Financial crime in Jersey

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Some questions have been raised about why I reported on the States of Jersey police report for 2006 with regard to money laundering in the way I did. To be honest, I hoped that irony was not a lost art, and that explains my approach in one word, but a more serious issue can, perhaps be raised as well.

It's true that the report might have noted that no criminal money laundering was recorded in Jersey in 2006, but suspicious activitiy reports were filed. A suspicious activity report has to be issued by any person in the financial services industry whenever they consider any form of money laundering takes place. Money laundering includes tax evasion.

Now it so happens that Jersey is riddled with tax evasion. I know that is true. As a result of the UK Revenue & Customs cracking open the banking operations of the major UK high street banks who operate in the Island they expect to collect hundreds of billions of additional UK tax that has been evaded by UK resident people. The fact that the tax in question was not evaded in Jersey but was instead evaded in the UK does not change the obligation to report the suspicion that a potentially criminal activity was going on in Jersey by the Jersey banks involved. And let's also be clear. Suspicion is enough: the crime does not have to be proved.

So how could the banks in question have suspected this evasion? Well, maybe they could have looked at the returns of all those whom they asked to make declaration under the EU Savings Tax Directive because they knew that the account holder was resident in the UK, or elsewhere in Europe. And when they were denied the right to disclose data to the account holder's tax authority don't you think the banks in question might just at least have suspected the possibility that the account holder was evading tax on the interest earned? To any reasonable person that possibility had to exist. In that case a suspicious activity report should have been submitted.

But as is obvious from the tiny number (just over 1000) of reports of suspicious activity reports made this cannot have happened. Why not? It's a criminal offence not to report such suspicions in Jersey but it's just being overlooked. That IS a financial crime.


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