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ABSTRACT
Jersey is recognised as being an independent and well-regulated finance centre providing tax benefits and investment opportunities. In order to protect its reputation, laws and procedures are constantly being developed. The liabilities of financial institutions for the fraud of third parties is one such development.
The most common criminal law offences include fraud, false accounting and statutory crimes (such as money laundering (relating to banking, insurance, investments and trusts)), insider dealing and drug trafficking. Civil actions are also used in the fight against abuse and wrongdoings of third parties. Jersey courts will readily impose an injunction to aid proceedings in a foreign court. The courts' power to impose or create constructive trusts and thus prevent unjust enrichment is constantly evolving - for example, `remedial constructive trusts' may apply in Jersey. Such laws also affect banks, which have duties both in their own
capacity (to make certain disclosures to prevent an injustice) and as trustees to exercise their discretion properly. Banks may also be third parties and subject to injunctive relief.
The regulatory requirements apply to banking, insurance and investment business and most recently to trust and company administration. It is imperative that these measures be implemented to ensure that fraudulent third parties do not go unpunished and Jersey continues to flourish as a safe financial centre.
BACKGROUND
Jersey, the largest of the Channel Islands, lies 16 miles to the west of Normandy and the Cherbourg peninsula of France. It originally formed part of the Duchy of Normandy (from 933) and later part of the united crowns of Normandy and England (from 1066). When King John lost continental Normandy in 1204, the Channel Islands remained loyal to the English crown as they do today. The English crown by successive charters gave Jersey rights to govern itself through its Parliament on all domestic matters, including taxation, but not matters relating to foreign policy or foreign affairs. The islanders have no representation in Parliament at Westminster. It is not and never has been a colony.
Jersey is a part of the European Community by virtue of the membership of the UK. By the Treaty of Accession of the United Kingdom to the European Economic Community 1972, paragraph 257(5) was added to the Treaty...