Recently passed: insurance
The Financial Services (Amendment No. 2) (Jersey) Law 2005 came into force on 21 January this year. The amendment brings general insurance broking within the scope of regulation by its inclusion within the definition of ‘financial service business’ for the purposes of the Financial Services (Jersey) Law 1998. The principal reason for this initiative is to ensure that brokers within the island will continue to be able to access UK markets.
The Taxation (Implementation) (Jersey) Law 2004 came into force on 5 November, 2004. The law enables the States of Jersey to make regulations in order to implement agreements with, and obligations owed to, other countries and territories in relation to taxation.
The draft Competition (Jersey) Law has been adopted by the States of Jersey and is awaiting the approval of the Privy Council. The purpose of the draft law is to promote competition in the provision of goods and services in Jersey by prohibiting: arrangements between undertakings that prevent competition; the abuse of market power by undertakings with a dominant market position; and certain mergers and acquisitions without the approval of the Jersey Competition Regulatory Authority.
The draft Data Protection (Jersey) Law has been approved by the Privy Council and is awaiting implementation. It is anticipated that this will happen during 2005. The new law will replace the Data Protection (Jersey) Law 1987 and will contain almost identical provisions to the UK Data Protection Act 1998. Jersey will then be able to demonstrate a sufficient measure of protection for individuals to receive unhindered data transfers from European Economic Area member states.
The Employment (Jersey) Law 2003 was registered in the Royal Court on 5 December 2003 and is expected to be brought into force during 2005. The law sets out minimum standards that must be incorporated into all employment contracts, to include minimum statutory requirements relating to rest periods, annual leave and a minimum wage. The law introduces for the first time the concept of unfair dismissal, which gives every employee a right to be dismissed ‘fairly’. The law further provides for the implementation of an employment tribunal vested with powers to determine employment-related matters.
A consultation paper regarding a possible Foundations Law was issued by the Economic Development Committee of the States of Jersey in November 2004. It sets out proposals for a new law on foundations, permitting the creation of these distinct legal entities as an alternative to trust and company structures. Although traditionally utilised to hold property for charitable purposes, foundations are now being used more generally for wealth management and estate planning and for other more specialised areas, such as long-term charitable aims. There is perceived to be a demand for such entities, in particular among clients from civil law jurisdictions uncomfortable with the concept of trusts.
A consultation paper regarding changes to the Bankruptcy (Désastre) (Jersey) Law 1990 and the Companies (Jersey) Law 1991 is currently under discussion. The proposed changes to the Désastre Law include a recasting of the rules regarding transactions at an undervalue and preferences in a way that will bring them closer to the UK model, and an ability to exclude rights under approved pension arrangements from a debtor’s property for the purposes of a désastre (being the typical Jersey insolvency procedure). It is also proposed that changes be made to the Companies Law to simplify the corporate solvency tests that arise under that law.
A draft bankruptcy – netting, contractual subordination and non-petition provisions – law is currently under discussion. This will simplify and strengthen legal opinion analysis on these issues, which are very important in structured transactions with Jersey counterparties. If approved it will bring Jersey into line with EU recommendations.
Proceeds of crime
It is planned that the anti-money laundering guidance notes and the Money Laundering (Jersey) Order 1999 will be revised to make them consistent with the Financial Action Task Force on Money Laundering’s 40 recommendations.
Protected cell companies (PCCs)
The consultation paper relating to the Désastre Law and the Companies Law also proposes that the Companies Law be amended to allow PCCs to be established in Jersey. An important development will be the ability of the company to elect, at the time a cell is established, whether that cell is to be incorporated with separate legal identity or not.
The final draft of the guidance notes relating to the implementation of the European Savings Tax Directive is out for consultation. Jersey has negotiated the ability to offer withholding tax as an alternative to exchange of information during the transitional period.
A consultation paper relating to the Trusts (Jersey) Law 1984 was issued by the Economic Development Committee of the States of Jersey in November 2004. It seeks comments on proposed amendments to the law, including reforms relating to forced heirship; reserved power clauses; the provision of information to beneficiaries; trustee liability to third parties; and the position of trustees on retirement.
Anthony Dessain is senior partner and Fred Milner a senior legal assistant at Bedell Cristin, Jersey