MEMORANDUMm

UNDERSTANDING

States of Jersey Police Jersey Financial ServicesCommission

ContentsContents ................................................................................................................................... 1

RECITALS.................................................................................................................3

OPERATIVEPART ...................................................................................................4

InterpretationPurpose and PrinciplesExchange of informationStaff deploymentCase conferencesExecution of search warrantsContact PointsConfidentialityConsultationCommencement and TerminationPublication

455789910101010

Memorandum of Understanding ("MoU")

between the

States of Jersey Police ("SoJP") and the Jersey Financial Services

Commission

(~~JFsc~~)

Recitals

A. The SoJP is the professional police force in Jersey and was established under

the Police Force (Jersey) Law 1974. It has responsibility for the prevention. and

detection of crime including the investigation of financial crime, ~~r~IC~l ;"

carries out through the Joint Financial Crimes Unit (the °'JFCU"). Fuzas.~ial

crime investigation is regarded as a strategic priority for the SoJP arid is

cansidered to play a significant role in protecting the reputation of t'ne

~sland's finance industry. Amongst other things, "the JFCU is responsible for

t~tie receipt, collation, analysis and aissemination of information can~:~itY~d

~vit~lin suspicious activity reports ("SAI~s') that are submitted to it.

i3. The JFSC is a statutory body established under the Financial ~er~ices

commission (Jersey) Law 1998. The JFSC's main function is to su~~"'`%1~P

financial services providers for compliance with prudential and co~z~'uct ~£

?~usiness requirements. The JFSC's functions also include "policing the

perimeter" in order to detect and deter unauthorised financial ser~.~i, es

~usi~ness. The JFSC also has powers under regulatory legislation) to

investigate suspected cases of insider dealing and market manipulation. Lit

addition, the JFSC has responsibility for supervising financial services

providers and designated non-financial businesses and professions

("DNFBPs")2 for their compliance with measures in place in Jersey to prevent

and detect money laundering and the financing of terrorism.

1 See Article 32(2) of the Financial Services (Jersey) Law 1998.

'-Estate agents, lawyers, accountants and high value goods dealers.

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Operative Part

Interpretation

1. In this MoU, unless the context requires otherwise:

"Applicable Laws, Regulations and Requirements" means any law,

regulation or requirement applicable in Jersey, and where the context permits

includes:

(a) any law (statutory, common or customary), regulation or requirement

applicable in Jersey; and

(b) any rule, direction, requirement, guidance or policy made or given by

or to be taken into account by either of the Parties;

"DNFSPs" means designated non-financial businesses and professions;

"information requirement" has the meaning attributed to it in paragraph 27;

"JFCU" means the Joint Financial Crimes Unit;

"JFSC" means the Jersey Financial Services Commission;

"MoU" means this Memorandum of Understanding;

"SAR" means a suspicious activity report;

"SoJP" means the States of Jersey Police;

"the Parties" means the SoJP and the JFSC;

"the Sending Party" means the JFCU or the jFSC, as relevant, when sending

information to each other under the provisions of this MoU.

D

Purpose and Principles

2. The purpose of this MoU is to establish a formal basis for co-operation

between the Parties, particularly in respect of the exchange of information to

assist the JFCU and the JFSC in carrying out their respective functions.

3. This MoU does not modify or supersede any laws or regulatory requirements

in force in, or applying to, Jersey. This MoU does not create any enforceable

rights. This MoU does not affect any arrangements under other Molls that

the Parties may have entered into.

4. T'he Parties acknowledge that they may only provide information under the

provisions of this MoU if permitted or not prevented under Applicable Laws,

Regulations and Requirements.

Exchange of information

5. It is recognised that the exchange of relevant information between the JFCU

and the JFSC is of benefit to each in the carrying out of their respective

functions and assists the Island in its fight against financial crime, money

laundering and the financing of terrorism.

