been) entrusted with
prominent public functions in a jurisdiction other than Jersey, their immediate family and
close associates as defined below:
Prominent public functions include senior positions within:

the executive, legislative, administrative, military or judicial branches of a
government (elected or non elected);

a major political party;

a ruling royal family;

international and supranational organisations; or

a government owned corporation.
A relationship with a PEP includes any corporate entity, partnership or trust relationship
that has been established by or for the benefit of such individuals.
Immediate family typically includes the person's parents, siblings, spouse, children, inlaws, grandparents and grandchildren.
Close associate typically includes a person who is widely and publicly known to
maintain a close relationship with the PEP, and includes a person who is in a position to
conduct substantial domestic and international financial transactions on his or her
behalf.
A client who is an individual may be a PEP but remember that directors or partners can
also be PEPs. When the client is a PEP, the MLCO should be contacted as the firm is
required to:

Obtain approval from senior management for establishing the business
relationship;

Take adequate measures to establish source of wealth and funds involved.
6.
SIMPLIFIED CDD
6.1
Cleared Funds
Where the funds involved in a relationship:

Have been received up front (i.e. payment of account) from a bank which is a
regulated person (or is an equivalent business in an equivalent jurisdiction); and

Have come from an account in the sole or joint name of the client;
then the receipt of funds from such an account will be considered to provide a satisfactory
means of verifying the identity of a client provided that:

The service requested by the client is considered to present a very Low Risk;

The client is not considered to present Higher Risk;

All future payments must be received from an account at a bank which is a regulated
person (or is an equivalent business in an equivalent jurisdiction) where the account
can be confirmed as belonging to the client; and

No future payments may be received from third parties.
Particular care must be taken in circumstances where the client is not an individual.
12
In the event that the above conditions are breached, the identity of the client must be verified at
that time in accordance with full CDD measures.
You must obtain and retain evidence confirming that payment has been received from an
account at a bank which is a regulated person (or is an equivalent business in an equivalent
jurisdiction) and, where a request for a withdrawal or transfer to another bank account is
received, confirmation that this account is also in the client's name and held at a bank which is
a regulated person (or is an equivalent business in an equivalent jurisdiction).
If you have reason to suspect that the business is being structured to avoid standard
identification procedures you must not use this concession.
6.2
Lower value one-off transactions
Where a relationship between a client and the firm is determined to be a 'lower value one-off
transaction' within the meaning of article 4 of the MLO, verification of identification procedures
are not required unless:

You suspect money laundering or consider the transaction of Higher Risk; or

You have doubts about the veracity or adequacy of any documents, data or information
previously obtained under the client due diligence procedures.
A “lower value one-off transaction” is a transaction the value of which either in a single or linked
transactions amounts to less than 15,000 euros.
For the purposes of the MLO, the value of a transaction between a client and the firm is the
value of the underlying asset(s) to which the instruction relates (e.g. the value of assets being
settled into trust).
Where there are no underlying assets to which a value can be allocated, the value of the
transaction may be taken as the amount of fees charged to the client by the firm. Where those
fees are known at the outset to be less than 15,000 euros, verification of identity will not be
required.
However, where the transaction is considered to present a Higher Risk of money laundering full
CDD procedures must be applied.
Where, subsequently and for whatever reason, the one-off transaction looks likely to increase
in value beyond 15,000 euros (but not as a result of fluctuations in currency exchange rates) or
develop into a business relationship, you should without delay undertake verification of identity
measures.
7.
MONITORING CLIENT/MATTER ACTIVITY AND TRANSACTIONS
7.1
The firm's procedure on CDD should ensure that sufficient information about a client is obtained
to allow development of a risk assessment and profile of expected activity. This will provide a
basis for recognising unusual and Higher Risk activity or transactions, which may indicate money
laundering or terrorist financing.
7.2
Where clients or matters have been designated as carrying a Higher Risk of money laundering
or terrorist financing, additional or more frequent monitoring is required.
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7.3
The firm has to monitor client relationships and these Procedures are designed to identify and
scrutinise Higher Risk activity or transactions that may indicate money laundering or terrorist
financing activity.
7.4
In order to maintain an effective monitoring system, the firm needs to maintain up to date CDD
information and to ask pertinent questions to determine whether there is a rational explanation
for the activity or transactions identified. The scrutiny of activity and transactions may involve
requesting additional CDD information.
7.5
The firm will monitor and review instances where any exemptions are granted to policies and
procedures or where controls are overridden.
7.6
A register will be maintained to record any monitoring and instances where any exemptions are
granted to policies and procedures or where controls are overridden.
7.7
The firm's system of monitoring will be reviewed annually.
8.
REPORTING
8.1
The firm is required to maintain a system for reporting any suspicions relating to money
laundering or terrorist financing. Any suspicions or concerns must be reported to the MLRO
without delay by completing a SAR. No-one other than the MLRO may make a report to the
JFCU or other relevant authorities.
8.2
Remember:

