Fraud

Regulatory provisions and authorities

1. What are the main regulatory provisions and legislation relevant to corporate fraud?

Fraud in Jersey is a common law offence that can be committed by natural persons. To establish criminal fraud, there must be evidence that the defendant has deliberately made a false representation with the intention, and consequence, of causing actual prejudice to someone and actual benefit to them or another. A body corporate cannot commit the offence of common law fraud.

Additionally, specific examples of fraud are provided for in the following statutes:

Insider trading, market manipulation and provision of misleading. These offences are covered in Part 3A of the Financial Services (Jersey) Law 1998.
Tax evasion. This is often named as a type of fraud and is established under Part 22 of the Income Tax (Jersey) Law 1961.
Money laundering. This is covered in the Proceeds of Crime (Jersey) Law 1999 and the related Money Laundering (Jersey) Order 2008 and would typically include monies obtained by fraud.
Fraudulent inducement to make deposits. This is covered by Article 23 of the Banking Business (Jersey) Law 1991.
Fraudulent inducement to invest money. This is provided for in the Investors (Prevention of Fraud) (Jersey) Law
Providing false or misleading information. This is addressed in Article 10 of the Collective Investment Funds (Jersey) Law
Fraud (both local and international). Investigation of Fraud (Jersey) Law 1991 and Criminal Justice (International Corporation) (Jersey) Law 2001 detail investigatory powers in relation to fraud on a local and international

Offences

2. What are the specific offences relevant to corporate fraud?

The most common offences relating to corporate fraud are:

Tax evasion.
Securities fraud.
Making false or misleading statements with the aim of inducing investors to invest in a business venture or purchase financial products.

Additionally, insider dealing, market manipulation or fraudulent inducements to make deposits to unlicensed parties acting as banks are noteworthy.

Enforcement

3. Which authorities have the powers of prosecution, investigation and enforcement in cases of corporate or business fraud? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

Criminal prosecutions are brought in the name of Her Majesty’s Attorney General for Jersey. The principal investigative agency is the States of Jersey Police.

For business-related crime, the police operate the Joint Financial Crimes Unit (JFCU), who will also often work closely with the Enforcement Division of the Jersey Financial Services Commission (JFSC), which investigates regulatory offences.

The JFSC has wide ranging powers to conduct regulatory investigations of the entities they oversee and supervise.

The consequences of non-compliance with the lawful demands of an investigating authority depends on the nature of the non-compliance and can result in:

Loss of business
Monetary fines.
Imprisonment.

Prosecution powers

The States of Jersey Police are granted the following powers during an investigation.

Powers of interview

The States of Jersey Police have the power to interview a suspect or, where relevant, the directors and other relevant personnel of a company. Generally, interviews are conducted under caution. The interviewee has the right to:

Have a legal adviser present.
Refuse to answer questions or provide information (with no adverse inference drawn from their silence).

Additionally, the Attorney General can administer questions or otherwise obtain information from persons under investigation. The JFSC can also request information from persons in relation to suspected regulatory offences.

Powers of search/to compel disclosure

The States of Jersey Police have a wide range of entry, search and seizure powers (Parts 2 and 3, Police Procedures and Criminal Evidence (Jersey) Law 2003). For example, they can enter and search premises under a warrant and seize and retain any relevant information for which a search has been authorised under a warrant.

Where no warrant has been issued, police officers may enter and search premises where:

They have reasonable cause to suspect the commission of an offence on such
They want to enter the premises to arrest someone that they suspect has committed an offence.
They enter the premises for the purpose of saving life or limb or preventing serious damage to property.

Searches and forced disclosure of documents or information can be authorised by the Bailiff (the Chief Justice of Jersey and President of the Royal Court) (or his delegate) or a Jurat (a lay judge), on application for a warrant by the police or Attorney General. If a warrant is granted, it must be executed by the police. However, the Attorney General can authorise other parties to accompany the police.

Powers to obtain evidence

The States of Jersey Police have wide powers to obtain evidence, including from third parties (Police Procedures and Criminal Evidence (Jersey) Law 2003). The JFSC also has power to obtain evidence.

The States of Jersey Police must not seize material that is legally privileged.

The Attorney General can obtain evidence from overseas by letter of request (Article 4, Criminal Justice (International Co-operation) (Jersey) Law 2001).

Power of arrest

The police have the power of arrest. Both the States of Jersey Police and the courts have the power to grant bail, which can be unconditional or conditional. Additionally, the Honorary Police of each Parish have limited powers to grant bail.

A defendant has a right to bail, subject to a number of statutory exceptions.

Court orders or injunctions

The court has wide powers to order injunctions and make other orders as appropriate to deal with the alleged offence.

4. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

The States of Jersey Police and/or JFSC conduct investigations. Where a breach has been investigated, the States of Jersey Police and/or JFSC can refer that breach to the Attorney General. The Attorney General of Jersey then decides whether to charge in accordance with a Code of Practice issued by the Attorney General. The decision whether to charge involves a two-stage test:

The evidential test. This determines if there is sufficient evidence to provide a realistic prospect of conviction.
The public interest This determines whether the prosecution is in the public interest.

The Attorney General can prosecute regardless of whether the JFSC has decided to refer the case.

There are no alternative methods of disposal in respect of criminal offences. There is no ability to enter into a deferred prosecution or a non-prosecution agreement in Jersey. Even if Attorney General considers that test for bringing criminal proceedings has not been met, the JFSC can still act regarding any regulatory breaches.

5. What are the sanctions for participating in corporate fraud?

Civil/administrative proceedings or sanctions

The JFSC can impose regulatory sanctions against an offending corporate entity, including:

Fines against the entity and/or its officers.
The withdrawal or suspension of permits and licenses.

Criminal proceedings

The penalties for fraud include a potentially unlimited fine for the offending entity and the loss of regulatory permits or licences. The court can also determine that it would be fair and equitable to order the winding-up of the entity.

If an offence is committed by a body corporate with the consent or knowledge of a relevant company officer, or is attributable to their neglect, the company officer can also be guilty of the offence and liable to prosecution and conviction.

This also applies where the affairs of the body corporate are managed by its members. Officers found guilty of a crime face the full range of possible sanctions, from fines to the loss of licences and custodial sentences.

Civil suits

A body corporate and/or its officers may also face civil claims for compensation and (if appropriate or necessary) the dissolution of the body corporate.

Safeguards

6. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

The rules on evidence and procedure provide relevant guidelines for the proper conduct of investigations and the admissibility of any evidence. The rules of evidence and procedure in Jersey are contained in a number of different pieces of legislation such as the:

Criminal Justice (Evidence and Procedure) (Jersey) Law 1998.
Police Procedures and Criminal Evidence (Jersey) Law 2003.
Criminal Procedure (Alibis) (Jersey) Rules 1999.
Criminal Procedure (Notice of Expert Evidence) Rules 2000.
Criminal Procedure (Jersey) Law 2018.
Jersey customary/common law.

Defendants have a right to appeal to the Court of Appeal against conviction, sentence or both.

Any challenge to the validity of a decision made by a public body, including the police, the Minister and certain decisions of the Attorney General, must be brought through an application for judicial review. Judicial review is not granted if an equally effective alternative remedy is available (whether statutory or otherwise). Effective alternative remedies could include:

Challenging a decision through a review board.
Following any existing appeal procedures in Jersey.
Using mediation and conciliation procedures.
Using any other alternative dispute resolution avenues.

Judicial review proceedings are civil proceedings regardless of the subject matter of the decision under review (including where the decision is taken in the context of criminal proceedings). The procedure for making an application for judicial review is governed by Part 16 of the Royal Court Rules 2004.

Bribery and corruption

Regulatory provisions and authorities

7. What are the main regulatory provisions and legislation relevant to bribery and corruption?

“Bribery” as a customary offence in Jersey was abolished by the introduction of the Corruption (Jersey) Law 2006 (Corruption Law). The Corruption Law addresses the main offences around bribery and corruption in Jersey although the extraterritorial nature of the United Kingdom’s Bribery Act 2010 also shapes expectations and practices in Jersey, given the island’s close commercial co-operation with the UK.

The Corruption Law does not use the term “bribery” and instead uses the undefined term “advantages” (which can include money or anything else imaginable). Offences must be committed “corruptly”, which is also undefined. The legislation is deliberately broad and non- prescriptive to allow actions to be taken against corruption in its broadest sense and a common sense approach is recommended.

8. What international anti-corruption conventions apply in your jurisdiction?

The Council of Europe Convention on Corruption 1999 and the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions prompted Jersey to enact the Corruption Law. Jersey seeks to comply with all recognised international standards for combatting financial crime.

Offences

9. What are the specific bribery and corruption offences in your jurisdiction?

Foreign public officials

It is an offence to give, promise or offer (or to receive, solicit or agree to receive) any advantages as an inducement for somebody working in or for a public body (whether domestic or foreign) to do something or refrain from doing something.

“Public body” is broadly defined and includes:

Regulators.
Governments (in Jersey or their equivalents in countries and territories abroad).
Any company in which the States of Jersey is the principal shareholder.

The person giving the bribe does not have to be the party that benefits from a certain act or omission and the party receiving it may not be the one who is directly working for the public body.

