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We will continue to be clear that Jersey does not need, nor does it wish to be associated with aggressive tax planning schemes. We do not support that which goes beyond legitimate tax planning for commercial purposes, nor do we want our service providers to host abusive tax schemes designed to frustrate the will of national parliaments.

Chief Minister
Government of Jersey, 2012

Political Will and Legislation

It is estimated the finance sector contributes almost three-fifths of the tax revenue in Jersey in various ways, including personal taxes paid by employees, corporate taxes on business profits and, to a lesser extent, goods and services taxes on sales for domestic use.

In addition, the financial services sector accounts for almost two-fifths of gross value added and over one in five people in employment.

Given the importance of the International Finance Centre to the Island’s economy, jobs and tax receipts, there is no willingness to jeopardise its reputation and therefore no appetite for Jersey to be used to facilitate foreign tax evasion.

Combatting Financial Crime Together

Jersey has a responsibility to both its local clients and the broader international market. To uphold the integrity of the global financial system, the jurisdiction must do its share in effectively combatting financial crime.

This requires collaboration between Government, industry, regulators and agencies. Together, Jersey has adopted the following vision:

“For the public and private sectors to deliver a holistic plan that protects Jersey against financial crime, which prevents harm to our jurisdictional society and international stakeholders, upholds the position of Jersey as a responsible and cooperative International Financial Centre, and supports legitimate growth and prosperity, combating financial crime TOGETHER.”

Comprehensive Legal Framework

In recent decades, Jersey has developed a robust legislative framework to combat foreign tax evasion. This framework operates on multiple layers:

1999 Proceeds of Crime (Jersey) Law

Firstly, there is a law prohibiting the facilitation of tax evasion, the 1999 Proceeds of Crime (Jersey) Law. Although tax evasion is not the only target of this law, the legislation forms the centre of Jersey’s anti-facilitation of tax evasion regime. Articles within the law make it a legal duty to disclose any known instances, and, as proceeds derived from tax evasion are treated as the proceeds of crime, makes it an offence for a financial services business to fail to prevent money laundering where the money is the proceeds of tax evasion.

Money-Laundering Order of 2008

Secondly, Jersey businesses must adhere to the Money-Laundering Order of 2008 which mandates companies instituting policies and procedures based around a risk-based approach. The legislation ensures companies have policies to prevent the facilitation of tax evasion with specific instructions for internal policies and procedures around the identification of customers and their activities, covering the life cycle of a business relationship. This means that clients which are considered riskier should be monitored more frequently and in more depth than clients identified as having a lower risk profile.

2008 Proceeds of Crime (Supervisory Bodies) (Jersey) Law

Thirdly, a layer of legislation for a regulator, the 2008 Proceeds of Crime (Supervisory Bodies) (Jersey) law, empowers the regulator, the Jersey Financial Services Commission (JFSC), to enforce anti-tax evasion policies among businesses. The JFSC oversees all regulated businesses and applies a risk-based regulatory approach. Additionally, Schedule Two businesses, such Financial Institutions, Designated Non-Financial Businesses and Professions and Virtual Asset Service Providers (VASPs), must register with specific regulators designated by the Commission. All businesses under the regulator's oversight must be registered with the Commission.

Tax Information Exchange Agreements

Lastly, Jersey authorities can share information internationally to identify and prosecute tax evasion cases. As a member of the Egmont Group, Jersey’s FIU (detailed below) exchanges information with other financial intelligence units to facilitate cross-border law enforcement and intelligence sharing via the Egmont Secure Web. A multiplicity of agreements allows Jersey to cooperate with as many jurisdictions as possible. Taxation agreements are signed by the Government and allow the tax authorities of different jurisdictions to communicate. As of 30 April 2024, the Island has tax information exchange relationships with 104 countries under Tax Information Exchange Agreements (TIEAs), Double Tax Agreements (DTAs) and the multilateral convention. The jurisdiction has 38 bilateral TIEAs.

International Cooperation

Jersey willingly collaborates with other jurisdictions and demonstrates its commitment to combating global tax evasion through proactive engagement in international tax initiatives.