An offence is committed if a person fails to report any knowledge or suspicion of
money laundering which comes to him/her in the course of business as soon as
practicable to the MLRO.

This requirement relates not only to information concerning the firm's clients, but
anybody at all where the information comes to the firm in the course of business.

Authorised consent to carry on acting in a transaction may be required to avoid
committing an offence.

The MLRO will determine whether a SAR will be made to the relevant authorities, and
will liaise with the fee earner or other member of staff where appropriate about any
necessary consent to proceed. All communications with the relevant authorities will be
made by the MLRO.

Once a SAR has been provided to the MLRO and the MLRO has been assisted fully
in his enquiries by the discloser the duties under the money laundering reporting
offences will have been discharged but the discloser must take care not to tip off
anyone that a report has been made. Tipping off is itself an offence that could lead to
a fine and/or imprisonment.
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
The MLRO will acknowledge in writing to the submitter safe receipt of the SAR. The
acknowledgement shall include a reminder in relation to the offence of tipping off.
8.3
No account of legal professional privilege (“LPP”) is to be taken in determining whether to make
an internal report to the MLRO. It will be for the MLRO to determine whether LPP applies as
part of his assessment as to whether a formal report to the authorities should be/can be made. It
is not a breach of LPP to report a matter to the firm's MLRO or to discuss the disclosure
requirements with him.
8.4
Senior management will notify the JFSC immediately in writing of any material failures to comply
with the requirements of the Order or the Handbook.
9.
MONITORING AND MANAGEMENT OF COMPLIANCE
9.1
The Policy and Procedures have been implemented using a risk sensitive approach.
This has included:

A detailed review of the legislation.

Risk assessment of clients.

Risk assessment of practice areas.

Country risk issues.

Consideration of other relevant jurisdictions including the UK and the requirements of
the Third EU Directive on Money Laundering.

Other available information on money laundering and terrorist financing cases,
articles and typologies, e.g. information from the JFCU, JFSC, Financial Action Task
Force.
9.2
The MLRO and MLCO will keep up to date with changes to the legislation and relevant
guidance and best practice. Relevant changes will lead to a review of the Policy and Procedures
as appropriate. In any event, the Policy and Procedures will be reviewed annually.
9.3
The MLCO will conduct a review of CDD material and ongoing monitoring twice a year to gauge
the standard of CDD measures. Any non-compliant areas or Policy or Procedural changes
required will be addressed. In addition, the time taken to complete CDD measures will be
monitored to ensure compliance. The MLCO will retain a list of issues or queries raised in
addition to details of all reports.
9.4
The partners will take all necessary steps to remedy any deficiencies identified in any review
under clauses 9.2 and 9.3.
10.
VETTING AND TRAINING
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10.1
One of the most important controls over the prevention, forestalling and detection of money
laundering and terrorist financing is to have appropriately vetted staff who are:

Alert to money laundering and terrorist financing risks.

Well trained in the identification of Higher Risk activities or transactions, which may
indicate money laundering or terrorist financing activity.
10.2
All members of staff will receive AML induction training within 10 working days of commencing
employment and further training, as required, should the role of the member of staff change
during the course of their employment. All members of staff will be provided with a copy of this
document to give them a basic understanding of money laundering and terrorist financing and
an awareness of the firm’s anti-money laundering policy and procedures. In addition, all fee
earners and their support team members will receive the additional training as detailed in
paragraph 10.3 below.
10.3
All fee earners and relevant support team members will receive regular training (and, in any
event, at least once every 2 years) to ensure that they:

Are made aware of the law relating to money laundering and terrorist financing.