Further, corrupt behaviour by public officials (whether in or outside of Jersey) as a form of abuse of public office is likewise an offence.

Domestic public officials

See above, Foreign public officials.

Private commercial bribery

Additionally, the Corruption Law addresses “corrupt transactions with agents”. Private or public sector agents must not accept, obtain or offer any advantage that serves as an inducement for an act, omission or display of favour relating to the affairs of their principal.

The extraterritorial scope of the Corruption Law and the UK’s Bribery Act 2010 will often apply to Jersey or British legal entities (including Scottish Limited Partnerships), Jersey citizens and UK citizens operating in Jersey or in other jurisdictions.

Defences

10. What defences, safe harbours or exemptions are available and who can qualify?

There are no statutory defences provided in the Corruption Law.

Unlike the UK’s Bribery Act 2010, the Corruption Law does not contain a defence of “adequate procedures”, which means a Jersey entity cannot defend itself by referring to its anti-bribery and corruption procedures (which are designed to detect and prevent acts of corruption and bribery). However, as a matter of good practice and to address the concerns posed by the UK’s Bribery Act 2010, Jersey entities would be well advised to have anti-bribery and corruption procedures in place, making it less likely that they will fall foul of the Corruption Law in Jersey.

11. Can associated persons (such as spouses) and agents be liable for these offences and in what circumstances?

Any party who knowingly, recklessly or through wilful negligence, engages in or enables corrupt behaviour can be held liable in the same form as the principal offender (including aiding, abetting, counselling or procuring in relation to the offence).

Enforcement

12. Which authorities have the powers of prosecution, investigation and enforcement in cases of bribery and corruption? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

Prosecutions are brought by the Attorney General of Jersey (see Question 3).

Prosecution powers

The States of Jersey Police are granted the following powers during an investigation.

Powers of interview

Have a legal adviser present.
Refuse to answer questions or provide information (with no adverse inference drawn from their silence).

Powers of search/to compel disclosure

Where no warrant has been issued, police officers may enter and search premises where:

They have reasonable cause to suspect the commission of an offence on such
They want to enter the premises to arrest someone that they suspect has committed an offence.
They enter the premises for the purpose of saving life or limb or preventing serious damage to property.

Powers to obtain evidence

The States of Jersey Police must not seize material that is legally privileged.

The Attorney General can obtain evidence from overseas by letter of request (Article 4, Criminal Justice (International Co-operation) (Jersey) Law 2001).

Power of arrest

A defendant has a right to bail, subject to a number of statutory exceptions.

Court orders or injunctions

The court has wide powers to order injunctions and make other orders as appropriate to deal with the alleged offence.

13. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

Prosecutions under the Corruption Law can only be instituted with consent of the Attorney General (see Question 4).

Convictions and sanctions

14. What are the sanctions for participating in bribery and corruption?

Civil/administrative proceedings or penalties

Parties who suffered losses as the result of corruption can apply to the civil courts to recover damages and compensation (see Question 5).

Criminal proceedings or penalties

The penalty for corruption can be up to ten year’s imprisonment and a fine. Corruption offences committed by a body corporate can also cover the individuals involved, such as directors, secretaries, partners (in a partnership), managers or anyone acting in similar capacity. The liability and potential penalties for the individuals are the same as for the offending entity.

Safeguards

15. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

See Question 6.

Tax treatment

16. Are there any circumstances under which payments such as bribes, ransoms or other payments arising from blackmail or extortion are tax-deductible as a business expense?

Unlike the US and other countries, Jersey’s Corruption Law does not include a carve-out for “facilitation payments” (that is, payments made to public officials to make them perform certain routine tasks or make them perform them faster).

While not specifically addressed, it is unlikely that payments of bribes or ransom could be tax- deductible as a business expense in Jersey. Businesses at risk for blackmail, ransom or extortion scenarios may wish to consider taking out relevant insurance.

Insider dealing and market abuse

Regulatory provisions and authorities

17. What are the main regulatory provisions and legislation relevant to insider dealing and market abuse?

The main regulatory provisions are contained in Part 3A of the Financial Services (Jersey) Law 1998 (FSJL 1998), which closely follows the rules contained in the UK’s Criminal Justice Act 1993 and the Financial Services and Markets Act 2000.

Under Article 39G of the FSJL 1998, a person who has information as an insider is guilty of an offence if when:

The acquisition or disposal in question occurs on a securities market.
The person dealing relies on a professional intermediary or is himself or herself acting as a professional intermediary.
He or she deals in securities that are price-affected securities in relation to the information.

