Source: registry-supervision-inspection-programme-q2-2024.pdf (jerseyfsc.org)
The report is a good basis to provide a framework to undertake beneficial ownership testing with a statistical representation of the most common errors encountered in Jersey, which would probably apply equally to the Guernsey registry.
The most common inaccuracies found are:
1) Difficulties associated with recording joint ownership of shares correctly.
2) Lack of understanding of the three-tier test, leading to errors and omissions of beneficial owners and controllers.
3) Failure to disclose the individuals who control a corporate trustee if not JFSC regulated.
4) Structure charts that do not clearly outline the ownership structure or provide sufficient details about the individuals or entities with significant ownership interests and control.
5) Inadequate records and documentation related to address and identity verification which includes outdated due diligence documentation.
6) Inadequate identification of executors in the situation where a beneficial owner, controller or significant person is deceased.
7) Statutory registers containing inaccurate or outdated information.
In 2021, the Financial Services (Disclosure and Provision of Information) (Jersey) Law 2020 (the DPI Law) came into force, which enhanced and consolidated requirements for all entities to provide and update basic and beneficial ownership information, and to confirm these details annually.
To be effective and to demonstrate compliance with the DPI Law and international standards, Jersey has implemented an additional proactive monitoring mechanism in the form of Registry Supervision. The role of Registry Supervision is to authenticate and verify information on the register, ensuring that the data held is adequate, accurate and up-to-date.
Established at the start of 2022, the Registry Supervision function develops and expands existing Registry oversight activities by undertaking additional risk-based supervisory activities. These new functions accord with existing legislation and the DPI Law.
A core focus for our transparency regime is to ensure that basic, beneficial ownership and controller information is adequate, accurate and up-to-date, and can be made available to competent authorities on a timely basis.
Inspection appointments are a key part of this process, where relevant individuals meet in person with Registry examination officers.
During these meetings, Registry examination officers inspect documentation in relation to the entity and the significant persons recorded with the Registrar of Companies. We use this information to confirm that the data recorded on the Registry database is accurate. The documentation we review includes details of beneficial owners, controllers, directors, and other significant persons. It may also include the rationale for identifying beneficial owners or controllers.
Where we identify breaches of information requirements, we apply penalties when appropriate and proportionate to do so.
This paper provides feedback on the visit programme for 2024. It gives examples of good practice identified during the inspections, and the face-to-face interviews. We encourage boards, senior management, and owner operators to consider the findings and conclusions within this report.
We consider the findings from these reviews during discussions with other competent
authorities in Jersey to allow a multipronged response to any issues. The reviews also support
continuous assessment of our effectiveness in fighting money laundering, terrorist financing
and proliferation financing.
