Europe’s view on Jersey’s finance regulation due today – positive verdict expected

Tuesday 24 May 2016

The long-awaited Moneyval assessment of how effectively Jersey regulates financial services firms is due to be released today.

Elements of the report, which follows an assessment completed in January 2015, have already drifted out – the report praises Jersey for being in a “leading position” in meeting transparency standards, but is understood to criticise a lack of money laundering prosecutions.

The report comes at a time when the offshore financial services world is under the microscope, following the release of the “Panama Papers” that exposed Panamanian firm Mossack Fonseca’s activities for clients, and the international London anti-corruption conference earlier this month.

Chief Minister Ian Gorst is due to speak at a press conference about the report later today.

Earlier this month he released correspondence between himself and UK Chancellor George Osborn in which he quoted the unreleased Moneyval report as saying: “Jersey's combination of a central register of the UBO with a high level of vetting/evaluation not found elsewhere and regulation of TCSPs of a standard found in few other jurisdictions has been widely recognised by international organisations and individual jurisdictions as placing Jersey in a leading position in meeting standards of beneficial ownership transparency.”

In an interview with monthly business magazine Connect this month, the head of the financial services watchdog said that the report was positive, but that it raised the issue of money laundering prosecutions.

Jersey Financial Services Commission Director General John Harris said that he was concerned that a largely positive report would be “spun” as a negative story, despite the majority of findings being positive.

He said: “What I am now dreading is the process whereby the report inevitably will focus on some things that can still be done better, and I am worried about those being taken out of context in the current debate.

“There has been a bit of a slowing in prosecutions for money laundering in recent times, so Moneyval have picked that up and said ‘come on guys, you’ve been good at this historically but more is needed’ – but actually they say that about every single jurisdiction they review.”