Such person is guilty of an offence if:

He or she encourages another person to deal in securities that are (whether or not that other person knows it) price-affected securities in relation to the information, knowing or having reasonable cause to believe that the dealing would take place in the circumstances mentioned above.
He or she discloses the information, otherwise than in the proper performance of the functions of his or her employment, office or profession, to another person.

A person guilty of insider dealing is liable to imprisonment for up to ten years or a fine.

Article 39L of the FSJL 1998 provides what constitutes a market manipulation and the provision of misleading information. Included in the definitions is the making of a statement, promise or forecast which the person knows to be misleading, false or deceptive (in the case of market manipulation) and the engaging in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any investment or a contract of general insurance (in the case of misleading information).

A person guilty of market manipulation or the provision of misleading information is liable to imprisonment for up to ten years or a fine.

Offences

18. What are the specific offences that can be used to prosecute insider dealing and market abuse?

Insider dealing occurs where a person who has information as an insider, deals in securities which are price-affected by the inside information. The offence is broad and includes encouraging others to deal based on inside information and disclosing inside information.

Market manipulation occurs where a person either omits to disclose material information or makes a statement, forecast or promise that is either false, deceptive or misleading or the person is reckless as to whether the information could be false, deceptive or misleading and such conduct is performed for the purpose of inducing another person to offer or enter into (or refrain from offering or entering) certain financial transactions.

Market manipulation covers any course of conduct that creates a false or misleading impression as to the market, the price of securities or the value of any investment.

Defences

19. What defences, safe harbours or exemptions are available and who can qualify?

Defences include:

The defendant did not expect to make a profit attributable to the information available at the time of trade.
The defendant reasonably believed the inside information had been widely enough disclosed and was no longer inside information.
The person disclosing information did not at the time expect any person, because of the disclosure, to deal in relevant securities.

Additionally, parties acting in good faith in a professional capacity as market makers or parties who can prove to have acted in accordance with applicable market rules will not be deemed to have committed an offence.

Defences against market manipulation include the:

Relevant statement, forecast or promise was made in accordance with market rules.
Relevant course of conduct complained about was in conformity with market rules or the person accused reasonably believed that the act or conduct would not result in creating a false or misleading impression about the market, relevant securities or the price of the investments and contracts of general insurance noted in the FSJL 1998.

Enforcement

20. Which authorities have the powers of prosecution, investigation and enforcement in cases of insider dealing and market abuse? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

See Question 3.

21. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

See Question 4.

Convictions and sanctions

22. What are the sanctions for participating in insider trading and market abuse?

Civil/administrative proceedings or penalties

See Question 5.

Criminal proceedings

A person guilty of insider dealing or market manipulation is liable to imprisonment not exceeding ten years or an unlimited fine.

Safeguards

23. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

See Question 6.

Money laundering, terrorist financing and financial/trade sanctions

Regulatory provisions and authorities

What is the main legislation and regulatory provisions relevant to money laundering, terrorist financing and/or breach of financial/trade sanctions?

Money laundering

Jersey’s primary legislation relevant to money laundering includes:

Criminal Justice (International Co-operation) (Jersey) Regulations 2001.
Civil Asset Recovery (International Co-operation) (Jersey) Law 2007.
Investigation of Fraud (Jersey) Law 1991.
Money Laundering and Weapons Development (Directions) (Jersey) Law 2012.
Non-Profit Organizations (Jersey) Law 2008.
Proceeds of Crime (Jersey) Law 1999.
Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008.

The secondary legislation includes:

Money Laundering (Jersey) Order
EU Legislation (Information Accompanying Transfers of Funds) (Jersey) Regulations 2017.
Non-Profit Organisations (Jersey) Order 2008.
Proceeds of Crime (Supervisory Bodies) (Designation of Supervisory Bodies) (Jersey) Order 2008.
Proceeds of Crime (Supervisory Bodies) (Virtual Currency Exchange Business) (Exemption) (Jersey) Order 2016.
Proceeds of Crime (Cash Seizure) (Jersey) Law 2008.
Proceeds of Crime (Enforcement of Confiscation Orders) (Jersey) Regulations 2008.

Terrorist financing

Jersey’s primary legislation relevant to terrorist financing is as follows:

Terrorism (Jersey) Law 2002.
Sanctions and Asset-Freezing (Jersey) Law 2019.

Secondary legislation includes:

Proceeds of Crime and Terrorism (Tipping off- Exceptions) (Jersey) Regulations 2014.
The Al-Qaeda and Taliban (United National Measures) (Channel Islands) Order 2002.

Financial/trade sanctions

The principal Jersey legislation relating to sanctions measures is the Sanctions and Asset-Freezing (Jersey) Law 2019 (SAFL). By this law the Minister for External Relations is empowered to make Orders implementing EU, UK and UK sanctions. All prior Orders made by the Minister for External Relations implementing sanctions, such as those made under the European Union Legislation (Implementation) (Jersey) Law 2014, have been grandfathered into SAFL as if made thereunder.

