MONEYVAL, a permanent monitoring body of the Council of Europe, which carries out assessments and issues reports on a raft of financial centres, has just completed its two-year probe of Jersey.

(Updates with reaction from Taylor Wessing barrister.)

European compliance organisation MONEYVAL has issued high marks for Jersey’s anti-money laundering and counter-terrorism finance regime, drawing cheers from the offshore jurisdiction today.

MONEYVAL, or the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, part of the Council of Europe, has wrapped up a two-year assessment of Jersey’s AML and CTF regime. Jersey was compliant or largely compliant with 39 out of 40 recommendations, the European body’s report said. Jersey needs to make no “fundamental improvements” to its regime. 

The body said it "commends" the UK Crown Dependency of Jersey for taking steps to strengthen its legal and regulatory framework to combat money laundering, financing of terrorism and financing of proliferation. It also called on Jersey to "further reinforce" how its frameworks for investigating and prosecuting money laundering are put into practice.

"On the operational side, Jersey has achieved a high level of effectiveness for its understanding of [money laundering/terrorism financing] risks and implementing adequate AML/CFT policies and strategies to mitigate them. The report commends the authorities for concluding multiple high-quality, comprehensive and detailed risk assessment products informed by a variety of sources. National co-ordination and co-operation between agencies, as well as private sector awareness of risks are also strengths of the system," MONEYVAL said. 

The island's financial services industry was understandably delighted at the report.

“This report, which is produced in line with agreed international standards, is a strong endorsement of Jersey’s capabilities as a jurisdiction in combatting financial crime and reflects its commitment to upholding the very highest standards on the global stage,” Joe Moynihan (main picture), CEO of Jersey Finance, said. “It is a report that should send a powerful and positive message to investors around the world and give them confidence in Jersey’s current and future standing.”

MONEYVAL’s verdict on the jurisdiction comes at a time when the UK – with which Jersey is closely linked – is now under a new Labour government. The UK has moved against resident non-domiciled residents (a step already taken by the previous Conservative government), and is reportedly mulling tax squeezes on higher earners and owners of capital, possibly encouraging HNW individuals to move offshore. 

Why it matters
MONEYVAL and the Financial Action Task Force (FATF) – an intergovernmental group focused on fighting dirty money – are influential in whether offshore and onshore centres thrive or decline. Their various “lists” of compliant, non-compliant or mixed performance can benefit a country or cast a shadow, such as causing banks to cut services, or others to increase business activities. (The existence of these lists are controversial at times. This publication has heard industry figures complain down the years that they give large clubs of nations power to punish centres in ways that are unwarranted.)

To explain the difference between MONEYVAL and FATF, the former body is designed to maintain the focus on areas where a particular member may not have fully implemented the FATF standards or where it might have failed to make meaningful progress in addressing identified shortcomings.

In contrast to the positive verdict on Jersey, in a more negative case of 2023, MONEYVAL found that Monaco’s AML regime was “uneven” and that the Mediterranean jurisdiction needed to step up its efforts to tighten standards. 

In May 2021, Malta, a jurisdiction that had been under a cloud because of compliance shortcomings and worries about dirty money, improved measures to combat money laundering and terrorist financing, demonstrating "significant progress" in the level of compliance with FATF standards, the Council of Europe said. 

Prosecutions trend
"There was a clear focus in the report on the low levels of prosecutions for third party money laundering offences,” Barrister Emma Jordan, partner at Taylor Wessing, the global law firm, said in a comment about the MONEYVAL report. (She is dual qualified as an English Barrister and a Jersey Advocate, allowing her to represent clients in the Jersey Courts directly.)

“Jersey has recently increased the criminalisation of offences dealing with procedures rather than substantive money laundering, including enacting an offence of failure to prevent money laundering. These new laws are targeted at third parties like financial institutions and trust companies,” Jordan said. 

"Looking ahead, we are likely to see greater resources dedicated to prosecuting these crimes in Jersey in the future. A particular focus of the report was the Jersey Financial Services Commission practice of relying on a self-declaration to report criminal convictions followed by checks in specific databases instead of requesting criminal record certificates as a routine practice. This is considered a vulnerability, for obvious reasons,” Jordan added.