Rich Immigrants: Better Vetting Needed?

I came across a recent of information request from April 2018 which highlights the vagueness of the tests relating to of foreign nationals coming to Jersey as high worth value residents. The reply gave the current policy as follows, and I give the reply before the question so it can be seen how lacking it is in specifics compared to the much more stringent approach taken by Philip Ozouf when he was tasked with looking at some potential applicants. 

Current Position (as per FOE request 28 November 2017):

The States of Jersey (Economic Development, Tourism Sport and Culture - Locate Jersey) carry out background checks on all individuals who apply for High Value Residency. This includes Thomson Reuters World Check, Jersey Financial Services Commission, States of Jersey Police and open-source checks. As part of their application ‘pack’, applicants are required to provide a clean police (DBS) check from their country of residence plus two business and two personal references. Applicants must also provide a financial statement showing their wealth as well as tax returns for preceding years. Full transparency is expected.

In addition to checks carried out by the States of Jersey as part of the application process, ordinarily, applications are prepared on behalf of applicants, by legal or accountancy firm who also carry out due-diligence as part of their 'take-on' of the client.

Any existing wealth that a High Value Resident transfers to Jersey would be scrutinised by their acting intermediary firm as part of their AML/CFT 'Know Your Client' procedures and would also be subject to any controls imposed by the Jersey Financial Services Commission.

FOE Question 

Given the recent issue of foreign nationals coming to Jersey as high worth value residents formerly 1.1K, are Senator Philip Ozouf's tests (which he applied when he was vetting applicants) still in use?

These were:

1. What passport does holder have. If one of their passports is from a country on the UK Foreign Office ‘High Risk’ list, and the holder of the passport has been resident in the UK for more than 5 years but only holds a passport from the high risk country - major concerns and questions should be asked (presumption of non-approval being more than 50%). In demonstrating a continuing allegiance to a high risk country, serious questions arise as dua l nationality would be a demonstration of a staged or planned exit from the high risk country.

2.Of the net assets that the applicant can evidence, what percentage of those assets remain based or derive from business activities in the high risk country referred to in 1. If more than 50%, even greater presumption for refusal or in potentially high profile or even serious diplomatic outcomes best option may be a ‘non-decision’.

3. Of the percentage of assets domiciled or originating from the high risk country, what percentage of the assets are derived from extractive sectors, eg mining, oil etc or activities which require specific Government high level sanction. If the percentage is within a range of 30-60%, then the presumption is that the application should, for reputational safeguarding, almost certainly result in rejection or a non-decision because of the risks associated in the individual’s past, present and ongoing links with what is inevitable a political regime that has serious corruption, security and other financial crime concerns which would blemish Jerseys gold standard reputation.

If these tests are not applied, what other tests are applied? Can these be detailed?
Who is the Minister responsible for checking applicants?

Response

The policy for 2(1) (e) applications is outlined at:
https://www.gov.je/home/rentingbuying/housinglaws/pages/highvalueresidency.aspx

The Chief Minister is responsible for the Control of Housing and Work (Jersey) Law 2012, and delegates these powers to the Assistant Chief Minister.

Further information on the relevant checks is also included in:
https://www.gov.je/government/pages/statesreports.aspx?reportid=3381

Those are the checks outlined at the start of this blog.

In the States sitting of 21st March 2018, Senator Bailhache (as Minister for External Relations) did say that:

‘As far as the admission of Russian nationals to the Island is concerned under 21E of the relevant law, one must bear in mind that all such applicants are subject to very stringent inquiries by a number of relevant authorities in the Island before a decision is taken by the relevant minister to admit that person to the Island as a so-called wealthy immigrant."

"I think it is fair to say that the recent developments involving certain very rich individuals resident in the United Kingdom will lead to even more stringent approaches by the relevant authorities in Jersey, when such applications are made under article 21E.’

And when Deputy Mézec asked whether having close links to the Russian government should become ‘grounds for refusal’ to be accepted as a 21E, the Senator replied:"I think that all relevant considerations, and the Deputy has mentioned one of them, would be taken into account in making such a decision."

However, that was on 21 March 2018, the Freedom of Information request was made around the 20th April 2018, and there is no sign at all of any "more stringent approaches" of the kind which were in place when Senator Ozouf was an Assistant Minister. I think this shows a lax approach, either to informing the public of any changes (in the FOE request) or of actually doing anything to improve matters.

It is likely that not much will be done until after the elections in May, but it is to be hoped that the new house will ensure that any External Relations Minister follows through on the unrealised promise of Sir Philip Baihache and bring in more stringent vetting, perhaps using Philip Ozouf's questions as guidance.

It would be also be interesting to know where those trying for Senator in those elections stand on that matter.