Offences

25. What are the specific offences that can be used to prosecute money laundering, terrorist financing and breach of financial/trade sanctions?

Money laundering

Under the Proceeds of Crime (Jersey) Law 1999, the main offences relate to the acquisition, use or possession of criminal property. Another offence is where a person enters into or facilitates an arrangement to use or possess criminal property on behalf of another person. It is an offence to conceal, disguise, convert or transfer or remove criminal property from Jersey.

Failure to disclose knowledge or suspicion of money laundering in the course of the person’s trade, profession, business or employment is also an offence.

The Proceeds of Crime (Jersey) Law 1999 includes tipping-off provisions making it an offence for a person who knows or suspects that the Attorney General or any police officer is acting or proposing to act in connection with a money laundering investigation to disclose to any other person information relating to the investigation. It is an offence to interfere with material relevant to the investigation.

Terrorist financing

Offences relating to terrorist financing under the Terrorism (Jersey) Law 2002 include:

The use and possession of property for the purposes of terrorism.
Dealing with terrorist property.
Insuring against payments made in response to terrorist demands.
Forfeiture of property used for the purposes of terrorism.
Failure to disclose any knowledge or suspicion about any person undertaking any of the above activities, known in the course of the person having such knowledge or belief or suspicion’s trade, profession, business or employment.

Financial/trade sanctions

In general terms, SAFL makes it an offence to:

Deal with funds or economic resources belonging to, owned, held or controlled by a designated person.
Fake funds or financial services available to or for the benefit of a designated person.
Make economic resources available (directly or indirectly) to a designated person, which that designated person is likely to use in exchange for funds, goods or services, where a person knows or has reasonable cause to suspect that they are so doing.

In relation to a relevant financial institution, it is an offence to fail to inform the Minister for External Relations, as soon as practicable if it holds an account, has entered into dealings or an agreement with a person which it knows, or has reasonable cause to suspect it a designated person, or has committed an offence under SAFL, and the information on which the knowledge or suspicion is based came to it in the course of carrying on its business.

It is also an offence to intentionally participate in activities knowing that the object or effect of them is (whether directly or indirectly) to circumvent, enable or facilitate the contravention of the specific provisions of SAFL.

Defences

26. What defences, safe harbours or exemptions are available and who can qualify?

Money laundering

A person is not guilty of an offence if the person acquired, used, possessed or controlled the property for adequate consideration (Article 30, Proceeds of Crime (Jersey) Law 1999). The defence of adequate consideration is not available where:

Property or services provided to a person assist that person in criminal conduct.
A person providing property or services to another person knows, suspects, or has reasonable grounds to suspect that the property or services will or may assist the other person in criminal conduct.
The value of the consideration is significantly less than the value of the property acquired or, as the case may be, the value of its use or possession.

A defence to a failure to disclose is that the person charged had a reasonable excuse for not disclosing the information or other matter in question. In the case of a person who was in employment at the relevant time, it is a defence to a charge of committing such offence that the person disclosed the information or other matter in question to the appropriate person in accordance with the procedure established by the person’s employer for the making of such disclosures.

Terrorist financing

The defences available under the Proceeds of Crime (Jersey) Law 1999 include:

In relation to disclosure, it is a defence for a person charged with such an offence to prove that the person took all reasonable steps and exercised due diligence to avoid committing the offence.
In relation to dealing with terrorist property, that the person did not know or suspect or had no reasonable grounds to suspect that:
the purpose of the act was to facilitate the retention or control of terrorist property; or
the property in question was terrorist property.
Where a person becomes a member of a proscribed organisation, that the organisation was not proscribed on the last (or only) occasion on which the person became a member or began to profess to be a member; and that the person has not taken part in the activities of the organisation at any time while it was proscribed.

Enforcement

Which authorities have the powers of prosecution, investigation and enforcement in cases of money laundering? What are these powers and what are the consequences of non-compliance? Please identify any differences between criminal and regulatory investigations.

Authorities

The principal authorities responsible for the enforcement of Jersey’s anti-money laundering regime are the:

JFSC.
JFCU.
Law Officers’ Department.

The JFCU is responsible for receiving, disseminating and investigating reports of suspicions of money laundering made under the anti-money laundering legislation. The JFCU comprises both police and customs officers. The Law Officers’ Department is responsible for the public prosecution of all criminal matters in Jersey. The JFSC, JFCU and Law Officers’ Department sit on an AML/CFT Strategy Group.