Given training in how to recognise and deal with transactions and other
activities which may be related to money laundering or terrorist financing.
10.4
The firm's recruitment and induction procedures will include appropriate vetting and training
elements in relation to money laundering and terrorist financing as required by the MLO and as
set out in section 9 of the Handbook.
11.
RECORD KEEPING PROCEDURES
11.1
The firm will retain records in accordance with the requirements of the MLO. Records relating to
transactions will be retained for a period of at least five years from the date when all activities
relating to the transaction was completed.
11.2
A hard copy of the CDD material that is received will be maintained at 32 Commercial Street and
will be accessible at any time upon request to the MLCO.
12.
OPENNESS
12.1
The money laundering legislation and the firm's Policy and Procedures apply to everyone in the
firm; fee earners and support team members alike. All members of staff are encouraged to
discuss concerns about possible money laundering or terrorist financing with the MLRO.
Members of staff should never feel that they are troubling the MLRO unnecessarily. The
legislation is new and there is a learning process involved. It is better to have a brief discussion
with the MLRO and have a concern allayed than for something to be missed.
16
THE ANTI-MONEY LAUNDERING PROCEDURES
SECTION B - DEPARTMENT SPECIFIC
1.
DEPARTMENT SPECIFIC CONSIDERATIONS
What follows is not intended as an exhaustive list of pointers for the various departments of the
firm:
A.
Private Client Work
1.1
Will Writing and Administration of Estates
The firm will not undertake any legal work or advice in relation to Will Writing and Administration
of Estates.
1.2
Charities
1.2.1
While the majority of charities are used for legitimate reasons, they can be used as money
laundering/terrorist financing vehicles.
1.2.2
When acting for charities you should consider its purpose and the organisations it is aligned with.
If money is being received on the charity's behalf from an individual or a company donor, or a
bequest from an estate, you should be alert to unusual circumstances, including large sums of
money.
B.
Property Work
The firm will not undertake any legal work or advice in relation to the purchase, sale or lease of
Jersey property or land. Certain corporate instructions will involve properties or land located in
other jurisdictions. Please refer to the next section for guidance.
C.
Company and commercial work
1.1
Structures
1.1.1
The nature of company structures can make them attractive to money launderers because it is
possible to obscure true ownership and protect assets for relatively little expense. For this
reason, lawyers working with companies and in commercial transactions should remain alert
throughout their retainers, with existing as well as new clients.
1.1.2
A common operating method amongst serious organised criminals is the use of front companies.
These are often used to disguise criminal proceeds as representing the legitimate profits of
fictitious business activities. They can also help to make the transportation of suspicious cargoes
appear as genuine goods being traded. More often than not, they are used to mask the identity
of the true beneficial owners and the source of criminally obtained assets. Corporate vehicles are
also frequently used to help commit tax fraud, facilitate bribery/corruptions, shield assets from
creditors, facilitate fraud generally or circumvent disclosure requirements.
17
1.1.3
The lack of transparency concerning the ownership and control of corporate vehicles has proved
to be a consistent problem for money laundering investigations. Corporations serving as
directors and nominee directors can be used to conceal the identity of the natural persons who
manage and control a corporate vehicle.
1.1.4
Several international reports have highlighted the extent to which private limited companies, shell
companies, bearer shares, nominees, front companies and special purpose vehicles have been
used in laundering operations. Case studies submitted to the Financial Action Task Force
(“FATF”) have indicated the following common elements in the misuse of corporate vehicles:

Multi-jurisdictional and/or complex structures of corporate entities and trusts;

Foreign payments without a clear connection to the actual activities of the corporate
entity;

Use of offshore bank accounts without clear economic necessity;

Use of nominees;

Use of shell companies;