Jersey is committed to the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-operation and Development (OECD). CRS makes the process of exchanging financial information with other countries easier by facilitating automatic, annual exchange under a safe and agreed framework. Jersey is also part of the multilateral competent authority agreement which supplements CRS. This means that as a smaller jurisdiction, which lacks the geopolitical standing to sign hundreds of bilateral treaties, Jersey can still have an extensive information sharing network.

Additionally, information on United States customers is reported to the US’s Internal Revenue Service (IRS) by financial institutions in Jersey under Jersey’s 2013 agreement with the United States to implement its Foreign Account Tax Compliance Act (FATCA).

Information exchange with other jurisdictions is also vital for the success of investigations, since most successful enforcement occurs where the crimes are perpetrated. Various regulatory bodies within Jersey, including the Financial Intelligence Unit and the Law Officers’ Department, can share information when working with international counterparts to facilitate investigations.

Beneficial ownership registers aid foreign tax authorities by making it more challenging for individuals to use structures across countries to secretly hold income and evade taxes. Established in 1998, Jersey’s beneficial ownership register is the earliest known. Although not publicly available, a comprehensive register of beneficial owners, in addition to a public-facing significant persons register, are managed by the JFSC and ensure that Jersey has reliable information to share, as part of an effective information exchange regime. Jersey’s ‘Exchange of Notes’ Agreement with the UK, for example, enables rapid sharing of beneficial ownership information in as little as one hour.

In addition to its proactive stance on information exchange, Jersey has been at the forefront of implementing anti-BEPS (Base Erosion and Profit Shifting) measures. Since joining the BEPS inclusive framework in 2016, Jersey has swiftly adopted core anti-BEPS recommendations, reflecting its commitment to combating corporate tax abuse.

The BEPS framework aims to curb multinational profit-shifting, where companies exploit differing tax rates by shifting profits to low-tax jurisdictions. Jersey’s 2019 Taxation (Companies – Economic Substance) Law requires companies registered in Jersey to prove genuine business activity, preventing them from artificially reporting profits without real operations. The 2021 Taxation (Partnerships – Economic Substance) Law extends this test to partnerships. The Comptroller conducts the economic substance test and notifies relevant foreign authorities if an entity fails, potentially resulting in financial penalties.

In summary, Jersey’s comprehensive approach to combatting tax evasion encompasses active participation in international initiatives, proactive information exchange efforts, stringent regulatory compliance, and a commitment to upholding the highest standards of integrity and transparency.

The Role of Public Agencies

In Jersey, specialised agencies collaborate to align local activities with the jurisdiction’s low national risk appetite.

This process involves three stages: detection, investigation and enforcement, though in practice agencies work over multiple stages. The Government provides oversight, publishing periodic strategies and suggesting risk mitigation measures for a variety of possible illegitimate activities, encompassing money laundering, terrorist financing, and weapons proliferation.

Detection:

Jersey’s agencies detect crime using a variety of information. The two central pillars of detecting tax abuse are Suspicious Activity Reports (SARs) and information requests.

Detection involves collecting information that illegal activity may be taking place. One way this is done is through SARs, which are sent to the Financial Intelligence Unit by a person or financial institution that has knowledge or suspicion of money laundering. Another way is for information to be received from overseas by the Financial Intelligence Unit, Law Officers Department and Jersey Financial Services Commission.

Investigation:

Conducted by several agencies. The Joint Financial Crimes Unit, a specialist agency within the States of Jersey Police, is responsible for investigating domestic financial crime. The Economic Crimes and Confiscation Unit, a specialist unit within the Law Officers’ Department, investigates serious and complex financial crime which often involves overseas predicate offences.

Information exchange with other jurisdictions is vital for the success of investigations, since most

successful enforcement occurs where the crimes are perpetrated. This support involves assisting foreign authorities investigating financial crimes, transitioning from criminal to civil proceedings for more effective outcomes in revenue recovery or admission of guilt. Jersey is diligent in its information-sharing, but other jurisdictions are not always as responsive as they might be.

