Jersey: Jersey Implements Anti-Terrorism Funding Measures

On 10 October 2001 Jersey adopted new measures that are designed to enhance the existing legislation that seeks to prevent the use of financial services by terrorist organisations. The Terrorism (United Nations Measures) (Channel Islands) Order 2001 provides for a maximum jail sentence of seven years for anyone knowingly dealing in any financial assets which may be connected with terrorist activity. The Order, which is virtually identical to the legislation introduced in the City of London in recent weeks, enables the Jersey authorities to obtain information on, and to freeze any assets held by or on behalf of, suspected terrorists.

Jersey intends to repeal and replace the Prevention of Terrorism (Jersey) Law 1996 by new legislation to pave the way for the application in Jersey of the UN Conventions for the Suppression of Terrorist Bombings and for the Suppression of Terrorist Financing. In essence, this means that Jersey will be able to try an individual for terrorist crimes, in particular for terrorist financing crimes, committed outside Jersey. The Island will then be fully compliant with the terms of the Convention.

Phil Austin, Chief Executive of Jersey Finance, is fully supportive of Jersey’s fast-track approach, and has called upon all jurisdictions, both onshore and offshore, to introduce tough counter-terrorism funding legislation, stating: "Terrorist financing is a global problem and it has to be tackled by the Governments, regulators and finance industries around the world working together.

"Regulators and law enforcement agencies have acknowledged the significant level of regulation in place in Jersey. However, other commentators often group all offshore centres together in some sort of ‘catch all’ classification that inaccurately implies we all too easily allow money laundering, and that we are cloaked in bank secrecy.

"For its part, Jersey’s laws against terrorism and laundering the proceeds of crime are at the cutting edge and our ‘know your customer’ rules equate with the best international practice. Jersey’s anti money laundering defences were examined by an international evaluation team which included representatives from the US, UK and France and in 1999 concluded that the Island was "close to complete adherence" to the 40 recommendations of FATF."

The Financial Action Task Force (FATF) itself has extended its mandate beyond money laundering to encompass the world-wide effort to combat terrorist financing. After its 31 October 2001 extraordinary plenary meeting FATF President Clarie Lo announced: "Today the FATF has issued new international standards to combat terrorist financing, which we call on all countries in the world to adopt and implement. Implementation of these Special Recommendations will deny terrorists and their supporters access to the international financial system." Jersey is also likely to incorporate these enhancements into the new Law.

Despite somewhat hysterical criticism of its ‘offshore’ status, Jersey’s efforts to thwart international crime have received plaudits from, among others, the US Department of State, the FBI and the G7 Financial Stability Working Group. The adoption of these new anti-terrorism measures, in addition to the regulation of trust and company administration introduced earlier in the year, provide further evidence that Jersey is one of the world’s best-regulated financial centres, and certainly not a safe haven for illicit funds.