A lack of robust policy and inadequate staff training has left Jersey more vulnerable to money laundering.
Today, the first National Risk Assessment (NRA) of money laundering has been published by the Government of Jersey. The report aims to identify where the island is most likely to be used by criminals to launder the proceeds of crime.
Certain areas of the financial sector, namely banking, trusts and funds, were deemed as being at a higher risk than others as these sectors are more vulnerable to ‘layering’ – where money is concealed through a series of complex transactions and often internationally.
A lack of robust policy and weaknesses in intelligence gathering were also highlighted as problem areas in the report.
The assessment said Jersey’s Financial Intelligence Unit had in the past faced difficulties securing adequate funding for staff training. This had led “to the absence of appropriate and relevant up-skilling of staff and a process that will not have kept pace with developments in money laundering”.
The NRA is the first public, centrally co- ordinated risk assessment of money laundering undertaken in the Island. It analyses financial activity in Jersey between 2013 to 2018.
The report enables stakeholders – including the government, the Jersey Financial Services Commission, local law enforcement agencies, and industry – to 'increase their understanding of the risk of Jersey being used by criminals to launder the proceeds of crime'.
The island deals with more than a million customers worldwide and in excess of a trillion GBP of wealth.
The NRA also states that extra care should be taken when doing business with Hong Kong, India, Ireland, Kenya, Russia, Switzerland, UAE, the UK and USA as these jurisdictions were more vulnerable to laundering but that a better country-by-country understanding of risk by trust companies was needed.
However, it also highlights 'this does not mean the entire jurisdiction presents a threat, nor that every activity in that jurisdiction presents a threat'.
The report will be used to create an action plan over the next 12 months.