The Terrorism (Jersey) Law 2002 confers the following counter-terrorist powers on a police officer:

To stop and search.
To obtain a warrant to search premises.
To order provision of financial information.

The Proceeds of Crime (Jersey) Law 1999 empowers a police officer in various ways including to:

Make investigations relating to proceeds of criminal conduct.
To apply for a warrant in relation to specific premises.

Prosecution powers

Criminal prosecutions are brought in the name of Her Majesty’s Attorney General for Jersey (see Question 3).

Powers of interview

Have a legal adviser present.
Refuse to answer questions or provide information (with no adverse inference drawn from their silence).

Powers of search/to compel disclosure

Where no warrant has been issued, police officers may enter and search premises where:

They have reasonable cause to suspect the commission of an offence on such
They want to enter the premises to arrest someone that they suspect has committed an offence.
They enter the premises for the purpose of saving life or limb or preventing serious damage to property.

Powers to obtain evidence

The States of Jersey Police must not seize material that is legally privileged.

The Attorney General can obtain evidence from overseas by letter of request (Article 4, Criminal Justice (International Co-operation) (Jersey) Law 2001).

Power of arrest

A defendant has a right to bail, subject to a number of statutory exceptions.

28. Which authority makes the decision to charge and on what basis is that decision made? Are there any alternative methods of disposal and what are the conditions of such disposal?

See Question 4.

The JFSC has a statutory obligation to report any suspicion of money laundering to the Joint Financial Crimes Unit (Article 23(1), Money Laundering (Jersey) Order 2008).

Where criminal offences come to the attention of the JFSC in the conduct of its statutory functions it may make a referral to the police and/or the Attorney General. The JFSC has issued to guidance note to govern when referrals are made.

A criminal offence will be referred where the JFSC considers it to be sufficiently serious to the extent that it poses a threat to clients/potential clients, to Jersey’s reputation and/or where it casts doubt on the integrity, competence or financial standing of the person concerned. The JFSC will also consider the nature of the offence, for example whether it was deliberate or accidental.

In determining whether to make a referral the JFSC may also consider whether the matter could be adequately addressed by the use of any of the regulatory powers or sanctions available to the JFSC.

Convictions and sanctions

29. What are the sanctions for participating in money laundering, terrorist financing offences and/or for breaches of financial/trade sanctions?

Money laundering

Fines, confiscation orders and compensation orders can be made by the court (in addition to a criminal sentence) under the Criminal Justice (Compensation Orders) (Jersey) Law 1994, the Money Laundering (Jersey) Order 2008 or under the inherent powers of the court.

Regulatory sanctions against an offending corporate entity can be imposed by the JFSC. The range of sanctions can include fines against the entity and/or its officers or the withdrawal or suspension of permits and licences.

Terrorist financing

The penalties for offences committed under the Terrorism (Jersey) Law 2002 vary according to the offence in question and range from a term of imprisonment of three months to 14 years and/or a fine depending on the type of offence committed.

Financial/trade sanctions

The penalties under SAFL vary according to the offence in question and includes a term of imprisonment of up to seven years and a fine.

Safeguards

30. Are there any measures in place to safeguard the conduct of investigations? Is there a process of appeal? Is there a process of judicial review?

An order made under the Proceeds of Crime (Jersey) Law 1999 can be subject to appeal.

Under the Terrorism (Jersey) Law 2002, an application can be made to the Minister for Home Affairs to lift the proscription of an organisation. Where such application is refused, the applicant can appeal to the Proscribed Organisations Appeal Commission established under the Terrorism (Jersey) Law 2002.

An appeal of a certain decision made by the Minister for External Relations under SAFL may be made to the Royal Court using a statutory procedure set out therein. The Royal Court can also review any other decisions taken by the Minister in the performance of, or in connection with, his or her functions under the law, other than a decision to which the statutory procedure applies. In determining whether the decision should be set aside, the Royal Court will apply the principles applicable on an application for judicial review (see Question 6).

Financial record keeping

31. What are the general requirements for financial record keeping and disclosure?

Regulated entities must maintain records in accordance with relevant legislation and Codes of Practice published by the JSFC.

In summary, Article 19(2)(a) of the Money Laundering (Jersey) Order 2008 (Money Laundering Order) requires a relevant person to keep copies of evidence of identity and supporting documents and information in respect of a business relationship or one-off transaction which is the subject of customer due diligence measures.

A relevant person must also keep a record containing details of every transaction carried out with or for the customer in the course of a financial services business (Article 19(2)(b), Money Laundering Order). In every case, sufficient information must be recorded to enable the reconstruction of individual transactions.

