Channel Islands Regulatory Calendar 2020

Beneficial ownership registers

On June 19, 2019, the Governments of Jersey, Guernsey and the Isle of Man jointly announced a plan to move towards developing standards of accessibility and transparency consistent with the EU’s approach set out in the fifth Anti-Money Laundering Directive (5MLD). The work, particularly focussing on their central registers of beneficial ownership information for companies, will be completed in three stages in the coming years:

• Stage 1 will see interconnection with the EU member states’ registers and accessible to designated competent authorities and Financial Intelligence Units (FIUs)
• Stage 2 involves providing access to “obligated entities” (i.e. financial service businesses and certain other prescribed businesses) for corporate due diligence purposes
• Stage 3 will see consideration of allowing public access, aligned to the approach taken by the EU.

A detailed summary can be found on the FINRA website.

During 2021 (Stage 1); before end 2022 and as soon as practicable after stage 1 (Stage 2); within 12 months following final outcome of the EU’s implementation of 5MLD in January 2022 (Stage 3).

Brexit

The European Union (Amendment – Withdrawal Agreement) (Jersey) Regulations 2019 came into force on March 13, 2019. These states that if a withdrawal agreement is concluded between the UK and the EU, the arrangements will apply to the Channel Islands during any transition period only in so far as they apply now.

Throughout 2020.

6MLD

On November 12, 2018, the European Parliament published further rules to strengthen measures against money laundering through the 6th EU Money Laundering Directive (6MLD). It contains key amendments:

• Development of a unified list of predicate offences
• Addition of aiding, abetting, attempting and inciting to commit money laundering as a criminal offence
• Increased international co-operation and tougher punishments.

Member states are required to transpose the 6MLD into national law by December 3, 2020. Relevant regulations must be implemented by firms within member states by June 3, 2021.

The Channel Islands are likely to adopt AML/CFT standards equivalent to those of the EU.

December 3, 2020, and June 3, 2021.

Mandatory Disclosure Regime (MDR)

As part of its ongoing commitment to transparency and cooperation, Jersey committed to introducing MDR by December 31, 2019. MDR requires persons involved in the promotion, design, marketing, implementation or management of a relevant arrangement or structure in Jersey to report the arrangement or structure and the users of it to Revenue Jersey.

The Government of Jersey issued a consultation paper in September 2019 seeking feedback on the implementation of MDR as an additional transparency measure to economic substance requirements. The information collected under MDR would be exchanged with relevant jurisdictions subject to the legality of sharing such data.

Consultation responses have been received and draft legislation was lodged on December 31, 2019.

December 31, 2019.

Substance requirements in Jersey and Guernsey

Following the introduction of the Taxation (Companies – Economic Substance) (Jersey) Law 2019 (the Substance Law), Jersey-specific guidance was released to address questions raised relating to economic substance.

The Substance Law imposes economic substance requirements on companies that are tax resident in Jersey; and have conducted relevant activities within financial periods commencing on or after January 01, 2019.

January 01, 2020 (for tax returns for 2019 financial year).

Supervisory Risk Data Collection and National Risk Assessment

The supervisory risk data collection exercise is due to continue for the next two years; the data collected in 2017 and 2018 from regulated businesses will be refreshed for 2019 and 2020. The JFSC is due to start this process in December 2019.

Some sections of the National Risk Assessment (NRA) report for 2017 and 2018 have been drafted, provided to the World Bank and will be revised following workshop discussions and the receipt of any comments. This work is expected to be ongoing until at least the end of this year.

Businesses must provide the JFSC with the 2019 data by March 31, 2020. The report is currently expected to be published in Q2 2020.

March 31, 2020, and Q2 2020.

JFSC Registry

The JFSC is developing an updated Companies Registry taking into consideration new legislation. The important dates are as follows:

• January/February 2020 – The Register of Entities (Jersey) Law 202- (Registry Law) is to enter public consultation;
• October 01, 2020 – The Registry Law is due to be enforced following the public consultation above; and on January 01, 2021, the Registry will become accessible to the public and the first confirmation statement will be due.

January/February 2020, October 01, 2020, and January 01, 2021.

2020 JFSC programme for on-site thematic examinations

The JFSC has announced its programme of thematic examinations for 2020:

• Q1 2020 – Compliance monitoring (continuation from Q4 2019), testing the governance, oversight and effectiveness of a regulated business’s compliance monitoring programme
• Q2 2020 – Wire Transfers, checking businesses’ compliance with the JFSC regulatory framework, specifically relating to FATF Recommendation 16
• Q3 and Q4 2020 – Jersey private funds, assessing how designated service providers are meeting their obligations, including the provision of a declaration to confirm that JPFs they act for are compliant with all applicable AML/CFT requirements and filing returns for each JPF they act for.

From Q1 2020

Mandatory Disclosure Regime (MDR)

Guernsey made a political commitment to introduce legislation for MDR by 31 December 2019. MDR requires persons involved in the promotion, design, marketing, implementation or management of a relevant arrangement or structure in Guernsey to report the arrangement or structure and the users of it to the Revenue Service.

December 31, 2019.

Handbook on Countering Financial Crime and Terrorist Financing

As reported last year, the GFSC issued the final version of its revised Handbook on Countering Financial Crime and Terrorist Financing on November 29, 2019.

In addition to the mandatory reporting deadlines set during 2019, such as those relating to the appointment of an MLCO (as well as subsequent notification to the GFSC) and the completion of business risk assessments, important dates are as follows:

• May 31, 2020 – Firms should review their policies and procedures and controls, and the conclusion of the NRA should be taken into account in any subsequent reviews of policies and procedures
• December 31, 2020 – All high-risk business arrangements must be reviewed in accordance with the new Handbook by this date
• December 31, 2021 – All remaining business arrangements must be reviewed in accordance with the new Handbook by this date.

May 31, 2020, December 31, 2020 and December 31, 2021.

Discussion Paper on proposal to create a single Fiduciary Handbook and revise Pension Rules

The GFSC has issued two consultation papers seeking feedback on potential changes to the regulatory framework under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2000 (as amended) (the Fiduciaries Law). The objective is to ensure the regime continues to be compliant with international standards and appropriate for the Guernsey market.

The consultation papers make detailed proposals for the revisions and consolidation of elements of the policy framework underlying the Fiduciaries Law:

• Reframing the Codes of Practice as a single Fiduciary Handbook that will seek to simplify the rules framework from six separate documents into one, including the consolidation of the conduct of business elements of existing Pension Rules within the new single Fiduciary Handbook
• Revising the current Pension Rules to reflect industry feedback.

Consultation closed November 7, 2019, and after consideration, the GFSC will issue the the Fiduciary Handbook in final form.

Forthcoming, 2020.