Jersey’s Travel Rule is live.
In September 2023, the EU Legislation (Information Accompanying Transfers of Funds) (Jersey) Regulations 2017 (also referred to as Wire Transfer Regulations) was amended to include virtual asset service providers.
This regulation applies EU Regulation 2015/847 in Jersey. It is this regulation that sets forth the rules for including originator and beneficiary information when transferring assets.
What is the scope of the Travel Rule in Jersey?
The Travel Rule applies to transfers of virtual assets between Virtual Asset Service Providers (VASPs).
This includes intra-group transfers, that is, transfers between different legal entities within the same group, and transfers between VASPs where the originator and beneficiary are the same person.
The Jersey Financial Services Commission expects VASPs to:
- demonstrate full compliance with the Travel Rule;
- have a functioning Travel Rule solution where applicable;
- maintain documented procedures demonstrating compliance;
- ensure accurate transmission and retention of the required originator and beneficiary information for all in-scope transfers.
The following transactions do not fall within Jersey’s Travel Rule:
- Transfers where both the originator and beneficiary hold accounts with the same VASP.
- Transfers between two VASPs acting on their own behalf.
- Transfers between the same legal entity within the same VASP.
- Transfers of funds not exceeding EUR 1000 unless there are reasonable grounds for suspecting that the funds to be transferred are connected to money laundering or the financing of terrorism.
Who is the supervisory body for VASPs in Jersey?
The Jersey Financial Services Commission (JFSC) is responsible for issuing guidance and supervising compliance with Jersey's AML/CFT/CPF framework, including the Travel Rule.
What is the Travel Rule threshold in Jersey?
EUR 1000.
For transfers exceeding EUR 1000, the required originator information must be verified.
For transfers of EUR 1000 or less, verification is not required unless there are reasonable grounds to suspect that the funds are connected to money laundering or terrorist financing.
VASPs are also expected to identify linked transactions that collectively exceed the threshold using appropriate controls and risk-based procedures.
Obligations of originator virtual asset service providers
Originator VASPs are expected to ensure the following information accompanies every in-scope transfer:
- originator’s full name (if a legal entity, its registered or trading names);
- originator’s account number, or any unique transaction reference associated with them;
- and either the originator’s postal address, national identity number, customer identification number or place and date of birth;
- beneficiary’s full name (if a legal entity, its registered or trading names);
- beneficiary’s account number, or any unique transaction reference associated with them;
- the transaction hash.
Where the originator is a legal entity, one of the following must also accompany the transfer:
- customer identification number;
- registered office address or principal place of business.
The required information must be provided before, or at the time, the transfer is completed. Originator VASPs are also responsible for maintaining effective procedures to detect missing or inaccurate information and respond appropriately.
Obligations of beneficiary virtual asset service providers
Beneficiary VASPs are expected to receive the required Travel Rule information before making virtual assets available to the beneficiary.
When receiving transfers from jurisdictions where the Travel Rule has not yet been implemented, beneficiary VASPs should:
- assess whether information is missing or incomplete;
- consider the regulatory status of the originating jurisdiction;
- apply a risk-based assessment before making funds available;
- use blockchain analytics where appropriate to support the assessment;
- continue to meet all AML/CFT/CPF obligations, including submitting Suspicious Activity Reports where necessary.
Obligations of intermediary virtual asset service providers
An intermediary VASP facilitates or participates in the processing of a virtual asset transfer without being either the originator or beneficiary institution.
Intermediary VASPs are expected to:
- ensure all required Travel Rule information has been received before completing the transfer;
- pass all required information to the next institution in the transfer chain;
- apply a documented risk-based approach when deciding whether to delay or reject transfers with missing or incomplete information;
- transmit any requested information received after the transfer as soon as practicable;
- determine whether they are acting as an intermediary for each transaction.
Does the Jersey Travel Rule apply to self-hosted wallets?
VASPs are expected to adopt a risk-based approach when dealing with self-hosted wallets. When determining the risk rating for a self-hosted virtual asset transfer, VASPs may take into account:
- the purpose and nature of the customer relationship;
- the jurisdiction of the self-hosted wallet, when know;
- the value and frequency of transfers linked to the wallet;
- blockchain analytics indicating links to illicit activity.
For higher-risk transfers, VASPs should consider additional measures to verify ownership and control of the self-hosted wallet.
Where sufficient information cannot be obtained, the virtual assets should not be made available to the intended beneficiary.
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When do you need to comply with the Travel Rule in Jersey?
Now. The amended Wire Transfer Regulations came into effect on 1 September 2023.
Which regulations are applicable to the Travel Rule in Jersey?
EU Legislation (Information Accompanying Transfers of Funds) (Jersey) Regulations 2017
The Proceeds of Crime (Jersey) Law 1999
The Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008
The Money Laundering (Jersey) Order 2008
Jersey Handbook for Preventing Money Laundering, Terrorist Financing, and Proliferation Financing