Tax, financial and legal advisers were generally involved in developing and
establishing the structure. In some case studies a lawyer was involved and
specialised in providing illicit services for clients.
1.1.5
The more of the above elements that exist, the greater the likelihood and the risk that the
identity of the underlying beneficial owner may be able to remain unidentifiable.
1.2
Shell company
1.2.1
The shell company is a tool that appears to be widely used by criminals. Often purchased "offthe-shelf" it remains a convenient vehicle for laundering money and from concealing the identity
of the beneficial owner of the funds. The company records are often more difficult for law
enforcement to access because they are held behind a veil of professional privilege or the
professionals who run the company act on instructions remotely and anonymously.
1.2.2
Shell companies are often used to receive deposits of cash which are then transferred to another
jurisdiction, to facilitate false invoicing or to purchase real estate and other assets. They have
also bee used as the vehicle for the actual predicate offence of bankruptcy fraud on many
occasions.
1.3
Bearer Shares
1.3.1
Bearer shares confer rights of ownership to a company upon the physical holder of the share.
They are commonly and legitimately used in a number of countries. However, the high level of
anonymity that bearer shares offer provides opportunities for misuse where the identity of the
shareholder is not recorded when the share is issued and transferred, ownership of the share is
effectively anonymous.
1.3.2
1.3.3
Such shares are open to two money laundering risks:

Financial assets can be acquire without the purchaser being identified.

The company owners and controllers may not be capable of being identified.
To guard against misuse, a number of jurisdictions have dematerialised or immobilised bearer
shares when they are registered in an effort to ensure that the identify of the beneficial owners
18
can be verified. Dematerialisation is achieved by requiring registration upon transfer or requiring
registration in order to vote or collect dividends. While physical transfer of bearer shares is
possible, it is believed to be rare.
1.4
Private Equity
1.4.1
This firm could be involved in any of the following circumstances:

The start-up phase of a private equity business where individuals or companies seek
to establish a private equity firm (and in certain cases, become authorised to conduct
investment business).

The formation of a private equity fund.

Ongoing legal issues relating to a private equity fund.

Execution of transactions on behalf of a member of a private equity firm's group of
companies (a private equity sponsor that will normally involve a vehicle company
acting on its behalf (newco)).
1.4.2
Generally private equity work will be considered to be low risk for money laundering or terrorist
financing for the following reasons:

Private equity firms are often covered by the MLO and similar legislation in equivalent
jurisdictions.

Investors are generally large institutions, some of which will also be regulated for money
laundering purposes.

There are generally detailed due diligence processes followed prior to investors being
accepted.

The investment is generally illiquid and the return of capital is unpredictable.

The terms of the investment in the fund generally strictly control the transfer of interests
and the return of funds to investors.
1.4.3
Factors which may alter this risk assessment include:

Where the private equity firm, fund manager or an investor is located in a jurisdiction
which is not regulated for money laundering to a standard which is equivalent to the
FATF recommendations.

Where the investor is either an individual or an investment vehicle itself (a private equity
fund of funds).

Where the private equity firm is seeking to raise funds for the first time or is approaching
a large investor base.
1.5
Holding of funds
1.5.1
Where you choose to hold funds as stakeholder or escrow agent in commercial transactions, you
should consider the checks that need to be made about the funds before the funds are received.
You should be conducting CDD measures on all those on whose behalf the funds are being held.
1.5.2
Particular consideration should be given to any proposal that funds are collected from a number
of individuals whether for investment purposes or otherwise. This could lead to wide circulation
of client account details and payments being received from unknown sources.
19
D.
Litigation Work/Family
1.1
Legal Aid
The firm will only undertake legal aid work. Publicly funded work will not generally fall within the
ambit of the MLO. Publicly funded work extends to individuals under the legal aid scheme, even
if an individual may be required to pay a contribution to the firm's legal fees.
2.
FIRM’S ACCOUNTS
2.1
Use of firm’s bank accounts
2.1.1
Only use the client account to hold client money for legitimate client transactions. Putting dirty
money through a lawyer's client account can clean it, whether the money is sent back to the
client, on to a third party, or invested in some way. Introducing cash into a banking system can
become part of the placement stage of money laundering. Therefore, the use of cash may be a
warning sign.
2.1.2
The firm should not provide a banking service for our clients. However, it is accepted that it can
be difficult to draw a distinction between holding client money for a legitimate transaction and
acting more like a bank. For example, when the proceeds of a sale are left with a firm to make
payments, these payments may be to mainstream lending companies, but these may also be to
more obscure recipients, including private individuals, whose identity is difficult or impossible to
check.
2.1.3
The following situations could give rise to cause for concern:

