Proceeds of Crime (Amendment of Law) (Jersey) Regulations 201-

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A decision made 23 February 2015:

MINISTERIAL DECISION REFERENCE: MD-C-2015-0025
DECISION SUMMARY TITLE: Draft Proceeds of Crime (Amendment of Law) (Jersey)Regulations 201-
DECISION SUMMARY AUTHOR:	Legislative and Policy Development, Financial Services	IS THE DECISION SUMMARY PUBLIC OR EXEMPT?		Public
REPORT TITLE: Written Report - Draft Proceeds of Crime (Amendment of Law) (Jersey)Regulations 201-
REPORT AUTHOR OR NAME OF PERSON GIVING REPORT: (if different from Decision Summary Author)	Legislative and Policy Development, Financial Services	IS THE REPORT PUBLIC OR EXEMPT		Public
DECISION AND REASON FOR THE DECISION: The Deputy Chief Minister approved the draft Proceeds of Crime (Amendment of Law) (Jersey)Regulations 201- (the “Draft Regulations”) for lodging and directed that the documents should be lodged au Greffe for debate by the States at the earliest opportunity. The draft Regulations make amendments to the Proceeds of Crime (Jersey) Law 1999 (“POCL”) in furtherance to Jersey’s on-site evaluation by MONEYVAL regarding compliance with the FATF Recommendations on anti-money laundering and countering the financing of terrorism. The amendments specifically deal with FATF Recommendation 1 (criminalisation of Money Laundering). During the on-site visit, in addition to positive comments made by the assessors as to amendments recently made to POCL by virtue of the Proceeds of Crime (Miscellaneous Provisions) (Jersey) Law 2014 comments were made as to the definition of “property” under POCL and the definition of “legal professional privilege”. The draft Regulations seek to address those comments.
RESOURCE IMPLICATIONS: There are no resource implications as a result of this decision.
ACTION REQUIRED: That the Greffier of the States be requested to arrange for the draft Proceeds of Crime (Amendment of Law) (Jersey)Regulations 201- to be lodged au Greffe for debate by the States at the earliest opportunity.
SIGNATURE:			POSITION: SENATOR ANDREW GREEN MBE DEPUTY CHIEF MINISTER OF JERSEY

DATE SIGNED			EFFECTIVE DATE OF THE DECISION

Proceeds of Crime (Amendment of Law) (Jersey) Regulations 201-

WRITTEN REPORT

Proceeds of Crime (Amendment of Law) (Jersey) Regulations 201- (the “draft Regulations”)

Overview

The draft Regulations make amendments to the Proceeds of Crime (Jersey) Law 1999 (“POCL”) in furtherance to Jersey’s on-site evaluation by MONEYVAL regarding compliance with the FATF Recommendations on anti-money laundering and countering the financing of terrorism. The amendments specifically deal with FATF Recommendation 1 (criminalisation of Money Laundering).

During the on-site visit, in addition to positive comments made by the evaluators as to amendments recently made to POCL by virtue of the Proceeds of Crime (Miscellaneous Provisions) (Jersey) Law 2014 comments were made as to the definition of “property” and the definition of “legal professional privilege” under POCL.

Definition of “Property”

The definition of “property” is relevant to confiscation of property under POCL. The evaluators commented that whilst the definition of “property” in POCL was broad, in their opinion, the international standards in this regard were not comprehensively transposed in domestic legislation. The evaluators considered that the language of the conventions (and the FATF definitions) clearly covering legal documents or instruments evidencing title to or interest in such assets should be adopted to avoid legal uncertainty. They further commented that the UK Proceeds of Crime Act 2002 contained extended definitions of property which could also be relevant in the context of money laundering in Jersey. The evaluators urged the insular authorities to reconsider the relevance of these terms in the local context.

The Chief Minister’s Department along with the Law Officers’ department and with specific advice from the Solicitor General have considered both s.340 of the UK Proceeds of Crime Act 2002, the FATF definitions and the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of Proceeds of Crime and on the Financing of Terrorism (“the Warsaw Convention”) and are of the view that the revised definition contained in draft Regulation 1(b) should therefore meet the evaluators concerns.

Definition of Legal Professional Privilege

The evaluators commented that they considered that the definition of legal professional privilege in POCL is wider than the customary law definition. They went on to recommend that the definition in the POCL should be removed. The Chief Minister’s Department along with the Law Officers’ department and with specific advice from the Solicitor General have considered the matter and have concluded that is therefore advisable to remove the definition of legal professional privilege in POCL. Draft Regulation 1(a) should therefore meet the evaluators concerns.

By removing the definition in Article 1(1) of the Proceeds of Crime Law of “items subject to legal privilege,” any references to legal privilege in that Law shall have the meaning as acquired by the customary law of Jersey. In Bene Ltd v VAR Hanson & Partners [1997] JLR N10a, the Royal Court comprehensively described direct communications between a lawyer and his client (or via third party agents) to be subject to legal privilege if they are confidential and for the dominant purpose of seeking or giving legal advice on the client’s legal position or rights (“legal advice privilege”). Also privileged are confidential communications between a lawyer and his client, non-professional agent or third party, made after litigation has been commenced or contemplated and for the sole or dominant purpose of advising in relation to, or seeking evidence or information for, such litigation (“litigation privilege”).

Financial and Manpower Implications

There are no financial or manpower implications as a result of the States adopting the draft Regulations.

Recommendation

It is recommended that the Deputy Chief Minister request that the Greffier of the States arrange for the draft Regulations to be lodged and that they are debated by the States at the earliest opportunity.

LEGISLATIVE AND POLICY DEVELOPMENT

FINANCIAL SERVICES

CHIEF MINISTER’S DEPARTMENT

23 FEBRUARY 2015