6. The JFCU shall pass to the JFSC information that comes into its possession

(whether through receipt of a SAR or otherwise) which, in the opinion of the

JFCU:

(a) indicates that a significant breach of regulatory legislation3 may have

taken place (for example, unauthorised financial services business or a

contravention of Jersey's provisions on insider dealing and market

manipulation);

(b) indicates that a significant breach of a binding regulatory requirement

may have taken place (for example, a contravention of a requirement

3 For the purposes of this MoU, the: Banking Business (Jersey) Law 1991; Collective

Investment Funds (Jersey) Law 1998; Financial Services (Jersey) Law 1998; Insurance Business

(Jersey) Law 1996; Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008.

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set by the JFSC's "Handbook for the Prevention and Detection of

Money Laundering and the Financing of Terrorism');

(c) indicates that an entity that is subject to the supervision of the JFSC

may have significant weaknesses in its corporate governance or

compliance function that the JFSC is not aware of and which may

result in clients/customers of the entity, or the reputation of the

Island, being exposed to an unacceptable level of risk.

7. Paragraph 6 shall not restrict the discretion of the JFCU to pass to the JFSC

information on other matters that it considers relevant to the functions of the

JFSC.

8. The JFSC shall pass to the JFCU information that comes into its possession

which, in the opinion of the JFSC:

(a) indicates that a significant financial crime may have been committed

or is about to be committed (for example, a fraud in, or by, a financial

services business);

(b) indicates that a significant breach of anti-money laundering/financing

of terrorism legislation may have taken place or is about to take place;

(c) indicates that a significant breach of sanctions legislation may have

taken place or is about to take place;

(d) indicates that a financial services business or DNFBP is submitting an

abnormally low level of SARs to the JFCU.

9. Paragraph 8 shall not restrict the discretion of the JFSC to pass to the JFCU

information on other matters that it considers relevant to the functions of the

JFCU.

10. Unless otherwise stated, information exchanged between the JFCU and the

JFSC under the provisions of this MoU is for intelligence purposes only and

should it be required formally as evidence or for use in an investigation then

the appropriate formal application must be made.

G

11. The JFCU and the JFSC will agree mutually acceptable protocols to ensure the

secure communication of information exchanged under the provisions of this

MoU.

12. T'he Parties recognise that the commitment of the JFSC to provide information

to the JFCU under the provisions of this MoU does not affect the JFSC's

statutory obligation to submit a SAR to the JFCU in appropriate cases.

Staff deployment

13. To support the identification of information relevant for exchange between

the parties as outlined in Sections 5-12 of this MoU, a member of the JFSC

staff may be deployed within JFCU.

1~~. The JFSC member will be subject to security screening and approval of the

soJP.

15. The deployment, on a part-time basis agreed between the Director

Enforcement, JFSC and Detective Inspector, JFCU will also assist the sharing

of expertise, fostering of dialogue, and further enhance cooperation between

the parties.

16. 'The contractual status of the JFSC member is unaffected, and they remain

employed, supervised and remunerated by the JFSC.

17. The JFSC member will have access solely to SARS submitted to the JFCU by

entities regulated by the JFSC, electronic and paper based, with

corresponding access limited to such records on the `IFIS' computer SAR

database.

18. The JFSC member will not have access to SARs submitted by non-regulated

businesses, Requests for Assistance, Miscellaneous Intelligence Reports or

any other intelligence or operational material in the JFCU, be it in electronic

or paper form.

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19. Where information not previously disclosed to the JFSC is identified by the

JFSC member as falling relevant for disclosure, a template setting out the

grounds will be completed for JFCU supervisor consideration.

20. The template, complete with JFCU supervisor endorsement, and disclosure

decision will be scanned onto the IFIS database as an auditable record.

21. Deployment of the JFSC member in JFCU is not to be interpreted as formal

disclosure to the Financial Services Commission under the provisions of

Article 30 of the Proceeds of Crime (Jersey) Law 1999.