A client deposits funds into a firm's client account, but then ends the transaction for no
apparent reason;

A client advises that funds are coming from one source and at the last minute the source
changes;

A client unexpectedly requests that money received into a firm's client account to be sent
back to its source, to the client or to a third party.
2.2
Policy on handling cash
2.2.1
Large payments made in cash may also be a sign of money laundering. Consequently, no cash
payment above the sum of £3,000 may be accepted directly by the firm unless authorised in
advance by the MLCO. If any cash deposit is received, you will need to consider whether you
think there is a risk of money laundering taking place and whether it is a circumstance requiring
an internal report to the MLRO.
2.2.2
Clients may attempt to circumvent such a policy by depositing cash directly into a client account
at a bank. Clients should be advised that they might encounter a delay in completion of the final
transaction if this should occur. It should be made clear that the electronic transfer of funds is
expected.
2.3
Source of funds
2.3.1
The partners will monitor whether funds received from clients are from the appropriate sources.
20
2.3.2
If funding is from a source other than a client, further enquiries may need to be made, especially
if the client has not advised what they intend to do with the funds before depositing them into the
firm's bank account. If it is decided to accept funds from a third party, perhaps because time is
short, the client should be asked how and why the third party is helping with the funding.
2.3.3
Enquiries do not need to be made into every source of funding from other parties. However, you
must always be alert to warning signs and in some case will need to seek more information.
2.3.4
In some circumstances, cleared funds will be essential for transactions and clients may want to
provide cash to meet a completion deadline. You should assess the risk in these cases and ask
more questions if necessary.
2.3.5
Clients should always be asked from where the funds will be coming. Will it be an account in
their name, from Jersey or another jurisdiction?
2.4
Acceptance of funds
2.4.1
Unless the funds would appear to be from an appropriate source, the partners shall use all
reasonable endeavours to return all and any moneys received into the firm's bank account to
their original source on the same day.
2.5
Payment on account of costs and payment of a bill
2.5.1
Payments on account of costs will not normally fall within the ambit of the MLO provided the
payment is proportionate to the issue in respect of which the firm is asked to advise.
2.5.2
Payment of the firm's bill, if payment is made out of the proceeds of criminal conduct, would
constitute an offence under article 33 of the POCL.
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SECTION C - LAWS AND OFFENCES
1.
MONEY LAUNDERING (JERSEY) ORDER 2008 (AS AMENDED)
Financial services businesses are required, in order to forestall and prevent money laundering,
to maintain appropriate policies for the application of:

CDD procedures at the outset of instructions.

Careful monitoring of clients during the retainer.

Record-keeping procedures.

Internal reporting procedures to the MLRO.

Such other procedures as is deemed appropriate.
The Order also deals with the appointing of a MLRO and a MLCO.
The Order has been amended in part by the Money Laundering (Amendment) (Jersey) Order
2008.
2.
PROCEEDS OF CRIME (JERSEY) LAW 1999 (AS AMENDED)
2.1
Assisting another to retain the benefit of criminal conduct
Article 32 of the Law makes it an offence for anybody, knowing or suspecting, that another
person has been engaged in criminal conduct, to enter an arrangement which:

Facilitates the retention or control of the proceeds of the person's criminal conduct; or

