About sanctions

This Guidance provides general information about sanctions. You should refer to the Financial Sanctions Practical Guidance for particular information regarding financial sanctions.

What are sanctions?

A sanction is a measure adopted against a country, regime, or person believed to be violating international law.

Countries can implement autonomous sanctions, like those specific to the UK only, while also being required to enforce sanctions established by international organizations, such as the United Nations, via the UN Security Council (the UNSC).

The UNSC has the authority to adopt sanctions measures that safeguard or restore international peace and security. Such measures can vary from economic sanctions to international military action. Each UN Member State is then called upon to implement the requirements of a sanctions measure in its territory.

The UK applies sanctions measures: (i) in support of its foreign and national security objectives; (ii) to ensure compliance with UN sanctions requirements, and (iii) to maintain international peace and security and prevent terrorism. UK sanctions regulations apply to conduct by UK persons, which includes anyone in the UK (including its territorial waters), UK nationals outside of the UK, and bodies incorporated or constituted under the law of any part of the UK. It is UK government policy for UK sanctions measures to be given effect in the British Overseas Territories and Crown Dependencies to make sanctions as effective as possible.

With effect from 12 February 2021, Jersey implements the relevant UK sanctions regulations made under the Sanctions and Money Laundering Act 2018 (the SAMLA), which applies to both the UNSC's and the autonomous UK's sanctions regimes.

Why are sanctions used?

Each sanctions measure will have its own objective in respect of the particular country, regime or person. Examples of objectives that sanctions measures may seek to achieve are:

• a change in the conduct of a particular country, regime or person
• to place pressure on a country, regime or person to comply with set objectives
• as a punitive measure when international peace and security are threatened and diplomatic efforts have failed
• to deter, prevent and suppress the financing of terrorism and terrorist acts.

What form do sanctions measures take?

Sanctions tend to take the form of restrictive/coercive measures. Measures may be economic, diplomatic or cultural such as:

• the freezing of funds
• the withdrawal of financial services
• bans or restrictions on trade
• bans or restrictions on travel
• suspension from international organisations
• transportation restrictions

Financial sanctions

Financial sanctions can limit the provision of certain financial services or restrict access to financial markets, funds and economic resources and are generally imposed to:

• coerce a regime, or individuals within a regime, into changing their behaviour (or aspects of it) by increasing the cost on them to such an extent that they decide to cease the offending behaviour
• constrain a target by denying them access to key resources needed to continue their offending behaviour, including the financing of terrorism or nuclear proliferation 
• signal disapproval, stigmatising and potentially isolating a regime or individual, or as a way of sending broader political messages nationally or internationally
• protect the value of assets that have been misappropriated from a country until these assets can be repatriated.

Types of financial sanctions

• Targeted asset freezes apply to named individuals and entities, restricting access to funds and economic resources. Someone subject to an asset freeze in Jersey will be listed on the UK OFSI’s Consolidated List. Targeted financial sanctions imposed by the United Nations Security Counsel must be implemented without delay.
• All UK sanctions designations can be found on the UK Sanctions List.
• Restrictions on a wide variety of financial markets and services can apply to named individuals and entities, specified groups, or entire sectors. It can take the form of  investment bans, restrictions on access to capital markets, directions to cease banking relationships and activities, requirements to notify or seek authorisation prior to certain payments being made or received, restrictions on the provision of financial, insurance, brokering or advisory services or other financial services. For example, the OFSI maintains a separate list of persons named in relation to financial and investment restrictions related to Russia.
• Directions to cease all business specify the type of business and can apply to a specific person, group, sector or country.

How are sanctions measures implemented in Jersey?

Currently, Jersey implements and enforces all relevant UN and UK sanctions regimes through the Sanctions and Asset-Freezing (Jersey) Law 2019 ( the SAFL), and the Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2021 (the Jersey Order).

New designations made under UN and UK sanctions measures have immediate effect in Jersey and any asset-freeze designations made under a new UN sanctions regime that has not yet been implemented will be effective as soon as possible, usually within 24 hours.

 Summary of active sanctions regimes implemented on national and international levels

• Sanctions by country and category — Jersey Financial Services Commission (jerseyfsc.org)
• UK sanctions regimes - GOV.UK (www.gov.uk)

Who is required to comply with sanctions measures implemented in Jersey?

In broad terms, sanctions measures implemented in Jersey apply to all natural and legal persons:

• located in Jersey
• operating in or from within Jersey
• incorporated or constituted under the law of Jersey

Certain sanctions measures may place duties on specific persons or sectors.