Effective enforcement relies on the credible threat of prosecution, backed by capable law enforcement and judicial processes demonstrating the likelihood of conviction. Jersey’s reputable legal system and various agencies are a strong deterrent to would-be criminals.

Enforcement:

This is the responsibility of the Attorney General and is prosecuted personally or by Crown Advocates within the Law Officers’ Department or Economic Crimes and Confiscation Unit.

Authorities Involvement with Different Stages of a Tax Crime Prosecution

To understand how authorities’ involvement with different stages of a tax crime prosecution work together, we can examine their individual roles

Financial Intelligence Unit

Jersey’s operationally independent Financial Intelligence Unit (FIU) is the designated central authority for the receipt, analysis and dissemination of intelligence.

Prior to 2023, Jersey’s FIU was part of the jurisdiction’s law enforcement, resourced mostly by civilian intelligence officers and analysts. At the start of 2023, it transitioned to an operationally independent, administrative unit, ensuring it complies with international standards by granting it operational independence and autonomy. For security reasons, the FIU remains within States of Jersey Police premises, utilising their IT systems, and has access to the police databases.

The Director of the FIU is a position with equivalent standing to the Chief of Police. Significant investment in resources within the FIU has enhanced Jersey’s position in sustaining a robust response to money laundering, terrorist financing and proliferation. Under the new administrative operational model, all resources are ringfenced, with only the Director (or their delegate) able to consent to resources being used outside normal protocols. The FIU Governance Board provides strategic oversight. Jersey collaborates globally with other financial intelligence units as a member of the Egmont Group to facilitate cross border law enforcement and intelligence sharing.

Revenue Jersey

Revenue Jersey forms part of the Treasury and Exchequer department in the Government of Jersey. It is the agency responsible for administering taxation and implementing economic substance and the base erosion and profit shifting (BEPS) framework in the Island.

Its role includes administering and collecting domestic taxes including Personal Income Tax, Corporate Income Tax, Goods and Services Tax and Land Transaction Tax. Revenue Jersey is further responsible for collection of Social Security contributions.

Revenue Jersey is also responsible for administering requests for exchange of information received from overseas tax authorities. In addition, it enforces the collection and exchange of information on financial accounts from financial institutions in the Island under the Common Reporting Standard and Foreign Account Tax Compliance Act.

Another role of Revenue Jersey is investigating domestic tax evasion, and ensuring Jersey’s international tax exchange agreements are properly administered. This includes exchange of information on request and automatic exchange of information between competent authorities. Revenue Jersey has direct access to Jersey’s central register of beneficial ownership information and the register of companies and legal entities.

This ensures the agency has access to the information on all entities incorporated or registered in Jersey.

There is a wide net drawn for who must provide tax information in Jersey. All companies registered in Jersey are required to submit an annual tax return as are all entities incorporated overseas which are either resident for tax purposes or carrying on a business in Jersey.

Joint Financial Crimes Unit (JFCU)

The Joint Financial Crimes Unit (JFCU) is an investigative unit, the primary role of which is to investigate complex and serious financial crime. This includes complex fraud and money laundering.

Based at the Police Headquarters, the JFCU works closely with other teams within the States of Jersey Police and Jersey Customs and Immigration Service to identify and investigate money laundering offences associated with the generation of illegal profits, for example drug trafficking.

Additional responsibilities of the JFCU include investigating suspected terrorist financing and proliferation financing offences, and the identification of assets associated with criminal cases in the Royal Court of Jersey which may be subject to confiscation.

Roles within the team at the JFCU include Detective Inspector, Detective Sergeant, Detective Constables along with investigators, analysts and support officers. In addition, two full-time lawyers provide advice and guidance on complex legal matters, investigations and charging decisions. All members of the JFCU undergo specialist training through the City of London Police in the United Kingdom. They are trained in the investigation and management of financial crime investigations, and all members undertake a diploma in anti-money laundering and countering the financing of terrorism.

All the core information systems of the States of Jersey Police and Jersey Customs and Immigration Service, as well as open-source material and partner agency information through access and data sharing agreements, are accessible to the JFCU.