Enables such proceeds to be used to secure funds for the criminal; or

Assists the criminal in investing those proceeds.
No offence is committed if the assistance is given with the consent of a police or customs
officer or is followed by a timely and voluntary disclosure. Such disclosure is not held to be a
breach of any restriction on the disclosure of confidential information.
It is a defence to prove that the person did not know or suspect that the arrangement related to
the proceeds of crime or that the arrangement was facilitating the retention or control of monies
for a criminal. It is also a defence to prove that he intended to make the appropriate disclosure
and has a reasonable excuse for his failure to do so.
This offence carries a term of imprisonment of not more than 14 years or a fine, or both.
2.2
Acquisition, possession or use of proceeds of criminal conduct
Article 33 of the Law makes it an offence to acquire, possess or use any property which
represents in whole or in part, directly or indirectly, another's proceeds of criminal conduct,
knowing that they are such proceeds.
No offence is committed if the property is acquired with the consent of the police or is followed
by a timely and voluntary disclosure. Such disclosure is not held to be a breach of any
restriction on the disclosure of confidential information.
22
It is a defence to prove that the person acquired the property for adequate consideration, or to
prove that he intended to report his suspicions as to the origin of the property and has a
reasonable excuse for his failure to do so.
The offence carries a term of imprisonment of not more than 14 years or a fine, or both.
2.3
Concealing or transferring proceeds of criminal conduct
Article 34 makes it an offence:

For a person engaged in criminal conduct to conceal, disguise, convert or transfer
property that represents his proceeds of criminal conduct for the purpose of avoiding
prosecution or a confiscation order; or

For a person knowing or having reasonable cause to suspect that the property
represents another's proceeds of criminal conduct to conceal, disguise, convert or
transfer that property in an effort to help a person avoid prosecution or a confiscation
order.

2.4
The offence carries a term of imprisonment of not more than 14 years or a fine, or both.
Failure to report knowledge or suspicion of money laundering to the MLRO
Article 34D of the Law makes it an offence for a person to know or suspect — or have
reasonable grounds for knowing or suspecting — that another person is engaged in money
laundering where:

The information on which the knowledge or suspicion is based — or which gives the
reasonable grounds — comes to him in the course of his employment; and

He/she fails to disclose such information to the MLRO as soon as is practicable after it
comes to him/her.
The offence carries a term of imprisonment of not more than 5 years or a fine, or both.
2.5
Tipping-off
Article 35 of the Law makes it an offence to disclose information that is likely to prejudice an
investigation if the person knows that an investigation into money laundering is being, or is
about to be, conducted, or if he knows that a disclosure has been made under Articles 32 and
33 and that reporting such information is likely to prejudice the subsequent investigation.
Do not let an over-anxious fear of tipping off prevent you from making normal commercial
enquiries of your clients. Tipping-off is an offence that occurs at the point of proposed or actual
investigations, and any such investigations would normally follow after your own evaluation of
the need to make an SAR to the MLRO.
Once a report is made however the danger becomes more real. Once you have filed an SAR
you should refer to the MLRO for advice on how to proceed with client communications.
Please remember that tipping off is not just an offence that is committed by communicating with
suspected clients, but also other parties connected to the suspected client including advisers or
family members. You must treat all communications relating to a suspected client with the
utmost care and refer to the MLRO if you are in any doubt.
The offence carries a term of imprisonment of not more than 5 years or a fine, or both.
The Law has been amended in part by:
23

Proceeds of Crime (Cash Seizure) (Jersey) Law 2008;

Proceeds of Crime (Amendment) (Jersey) Law 2008;

Proceeds of Crime (Substitution of Schedule 2) (Jersey) Regulations 2008.
3.
DRUG TRAFFICKING OFFENCES (JERSEY) LAW 1988 (AS AMENDED)
3.1
Concealing or transferring proceeds of drug trafficking
Article 30 of the Law makes it an offence:

For a drug trafficker to conceal, convert, disguise or transfer the proceeds of his
trafficking in order to avoid prosecution or a confiscation order;

For a person to conceal, convert, disguise or transfer the proceeds of another's drug
trafficking knowing or suspecting that they are such proceeds, for the purpose of
assisting the trafficker to avoid prosecution or a confiscation order.
Both these offences are punishable by up to 14 years imprisonment or a fine, or both.
3.2
Assisting another to retain the benefit of drug trafficking
Article 37 of the Law makes it an offence for anybody, knowing or suspecting that another
person is a drug trafficker, to enter an arrangement which:

Facilitates the retention or control of the proceeds of drug trafficking; or

Enables such proceeds to be used to secure funds for the drug trafficker; or

Assists the drug trafficker in investing the proceeds.
No offence is committed if the arrangement is entered into with the consent of the police or is
followed by a timely and voluntary disclosure. Such disclosure is not held to be a breach of any
restriction on the disclosure of confidential information.
It is a defence to prove that the person assisting the trafficker did not know or suspect that the
arrangement related to the proceeds of trafficking or that the arrangement was assisting a drug
trafficker. It is also a defence to prove that he intended to make the appropriate disclosure and
has a reasonable excuse for his failure to do so.
Offences under this Article are punishable by up to 14 years imprisonment or a fine, or both.
3.3
Acquisition, possession or use of property representing proceeds of drug trafficking
Article 38 of the Law makes it an offence to acquire, possess or use any property which
represents in whole or in part, directly or indirectly, another's proceeds of drug trafficking,
knowing that they are such proceeds.
No offence is committed if the property is acquired with the consent of the police or customs or
is followed by a timely and voluntary disclosure. Such disclosure is not held to be a breach of
any restriction on the disclosure of confidential information.
It is a defence to prove that the person acquired the property for adequate consideration, or to
prove that he intended to report his suspicions as to the origin of the property and has a
reasonable excuse for his failure to do so.
The offence is punishable by up to 14 years imprisonment or a fine, or both.
24
3.4
Failure to report knowledge or suspicion of money laundering to the MLRO
Article 40A of the Law makes it an offence for a person to know or suspect — or have
reasonable grounds for knowing or suspecting — that another person is engaged in drug
money laundering where:

The information on which the knowledge or suspicion is based — or which gives the
reasonable grounds — comes to him in the course of his employment; and

He/she fails to disclose such information to the MLRO as soon as is practicable after it
comes to him/her.
The offence carries a term of imprisonment of not more than 5 years or a fine, or both.
3.5
Tipping-off
Article 41 of the Law makes it an offence:

To disclose information which is likely to prejudice an investigation, knowing or
suspecting that an investigation into drug money laundering is being, or is about to be,
conducted; or

To pass on information knowing that a disclosure has been made under Article 37, 38 or
40A of the Law and that relaying the information is likely to prejudice any investigation.
It is a defence to prove that the person did not know or suspect that the disclosure was likely to
prejudice any such investigation.
This offence is punishable by up to 5 years imprisonment or a fine, or both.
3.6
Prejudicing an investigation
Article 44 of the Law makes it an offence to make any disclosure which is likely to prejudice an
investigation where an order under Article 42 of the Law has been applied for and not refused,
or a warrant under Article 43 has been issued, and the person knows or suspects that an
investigation is taking place.
It is a defence to prove that he did not know or suspect that the disclosure was likely to
prejudice the investigation or that he had a reasonable excuse for making the disclosure.
This offence is punishable by up to 5 years imprisonment or a fine, or both.
The Law has been amended in part by:
4.

the Proceeds of Crime (Cash Seizure) (Jersey) Law 2008;

