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The British Crown dependency of Jersey has sailed through its latest anti-money laundering and counter-terrorism financing (AML/CTF) evaluation by European monitoring body MONEYVAL, with online gambling protections found to be “commensurate” to industry risk.
The watchdog’s report, published on July 24, “commends … Jersey for taking steps to strengthen its legal and regulatory framework to combat money laundering, financing of terrorism and financing of proliferation”, the Council of Europe said in a statement.
“MONEYVAL concludes that, having significantly strengthened its legal framework since the last mutual evaluation [in 2015], Jersey has most elements of an effective AML/CFT, but still needs to improve the implementation of measures in certain areas.”
The Jersey government responded to the MONEYVAL report with delight, noting its conclusion that Jersey “reaches a level of effectiveness” shared by only three other jurisdictions worldwide, and that no “fundamental improvements” are required.
Financial services minister Ian Gorst said: “The report endorses our current national strategy and much of the work we are already doing, but we will also address the recommendations made for improving our system.
“We will do so in a proportionate and reasonable manner, and through proper consultation with industry.”
Still, the MONEYVAL report said online gambling regulation can be improved, noting that licensing and compliance monitoring for online gambling operators contains inconsistencies.
“From a technical compliance market entry perspective, Jersey’s legislation does not follow [an] all-crimes approach when considering criminality,” it said, referring to the classification of any core or peripheral criminal activity as a predicate offence in the context of money laundering.
The report noted that Jersey Gambling Commission licence revocation criteria in Jersey’s Gambling Law 2012 do not “allow for the all-crimes approach, and the scope of criminality [in the law] seems to be narrower than the scope of criminality”, applied by the Jersey Financial Services Commission, which also vets online gambling applicants.
However, MONEYVAL found that “in general” Jersey’s AML/CTF measures are “commensurate to the risks in the gambling industry”.
It noted that Jersey bans person-to-person gambling, cryptocurrency payments, payouts to sources other than the original depositor, and multiple payment cards, while requiring two-step authentication and due diligence for retail customers.
Jersey also utilises detection algorithms for customer non-compliance, subjects winnings of more than £5,000 ($6,370) to additional checks, imposes weekly payment thresholds and universal fund source verification, and subjects “higher risk customers” to lower scrutiny thresholds and more frequent reviews, the report said.
The bulk of Jersey’s gambling regulation involves non-casino land-based operations, and the regulator’s website only lists four online gambling licensees and four affiliated platform providers, making it one of the smallest regulators of the online space.
The MONEYVAL report only recognises two of the operators: Canada-facing Mohawk Online Limited; and an online operation targeting Jersey and Ireland.
However, the MONEYVAL assessment of Jersey serves as an up-to-date index of the monitoring body’s approach to gambling regulation, potentially affecting those gambling jurisdictions awaiting a mutual evaluation.
Fellow British crown dependency Isle of Man is one of those jurisdictions. That government’s preparations for a mutual evaluation in late 2015 or early 2016 include an updated national risk assessment and a significantly enhanced gambling enforcement regime.
The British crown dependency of Guernsey, which includes the Alderney Gambling Control Commission, underwent an on-site evaluation in April. The Guernsey report has yet to be released.
