WHAT IS AN OBLIGED ENTITY?
Simply, in the context of this consultation, access to the Register would be given to entities that are obliged to conduct customer due diligence (CDD) in accordance with the Money Laundering (Jersey) Order 2008 (MLO).
WHAT IS PROPOSED BY THE CONSULTATION?
Following an initial consultation paper released by the GOJ in October 2022 to extend access to the Register to obliged entities, responses to the consultation were generally supportive. The April Consultation Paper is seeking feedback on the draft legislation to deliver this access. The GOJ proposes the implementation of access in two stages:
- Stage One – Access will be provided in respect of all beneficial owner information maintained under the Financial Services (Disclosure and Provision of Information) (Jersey) Law 2020 (Disclosure Law) and held on the Register, which can then be used to support the CDD process by those applying for access to information on a specific entity.
- Stage Two – Integrating the access process into the CDD regime. The GOJ has identified that this integration, which will be dealt with at a later stage, may require the amendment of provisions of the Proceeds of Crime (Jersey) Law 1999 and the MLO, aligning with developing international standards to allow for validation of CDD in line with other reliable sources.
It is proposed that access to the Register for CDD purposes (i.e. stage one) will be implemented by way of an amendment to the Disclosure Law (Disclosure Amendment Law), a draft of which has been attached to the consultation for industry comment. It is further noted that a complementary amendment (Amendment Regulations) to the Financial Services (Disclosure and Provision of Information) (Jersey) Regulations 2020 is being developed for consultation in due course.
WHAT THE DISCLOSURE AMENDMENT LAW MEANS FOR THE INFORMATION OF BENEFICIAL OWNERS
- The Disclosure Amendment Law would provide the JFSC with the power to disclose information contained on the Register to obliged entities.
- Access will be limited to the genuine purpose of supporting CDD, linking to the exercise functions under Part 3 of the MLO (being CDD measures), thus preventing access to beneficial ownership information for business development and speculative purposes.
- The Disclosure Amendment Law will also place restrictions on the disclosure of information and processing of information beyond the purpose permitted.
In order to complement the above proposed changes, it is intended that the Amendment Regulations will allow persons to apply to the JFSC to prevent disclosure of their information and, accordingly, recognising that there may be situations in which it will be necessary to restrict access to such information to protect individuals from harm.
CONCLUSION
It is clear from the consultation that the GOJ is determined to balance appropriately the importance of combatting money laundering and terrorist and proliferation financing through transparency and access to information, against the need to prevent serious interference with fundamental rights to privacy and the protection of personal data.
The consultation confirms, in line with a commitment given by GOJ on access to the Register, that access by the general public is not considered compatible with those rights. Access to the Register for those who may have a “legitimate interest” is to be the subject of further consultation later this year.
Readers are encouraged to engage thoroughly in the consultation as it is not often interested parties are able to contribute to policy development at this early stage; feedback and views are very much welcomed by the JFSC and the GOJ. You may submit your comments on the Disclosure Amendment Law following the instructions detailed in the April Consultation Paper.
Do get in touch with your usual Appleby contacts should you wish to discuss further.