22. The JFSC member is not permitted to retain, copy, forward or otherwise

disclose SAR based material coming into their possession by virtue of their

assessment role in JFCU by any means. SAR based material remaix•~s the

property of the JFCU.

23. Information may only be disseminated to the JFSC by JFCU staff using the

established secure formal gateway in accordance with standard operating

procedures, following written JFCU supervisor approval.

24. It is the JFSC member's responsibility to notify any conflict of interest arising

from the receipt of information obtained as a result of deployment in JFCU by

way of SAR or any other means. Such notification is to be made to the Head

of JFCU with immediate effect.

25. The JFSC member is prohibited from the unauthorised disclosure of

information obtained during the course of the deployment in the JFCU.

Case conferences

26. Where information exchanged between the JFCU and the JFSC indicates that

the subject of the information is of interest to both parties (for example, where

both criminal activity and regulatory breaches are suspected) a case

conference may be called to ensure that the maximum, and appropriate, use

of the information is made. In relevant cases, the JFCU and the JFSC will

request the involvement of a representative of Jersey's prosecuting authority

- Her Majesty's Attorney General - in the case conference.

Execution of search warrants

27. Ordinarily, where the JFSC is investigating a matter within its area of

competence (for example, a suspected breach of regulatory legislation or a

binding regulatory requirement), it would expect to rely upon the general

power it has under regulatory legislation (for example, Article 32 of the

Financial Services (Jersey) Law 1998) to require a person to provide it with

such information and documents as it may require to undertake the

investigation. This MoU shall refer to this as the imposition by the JFSC of an

"information requirement".

28. However, there will be circumstances where it may not be possible, or

appropriate, for the JFSC to impose an information requirement. For example,

where the JFSC has reasonable grounds for suspecting that if it were to

impose an information requirement on a person, the person would not

comply with the information requirement or the person would remove,

tamper with, or destroy the information or documents sought.

29. In such circumstances, the JFSC may apply to the Bailiff pursuant to a

provision in regulatory legislation (for example, under Article 34 of the

Financial Services (Jersey) Law 1998) for a warrant to be issued that will

authorize a police officer, together with any other person named in the

warrant, to enter and search premises to obtain the relevant information or

documents.

30. Where the JFSC considers that it is appropriate for an application to be made

to the Bailiff for a search warrant, it will consult with the SoJP in advance

with a view to agreeing a strategy for the joint execution of the warrant

(should the Bailiff see fit to issue one).

Contact Points

31. The JFCU and the JFSC will provide each other with a list of contacts to

whom information to be passed under the provisions of this MoU should be

directed.

G~

Confidentiality

32. The JFCU and the JFSC recognise that information exchanged under the

provisions of this MoU is likely to be of a highly sensitive and confidential

nature.

33. No confidential information exchanged by the JFCU and the JFSC under the

provisions of this MoU will be voluntarily passed on to any third party

without the express consent of the Sending Party.

Consultation

34. The Parties will -keep the operation of this MoU under review and will

consult when necessary with a view to improving its operation and resolving

any matters that arise.

Commencement and Termination

35. This MoU supersedes the version previously signed on 4~ October 2011.

36. This MoU will take effect when the Parties have signed it and will continue to

have effect until terminated by either party giving 30 days' advance written

notice to the other Authority. It may be amended by agreement in writing.

37. In the event of the termination of this MoU, information obtained under this

MoU will continue to be treated confidentially in the manner prescribed in

paragraph 33.

Publication

38. Either, or both, of the Parties may make a copy of this MoU, or the text of it,

publicly available.

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Executed by the Parties:

For the SoJP

Mike Bowron QPM

Chief Officer c`,2`~~~ ~FF~cF.~

Date: '~y Z 3 1 U N 2014

For the JFSC

john Harris

Director General

Date: ~. 4 1 ~ t~ ~ r ,4

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