Jersey’s financial sector ‘must step up surveillance of Russian customers’ amid ‘increased risk’ of money laundering and financing terrorism or weapons of mass destruction

The financial sector has been told to step up surveillance of all customers linked to Russia or Belarus, due to an “increased risk” of money laundering and financing of terrorism or weapons of mass destruction.

In a joint statement, External Relations Minister Ian Gorst and the Jersey Financial Services Commission warned the island’s biggest industry needed to be ‘particularly vigilant’ as the financial system was more susceptible to ‘abuse’ by those who sought to support Russian President Vladimir Putin. war effort.

The statement adds that the heightened risks identified include money laundering, terrorist financing and proliferation financing – the raising of funds involved in the acquisition of chemical, nuclear or biological weapons.

Jersey is applying sanctions “in parallel” with the UK, with more than 1,000 Russian individuals and businesses penalized following the invasion of Ukraine.

“The Government of Jersey and the Jersey Financial Services Commission consider that there is currently a significantly increased level of money laundering/terrorist financing/proliferation financing risk in the provision of services to associated customer relationships to Russia and Belarus,” the joint statement read.

“Regulated entities are required to exercise due diligence on a risk basis and this obligation is ongoing. Therefore, these customer relationships should be subject to a higher level of due diligence.

Financial firms have been advised to refer to the JFSC’s Beneficial Ownership and Controller Guidelines if they identify a client relationship with a non-Jersey resident Russian/Belarusian person or entity.

The statement adds: “This applies regardless of the person or organization subject to sanctions, and entities should familiarize themselves with common indicators of circumvention of sanctions.

“In accordance with JFSC guidelines, companies should actively review the adequacy of their risk management arrangements with respect to any relevant customer relationship.

“Transactions and agency decisions must be subject to senior management approval and there must be appropriate oversight in place by the board, backed up by compliance oversight.”

He adds that care should be taken to avoid the circumvention of sanctions if the decision is taken to terminate a client relationship.

“In this situation, regulated entities should apply a high level of due diligence to ensure that they are not helping to evade sanctions and to ensure that companies that are party to such transactions are not subject to to penalties.”

Meanwhile, Jersey also confirmed it was suspending all forms of tax cooperation with Russia with immediate effect, following a similar decision by the UK.

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