As a country’s sanctions measures tend to be applicable to nationals of that country and bodies constituted or incorporated under the law of that country, wherever those persons are situated, it is important to understand any obligations that may follow from having such links to another country.

Why is it important to comply with sanctions legislation?

Sanctions compliance is essential in the fight against financial crime, including money laundering, the financing of terrorism, and proliferation. Supervised persons who understand and follow the sanctions framework play a key role in protecting Jersey’s reputation and supporting global security.

Failure to comply with Jersey sanctions legislation is a criminal offence, and penalties include prison terms and fines.

The SAFL  and the Jersey Order set out penalties for breaching sanctions. A person guilty of an offence is liable on conviction to imprisonment and/or a fine. Prosecutions may take place not only against a business but also against key players within a business if a breach occurs with their connivance or neglect.

Compliance with sanctions legislation is important for a number of reasons. If a person does not comply with sanctions measures, a person may help finance or assist:

• terrorism or terrorist organisations
• the production, development or use of weapons, including chemical, nuclear and biological warfare (weapons of mass destruction)
• political repression or human rights abuses within a state.

Helping to assist or finance any of the above will likely result in reputational damage to a business, the financial industry and the Island.

How long does a sanctions measure last?

Some sanctions measures are for a specific duration, others are unlimited. It is important to check the time frame of a sanctions measure by reference to the relevant legislation.

Who has responsibility for sanctions matters in Jersey?

A range of individuals and departments have responsibilities under sanctions legislation.

Minister for External Relations (the Minister)

The Minister is responsible for the overall sanctions policy in Jersey. This includes: 

• co-ordinating the introduction of sanctions measures, via Jersey legislation
• acting as the reporting depository for sanctions matters
• issuing sanctions licences

Jersey Financial Sanctions Implementation Unit (the FSIU)

The Jersey Financial Sanctions Implementation Unit( FSIU) coordinates the introduction of sanctions measures and assists the Minister in carrying out his duties as Competent Authority: this includes receiving sanctions compliance reports, processing sanctions licence applications, and publishing financial sanctions notices and guidance.

Financial Sanctions Notices

When there is a change to the asset-freeze designations in force in Jersey, a Financial Sanctions Notice ("Notice") is issued by the FSIU and published in the Jersey Gazette. You can register to receive email alerts when a new Notice is published.

The FSIU publishes Notices without delay on the day of designation changes. Notices are published when:

• individuals or entities have been designated for the purpose of an asset-freeze
• individuals or entities are no longer subject to an asset-freeze
• the details of existing identifying information of asset-freeze designations have been changed
• there are other significant changes to Jersey's sanctions regime

For example, the Notices explain the steps to do for asset-freezing measures:  

• check whether you maintain any accounts or hold any funds or economic resources for the persons set out in the Annex to the Notice
• freeze such accounts, and other funds or economic resources without prior notice and without delay
• refrain from dealing with the funds or assets or making them available (directly or indirectly) to such persons unless licensed by the Minister
• report any findings to the Minister, together with any additional information that would facilitate compliance with Jersey’s sanctions framework
• provide any information concerning the frozen assets of designated persons that the Minister may request. The Minister may share the information with other regulatory authorities or law enforcement.

The Notice published in the Jersey Gazette has no legal effect (i.e., the freeze applies regardless of whether a Notice has been published). Supervised persons must immediately freeze the funds and economic resources of UN and UK designations.

The JFSC also publishes the Latest News updates on the sanctions regimes website and sends timely sanctions email alerts to the website's subscribers. The alerts notify about changes in asset freezing targets and ship specifications. To subscribe to the JFSC news and sanctions alerts, please complete the form on the JFSC website Subscribe to our news and updates.

Reporting

As set out under Article 32 of the SAFL, all relevant financial institutions have reporting obligations in respect of attempts to breach or circumvent sanctions, which must be fulfilled as soon as practicable. Reports must be made to the Minister and include the information specified in Sanctions reporting forms.

It is important to be aware that these reporting obligations are in addition to the obligation to file a Suspicious Activity Report (SAR) to the Jersey Financial Intelligence Unit (the FIU).

Article 46A of the SAFL protects persons acting in good faith to comply with sanctions obligations or prohibitions from civil proceedings.

Sanctions licences

A Jersey General Licence, granted by the Minister, allows multiple parties to conduct specified activities that sanctions measures would otherwise restrict. Supervised persons must ensure that their activities are within the scope of the General Licence's terms and that they adhere to all its conditions.

