JERSEY hopes it can avoid the fate of Monaco when its financial services sector is reviewed this year, after the offshore centre received a ‘scathing’ assessment.
The government’s director of financial crime strategy George Pearmain called the Monaco evaluation ‘very scathing’ but stressed that the Island was in a different position, and better prepared to face international scrutiny.
Financial Crime Strategy associate director Richard Pedley said the Island was ‘not doomed’ but also ‘not home free’, when members of Jersey’s finance industry met yesterday to hear about the latest preparations for the Island’s own Moneyval assessment.
This year is a key one for the Jersey’s primary sector, with a team from Moneyval – a European organisation which assesses compliance with international standards to counter money-laundering and the financing of terrorism – due to visit in September.
A bad report could have dire consequences for Jersey, with the Island particularly keen to avoid being added to a ‘grey list’ of jurisdictions which are judged to have inadequate laws, practices and resources to tackle financial crime.
Last week, Moneyval published its assessment of Monaco. The Mediterranean principality has not joined FAFT’s grey list, but the international watchdog is expected to discuss the report at its next meeting at the end of February.
Mr Pearmain said: ‘Monaco’s risk profile is not dissimilar to Jersey’s, but its approach and preparation [for evaluation] was very different; for instance, Monaco did not make any legislative changes until last April, whereas Jersey has already taken several important steps.’
Mr Pearmain added that Jersey’s position was more akin to another recently evaluated jurisdiction, Estonia, which had received a far more favourable report to Monaco and ‘invested substantially in its Financial Intelligence Unit’.
Despite Jersey being better prepared – with the Island already passing laws to introduce Deferred Prosecution Agreements and to make ‘Failing to Prevent’ financial crime an offence – the finance industry is not expected to get a clean bill of health.
Richard Pedley, associate director of Financial Crime Strategy, told the meeting: ‘Anecdotally, there seems to be two schools of thought in the run-up to the evaluation: one is “it’s all going to be fine, so there’s no point doing anything”; and the other is that “we’re all completely doomed”.
‘I don’t believe either is correct, and the truth is somewhere in the middle. We are not doomed but we are not home free, either. We are better prepared than others, and will be even more prepared by September’s on-site visit.’
‘One thing we can guarantee is that we will be well prepared, which we expect will serve to reduce the scope of Moneyval’s inevitable recommendations when they come out next year.’