Records must be kept in such a manner that they can be made available on a timely basis to the JFSC, police officer or customs officer (Article 19(4), Money Laundering Order). Records must be kept for at least five years from:

The end of the business relationship with the customer (Article 20(1), Money Laundering Order).
The completion of the one-off transaction (Article 20(2), Money Laundering Order).
The date when all activities relating to the transaction are completed (Article 20(3), Money Laundering Order).

The JFSC to require a relevant person to keep records for a period that is more than five years.

32. What are the penalties for failure to keep or disclose accurate financial records?

Regulated entities that fail to comply with legislation or a Code of Practice can be subject to fines and regulatory censure (including having a licence suspended).

Any person carrying on a financial services business that contravenes or fails to comply with a requirement of the Money Laundering Order will be subject to two years’ imprisonment or a fine, or both (Article 37, Proceeds of Crime (Jersey) Law 1999). However, it is a defence to prove that they took all reasonable steps and exercised due diligence to avoid breaching a requirement of the Money Laundering Order.

33. Are the financial record keeping rules used to prosecute white-collar crimes?

Financial record keeping rules can be used to prosecute white-collar crimes.

Due diligence

Customer due diligence measures involve:

Identifying an applicant for business and verifying the applicant’s identity.
Identifying any person purporting to act on behalf of the customer and verifying the authority of any person purporting so to act
Identifying the beneficial ownership and control of the applicant and verifying the identity of the beneficial owners and controllers.
Identifying the source of wealth for the structure including its activities and geographical locations.
Identifying the source of funds for monies.
Obtaining information on the purpose and intended nature of the business relationship.
Keeping information up to date, and monitoring activity throughout the course of a relationship to ensure that the activity is consistent with the financial services business’s knowledge of the customer.

Corporate liability

35. Under what circumstances can a corporate body itself be subject to criminal liability?

Corporate liability exists on the same basis as in England. One example of where a company would be subject to criminal liability is where it has failed to prevent the facilitation of tax evasion under the Criminal Finances Act 2017 (UK). The Criminal Finances Act has extra territorial effect and would therefore apply to a Jersey-based regulated corporate service provider or bank with no nexus to UK for instance. For the UK tax offence or foreign tax offence to apply, two elements must be present:

A criminal offence of tax evasion by a taxpayer.
A criminal facilitation of tax evasion by an associated person of the relevant body, who may be an employee, agent or any other person who performs services for or on behalf of the organisation.

Cartels

36. Are cartels prohibited in your jurisdiction? How are cartel offences defined? Under what circumstances can a corporate body be subject to criminal liability for cartel offences?

Part 2 of the Competition (Jersey) Law 2005 includes the relevant provisions prohibiting cartels in Jersey. An undertaking is prohibited from making an arrangement with one or more other undertakings that has the object or effect of hindering to an appreciable extent competition in the supply of goods or services within Jersey or any part of Jersey, except where provided for under the Competition (Jersey) Law 2005.

Immunity and leniency

37. In what circumstances it possible to obtain immunity/leniency for co-operation with the authorities?

The following leniency programs are available under the Channel Islands Competition Law – Guideline 13 on Leniency Policy issued by the Channel Islands Competition & Regulatory Authorities (CICRA) (which includes the Jersey Competition Regulatory Authority (JCRA)):

Full immunity. Subject to satisfying all conditions below, the JCRA will offer full immunity from any financial penalty to the first cartel member to submit evidence and information (unless a business was one of the leaders/instigators of the cartel or coerced others to join the cartel) that assists it to:

Carry out targeted inspections in connection with the alleged cartel.
Establish an infringement of the competition laws.

The applicable conditions for full immunity are that from the time of disclosure the applicant must:

Immediately withdraw from further participation in the cartel (except as directed by the JCRA).
Immediately refrain from any form of communication with the remaining cartel members (except as directed by the JCRA).
Not destroy evidence or disclose the fact/content of the The obligation of non- disclosure does not apply to client-lawyer privileged relationships for legal advice.
Provide the JCRA access to all information available to it regarding the existence, activities and membership of the cartel. The term document is widely interpreted and includes computer files and graphic materials of every kind in the possession, custody or control of applicant, whether or not available publicly.
Maintain continuous and full co-operation with the JCRA throughout the investigation.

Reduction in financial penalties. Where the applicant cannot obtain full immunity or where the JCRA has already started an investigation into the cartel, the applicant can benefit from a reduction in financial penalty, up to 100%, where it is able to provide evidence representing significant added value relative to the evidence already available to the JCRA, to strengthen their ability to evidence an infringement of competition laws. Additionally, a reduction will be granted where the above conditions are equally met (under full immunity) at the discretion of the JCRA.