The Minister may also grant a specific licence under the SAFL and/or the Jersey Order.

To apply for a specific sanctions licence, a supervised person must complete the relevant Sanctions form and return it to [email protected].

The FSIU provides guidance on sanctions licences and exceptions on the Government of Jersey website Sanctions.

States of Jersey Customs and Immigration Service (the JCIS)

The States of Jersey Customs and Immigration Services (the JCIS) are responsible for the enforcement of any sanctions targeting the movement of goods and individuals.

In Jersey controls over the export and import of goods are governed by the Customs and Excise (Import and Export Control) (Jersey) Order 2006 and the Open General Export Licence.

Jersey Financial Services Commission (the JFSC)

Under Article 2 of the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008, the JFSC has the power to monitor compliance by a supervised person with the requirements of the Money Laundering (Jersey) Order 2008 (the MLO). Article 11 of the MLO requires that relevant persons maintain appropriate policies and procedures concerning that person’s financial services business to prevent and detect money laundering. Under Article 11(3)(e) of the MLO, this includes policies and procedures to determine whether a business relationship or transaction, or proposed business relationship or transaction, is with a person connected with a country or territory that is subject to measures for purposes connected with the prevention and detection of money laundering. This includes sanctions measures. As a result, the JFSC supervises financial services businesses to ensure that they comply with Article 11(3)(e) of the MLO. The JFSC supervises regulated persons to ensure that they maintain adequate systems and controls to mitigate the risk of breaching sanctions and facilitating evasion.

The JFSC also conducts outreach to raise industry awareness of sanctions vulnerabilities, to secure the efficient and effective provision of financial services in or from Jersey.

Economic Crime and Confiscation Unit (the ECCU)

The Economic Crime and Confiscation Unit leads criminal investigations into potential breaches of sanctions legislation.

Private sector

The private sector is responsible for its sanctions compliance.

Common misconceptions about financial sanctions

The following are commonly held misconceptions regarding financial sanctions:

• Individuals and entities who are the subject of sanctions are all based overseas
  
  • This is incorrect as sanctioned individuals and entities can be based anywhere.
•  Financial sanctions are a form of regulatory enforcement action.
  • Financial sanctions are measures adopted by the international community and are not a form of regulatory enforcement action.
    
• Customer due diligence checks for anti-money laundering purposes are the same as screening sanctions lists.
  • Checking a client’s identity alone will not confirm whether the individual is the subject of sanctions measures.
• Sanctions targets are the same as Politically Exposed Persons (PEPs).
  • Most PEPS are not in fact subject to sanctions. Some, however, will be.
• Funds of those sanctioned cannot be frozen because it may constitute ‘tipping-off’
  • Lists detailing sanctions targets are publicly available and most individuals or entities will be aware they are on such lists. This means that freezing the assets of a sanctioned person and informing them of that fact alone will not constitute tipping-off. If, however, it is necessary in the circumstances to file a suspicious activity report (see section 7 of the Financial Sanctions Practical Guidance) then disclosure of that fact would in the majority of cases constitute tipping-off under Article 35 of the Proceeds of Crime (Jersey) Law 1999, Article 35 Terrorism (Jersey) Law 2002.
    
    
• A firm is exempt from the sanctions regime because they only process low value transactions.
  • There are no exemptions for low value transactions.
    
    
• Sanctions screening is unnecessary where a firm does not hold client money or deal with payments.
  • Sanctions screening is necessary even if a firm does not handle money or payments because some sanctions extend to the simple provision of financial services.
• Sanctions do not apply to insurance business, or are a no or low risk area in insurance business.
  • Financial sanctions can apply to the provision of all financial services, including insurance.

Challenging sanctions designations

Persons and entities who are subject to sanctions because they are listed by a Sanctions Committee of the United Nations may petition that committee for de-listing by contacting the Office of the Ombudsman at the United Nations Headquarters in New York, at the address below:

Office of the Ombudsman
Room DC2-2286
United Nations
New York, NY 10017
USA

Section 23 of the Sanctions and Anti-Money Laundering Act 2018 enables a person who has been designated under a designation power contained in Sanctions Act regulations (a “designated person”) to request variation or revocation of the designation. For further details, please see the Guidance: How to request variation or revocation of a sanctions designation or review of a UN listing available from gov.uk.

Further information on challenging sanctions designations is provided on GOV. JE website