the Drug Trafficking Offences (Amendment) (Jersey) Law 2008.
TERRORISM (JERSEY) LAW 2002 (AS AMENDED)
The main offences that are relevant to persons working in financial services businesses are as
follows:
4.1
Fund-raising
25
Article 15 of the Law makes it an offence for a person to receive property, or provide property,
or invite another to provide property, intending, knowing or having reasonable cause to suspect
that it will or may be used for the purposes of terrorism.
A person guilty of an offence under this Article shall be liable to imprisonment for a term not
exceeding 14 years or to a fine, or both.
4.2
Use and possession
Article 16 of the Law makes it an offence for a person to possess property intending or having
reasonable cause to suspect that it will or may be used for the purposes of terrorism.
A person guilty of an offence under this Article shall be liable to imprisonment for a term not
exceeding 14 years or to a fine, or both.
4.3
Funding arrangements
Article 17 of the Law makes it an offence for a person to become concerned in an arrangement
as a result of which property is made available or is to be made available to another, knowing
or having reasonable cause to suspect that it will or may be used for the purposes of terrorism.
A person guilty of an offence under this Article shall be liable to imprisonment for a term not
exceeding 14 years or to a fine, or both.
4.4
Money laundering
Article 18 of the Law makes it an offence for a person to enter into or become concerned in an
arrangement which facilitates the retention or control by or on behalf of another person of
terrorism property, by concealment, removal from the Island, transfer to nominees or in any
other way.
It is a defence for the person charged with an offence under this Article to prove that he did not
know and had no reasonable cause to suspect that the arrangement related to terrorism
property.
If a person does anything outside the Island and his action would have constituted the
commission of an offence under any of the Articles 15 to 18 if it had been done in the Island, he
shall be guilty of an offence.
A person guilty of an offence under this Article shall be liable to imprisonment for a term not
exceeding 14 years or to a fine, or both.
Article 23 makes it an offence for a person who comes by information in the course of the
business of a financial institution, which gives him grounds to know or suspect that another
person is guilty of an offence under Articles 15 to 18, to fail to disclose
that information to a police or customs officer as soon as is practical. It is not an offence if that
person has a reasonable excuse for not disclosing the information or if that person is a
professional legal adviser and the information or other matter cane to him in privileged
circumstances.
A person guilty of an offence under this Article shall be liable to imprisonment for a term not
exceeding 5 years or to a fine, or both.
4.5
Tipping off and interference with material
26
Article 35 of the Law makes it an offence to pass on information likely to prejudice an
investigation or interferes with material which is likely to prejudice the investigation.
It is a defence that the person did not know and had no reasonable cause to suspect that the
disclosure was likely to prejudice an investigation, or that the person had a reasonable excuse
for making the disclosure.
A person guilty of an offence under this Article shall be liable to imprisonment for a term not
exceeding 5 years or to a fine, or both.
The Law has been amended in part by:

the Proceeds of Crime (Cash Seizure) (Jersey) Law 2008;

the Terrorism (Amendment No 2) (Jersey) Law 2008.
27
SECTION D - GLOSSARY
For ease of reference the following comprises a comprehensive list of the definitions used in the firm's
Policy and Procedures and accompanying forms:
“CDD”
Client Due Diligence;
“CDD Form CL”
the CDD form for clients that are companies or
other entities, lower risk;
“CDD Form CS”
the CDD form for clients that are companies or
other entities, higher risk;
“CDD Form I”
the CDD form for Individuals;
“CDD Form R”
the CDD form for clients that are regulated
entities;
“CDD Form W”
a form of written assurance;
“CDD Form T”
the CDD form for unregulated trustees;
‘CDD Form X’
the CDD form for matters where there is no
suspicion of money laundering;
“Equivalent Certificate”
this is the Equivalent Intermediary/Introducer
Certificate as prepared by the JFSC;
“FATF”
Financial Action Task Force;
“financial services business”
fund services business, general insurance
mediation
business,
investment
business,
money services business or trust company
business, all as defined in article 2 FSL and
regulated by the JFSC;
“FSL”
Financial Services (Jersey) Law 1998, as
amended;
“Handbook”
the JFSC handbook for the prevention and
detection of money laundering and the financing
of terrorism for the legal sector;
“JFCU”
the Jersey Financial Crimes Unit;
“JFSC”
the Jersey Financial Services Commission;
“LPP”
Legal Professional Privilege;
“MLCO”
the Money Laundering Compliance Officer;
“MLO”
Money Laundering (Jersey) Order 2008, as
amended;
“MLRO”
the Money Laundering Reporting Officer;
“PEPs”
Politically Exposed Persons;
“POCL”
Proceeds of Crime (Jersey) Law 1999, as
amended;
“regulated person”
fund services business, general insurance
mediation business, investment business, or
money services business, all as defined in the
FSL;
“relevant person”
a relevant person as defined in the MLO;
28
“SAR”
Suspicious Activity Reports;
“Source of Funds”
the activity which generates the funds for the
particular activity in which this firm is assisting;
“Source of Wealth”
the activities which have generated the total net
worth of a person both within and outside of a
particular activity in which this firm is assisting
(i.e. those activities which have generated a
client's funds and property); and
“TJL”
Terrorism (Jersey) Law 2002, as amended.
29