Additional reduction in financial penalties. Where a business co-operates with the JCRA’s investigations into cartel activity in a particular market (the first market) and is also involved in a completely separate cartel in another market (the second market), then where a reduction is obtained in the first market, an additional reduction in financial penalties will be obtained in the second market.

Cross-border co-operation

38. What international agreements and legal instruments are available for local authorities?

Jersey has an extensive range of legislation to allow for cross border co-operation. Additionally, the Jersey Courts, JSFC and other bodies comply with applicable international standards in this area.

The International Co-Operation (Protection from Liability) (Jersey) Law 2018 makes provision for protection from liability for Jersey public authorities in cases where a public authority provides assistance pursuant to a request made by a relevant authority of a country or territory outside Jersey, and for connected purposes.

Obtaining evidence

Jersey benefits from the following legislation:

Evidence (Proceedings in Other Jurisdictions) (Jersey) Order 1983 which extends certain provisions of the UK Evidence (Proceedings in Other Jurisdictions) Act 1975 to Jersey.
Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970.
Criminal Justice (International Co-operation) (Jersey) Law 2001.
Criminal Justice (International Co-operation) (Jersey) Regulations 2008.
Bankers’ Books Evidence (Jersey) Law 1986.
Investigation of Fraud (Jersey) Law 1991.
Income Tax (Jersey) Law 1961.

Seizing assets

Jersey benefits from the following legislation:

Criminal Justice (International Co-operation) (Jersey) Law 2001.
Criminal Justice (International Co-operation) (Jersey) Regulations 2008.
Proceeds of Crime (Enforcement of Confiscation Orders) (Jersey) Regulations 2008.
Drug Trafficking Offences (Enforcement of Confiscation Orders) (Jersey) Regulations 2008.
Terrorism (Enforcement of External Orders) (Jersey) Regulations 2008.

Sharing information

Jersey can exchange tax information with other countries under the various double taxation agreements multilateral conventions such as the Common Reporting Standard and the Foreign Account Tax Compliance Act (FATCA) and bilateral Tax Information Exchange Agreements (TIEA). On 6 December 2018, Jersey revoked its legislation requiring an exchange of tax information with EU member states under the EU Savings Directive due to the Common Reporting Standard removing the need for the Savings Directive.

39. In what circumstances will domestic criminal courts assert extra-territorial jurisdiction?

A person can be extradited to a designated territory for alleged criminal conduct that occurred in a designated territory, Jersey or elsewhere (Extradition (Jersey) Law 2004). The Jersey law on extradition is based on judicial surrender between states and mutual respect between democratic countries.

40. Does your jurisdiction have any statutes aimed at blocking the assertion of foreign jurisdictions within your territory? Are there statutes aimed at blocking the assertion of foreign jurisdictions within their territory?

Jersey does not have any statutes aimed at blocking the assertion of foreign jurisdictions.

Whistleblowing

41. Are whistleblowers given statutory protection?

There is no specific statutory protection for whistleblowers in Jersey. However, the JFSC has a dedicated, anonymous and untraceable whistleblowing hotline to help it identify regulatory misconduct and the JFSC’s enforcement division has a dedicated Whistleblowing team. The JFSC recommends that whistleblowing policies and procedures be implemented by financial services business.

Reform, trends and developments

42. Are there any impending developments or proposals for reform?

The Government of Jersey is currently considering responses to its consultation on the draft Financial Services (Disclosure and Provision of Information) (Jersey) Law.

During 2019, the Government of Jersey undertook a wide-reaching engagement programme across industry ahead of the public consultation. Appleby was one of several members of the engagement programme, which informed the preparation of the Financial Services (Disclosure and Provision of Information) (Jersey) Law.

The intention of the law is to place on a statutory footing the Financial Action Task Force (FATF)’s Recommendation 24 relating to the beneficial ownership of legal persons. It aims to maintain the current situation where the JFSC collects and makes public certain information, but enables the States of Jersey to make regulations which determine additional information which may be made public.

The results of the consultation have not yet been published but, at present, we expect the law will:

include a requirement for the basic regulating powers of all entities to be filed with the Companies Registry and made publicly available;
introduce enabling provisions to introduce a public register of officers;
include a timely updating of information held by the Companies Registrar;
require that information is provided by a natural person resident in Jersey or by a Jersey regulated trust company service provider;
prevent the misuse of bearer shares; and
control nominee shareholders and directors.

Market practice

43. What are the main steps foreign and local companies are taking to manage their exposure to corruption/corporate crime?

The main steps include:

Developing a robust culture of corporate governance and compliance.
Developing corporate anti-corruption policy and implementing those policies and controls.
Conduct training or refresher training on anti-corruption or corporate crimes.
Re-assessing any risk and modifying any procedures.