Gibraltar warning for finance industry before key inspection

Friday 15 July 2022

Jersey cannot take it for granted that its finance industry will get a clean bill of health in a crucial assessment next year, the new Treasury Minister has warned.

Deputy Ian Gorst said that the examples of fellow international finance centres Gibraltar and the Cayman Islands – which have been added to an international ‘grey list’ due to ‘strategic deficiencies’ in their ability to combat financial crime – was proof that Jersey could not be complacent.

Deputy Gorst spoke to a large gathering of finance professionals organised by the Government to keep them up to date of Jersey’s forthcoming inspection by Moneyval, which is the European arm of the Financial Action Task Force.

FATF was set up in 1989 by the G7 group of leading economies and describes itself as the global money laundering and terrorist financing watchdog.

The last Moneyval inspection of Jersey was in 2015, when the organisation judged that the island was compliant with 48 of the 49 FATF recommendations. It was negatively marked for its perceived lack of enforcement against businesses for their non-compliance.

It is likely to be another decade before Jersey is inspected again after next year’s visit.

Gibraltar, where several Jersey-based firms also have offices, was added to FATF’s ‘grey list’ – joining countries such as Pakistan, Panama, the UAE, Nicaragua and Myanmar – last month.

Cayman was added to the FATF grey list last February. Both jurisdictions are working with FAFT to get themselves removed.

Pictured: Gibraltar was recently added to FAFT's 'grey list'. Only North Korea and Iran are on the 'black list'.

Malta was added to the grey list in June last year but removed last month after FATF concluded the island had strengthened its oversight of the financial sector.

Senator Gorst said: “Over the last four years an enormous amount of work has been done not only by Government but also by Island agencies and you the industry as well to ensure that we comply with the international standards as set by FATF. 

“These standards are universally recognised as the benchmark in the fight against money laundering and terrorist financing.

"It has been said many times, but bears repeating, that financial crime is constantly evolving and becoming more sophisticated and complex, meaning that new threats are regularly emerging for Jersey. 

“As an international finance centre, we are inevitably exposed to such threats and have a social and economic duty to do all we can to detect and prevent financial crime.”

The Government, working with the Jersey Financial Services Commission and the industry, has been preparing for next September’s Moneyeval visit for some time, which included carrying out a mock review last year.

The island also published its first ‘national risk assessment’ of the finance industry for money laundering in September 2020 and terrorist financing in April 2021.

The purpose of the event, held at the Radisson on Thursday, was to update the industry on progress and inform them of what they need to do to prepare. 

Moneyeval inspectors will visit individual firms as well as the regulator and government departments.

New External Relations Minister Philip Ozouf also spoke at the conference. Responsibility for financial services will soon transfer from his department to the Treasury.

Meanwhile, Jersey had frozen Russian-linked assets worth £1,070,600,000 by the end of June, £1.8m more than the amount at the end of May.

16 more sanction compliance forms were submitted to the Government over the month, making a total of 166.