The Law Officers’ Department

The Law Officers’ Department in Jersey is responsible for investigating money laundering and terrorist financing.

It comprises of the Criminal Division and the Civil Division, backed by a small administration team. The Criminal Court, the Economic Crime and Confiscation Unit (ECCU) and the Mutual Legal Assistance Team (MLA) are the three teams which make up the Criminal Division.

The Attorney General and their deputy, the Solicitor General, lead the Law Officers’ Department, alongside advocates, solicitors, legal professionals, investigators and other staff. Independent from the Government of Jersey, the Attorney General and Solicitor General are appointed by the Crown.

Along with the States of Jersey Police and Jersey Customs and Immigration Service, the Law Officers’ Department is responsible for the investigation of money laundering and terrorist financing. The Attorney General has statutory investigatory powers in respect of cases of serious or complex fraud, and is the prosecuting authority in Jersey.

In the ECCU, prosecutors and investigators work together to build prosecution files, with individual legal advisors and investigators assigned to specific cases. Operating protocol lists specific criteria that must be met before investigations are accepted within the ECCU.

The unit investigates and prosecutes complex fraud, money laundering and terrorist financing cases, as well as serious systems and controls failings (preventative measures).

Resources in the ECCU have increased significantly in recent years to 16 staff at the start of 2023. The litigation support system, Accelerate, helps the unit deal with document heavy cases and evidence in foreign languages. They also enhance their resources through secondments from the United Kingdom’s Serious Fraud Office and through the engagement of independent counsel and forensic accountants.

The Attorney General is the central authority for the Mutual Legal Assistance Team, both incoming and outgoing. The team is responsible for gathering written and oral evidence to assist domestic and overseas criminal or civil asset recovery investigations and proceedings, and they deal with freezing orders, seizing orders and confiscation of the proceeds of crime.

The Jersey Financial Services Commission (JFSC)

The financial services regulator for Jersey, the Jersey Financial Services Commission (JFSC), is a statutory body corporate, established under the Financial Services Commission (Jersey) Law 1998.

It is independent of Government and is accountable for its performance to the States Assembly through the Chief Minister. It is governed by a board of nine Commissioners and has around 200 staff.

The JFSC has the legal authority to conduct both offsite and onsite inspections of supervised individuals, enforce the submission of information or documents, and conduct investigations. In addition, the JFSC is vested with statutory powers to require supervised individuals rectify non-compliance with their obligations in relation to Anti-Money Laundering (AML), Combatting the Financing of Terrorism (CFT) and Combatting Proliferation Financing (CFP).

In the event of non-compliance by a supervised individual with their AML/CFT/CFP obligations, they have the authority to impose various administrative sanctions, including fines. It serves as the exclusive regulatory body responsible for overseeing prudential and conduct supervision within the financial services industry in Jersey. The JFSC manages Jersey’s Registry, which encompasses fifteen registers. These registers include the central register of beneficial ownership, as well as registers for companies, business names, foundations, partnerships and security interests.

The JFSC is frequently reviewing its processes and activities to strengthen its response to money laundering, financing of terrorism and proliferation financing.

Throughout the first quarter of 2023, the JFSC undertook a redrafting of the AML/CFT/CPF Supervision Manual that outlines how it undertakes its activities to ensure Supervised Persons understand money laundering and terrorist financing risks, and fully comply with AML/CFT/CPF obligations. The revised manual came into effect on 1 July 2023.

Conclusion

Leveraging the Island’s extensive legal framework and the collaboration among its agencies dedicated to tackling tax crime, Jersey remains resolute in its stance and its aversion to conducting business rooted in foreign tax evasion or aggressive avoidance.

Upholding the integrity of the global financial system and combating financial crime are paramount objectives and Government agencies stand at the forefront of this endeavour, ensuring the integrity of Jersey’s financial system, and upholding its reputation as a responsible International Finance Centre.

More Information ›

For further evidence of Jersey’s long-standing history of robust regulation and commitment to transparency, you can find key milestones and dates on our transparency timeline.