Plans to make off-island cannabis proceeds legal

Wednesday 19 May 2021

The External Relations Minister has put forward plans to change the law so that money made from the cannabis industry in countries where it is lawful would not be deemed illegal when moved into Jersey.

The rules would mean proceeds from the cannabis industry could be kept on-island legally, provided the activity came from a country which had been okayed by the Government.

Pictured: Off-island cannabis money can get "stuck" in the island, as the legal grey area creates confusion over what can be done with it.

The new propositions have been lodged by Senator Ian Gorst, who would also be put in charge of deciding which countries are given the green light, based on reviews carried out by the Financial Action Task Force.

On selecting the countries, it says the new order would ensure Jersey only deals in money with countries that apply “suitably equivalent money laundering controls to Jersey.”

Under current laws, any proceeds generated from the production, supply, use, export or import of cannabis outside of the island could be considered criminal property.

Citing some of the problems with these laws, a report explaining his proposition illustrates that several countries that have legalised the production and use of cannabis as a recreational drug.

Pictured: The proposition has been brought forward by External Relations Minister Senator Ian Gorst.

However, even though that activity is lawful in its own country, any money made from it put into Jersey would be treated as proceeds of crime, as Jersey's own laws only allow for the licensing of medicinal cannabis.

Due to Jersey’s global finance industry though, local financial services can be exposed to proceeds linked to lawful cannabis production and supply in places like Canada and the United States.

When it notices these proceeds, a financial services business may have to file a report on them, with failure to do so possibly being deemed a criminal offence.

Pictured: The new amendment seeks to change the rules so that funds made from cannabis in other countries where it is legal, are no longer considered 'proceeds of crime'.

However, because of the legal grey area, police may not be able to give the business any directions, and therefore the investments could become “stuck” on the island.

This new legislation would seek to clarify which investments should not be treated as proceeds of crime, reflecting more contemporary cannabis laws and restrictions globally.

However, it emphasises that for any countries where the conduct is still illegal, the money will still remain ‘proceeds of crime’ in Jersey.

The proposition is due for debate by States Members on 29 June.