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International bank's fine highlights importance of following procedures, warns Ogier partner

16/10/2018 News Team

International bank Abu Dhabi Commercial Bank was fined £25,000 for transferring the Jersey assets of a deceased client to a foreign court without first requesting a Jersey Probate Grant; a case which underlines the importance of following the correct procedures, Ogier partner Julie Melia has warned.

The bank was fined £25,000, plus £2,085 that should have been paid in stamp duty after admitting one count of "intermeddling", an offence under Article 23 of the Probate (Jersey) Law 1998, which relates to the transfer of a deceased person's assets or estate without first having the lawful authority to do so.

As the deceased client had his accounts in Jersey, and the value of these accounts was over £10,000, a Jersey Grant should have been applied for in the Royal Court of Jersey and then presented to the bank, with instructions detailing where the funds should be transferred before the money was paid out.

However on this occasion, a bank employee paid the money to a United Arab Emirate (UAE) account following a request from a UAE court without first insisting that the Jersey Grant be obtained.

Ms Melia commented: "This is a case where a major bank has had to pay a fine, and suffer the disruption of a criminal prosecution and sustain the associated reputational damage for not following the Jersey probate rules.

Although the Royal Court accepted that there had been no intention by the bank to deprive the heirs of the assets in this case, nor to evade Jersey stamp duty, an administrative error still resulted in a criminal offence being committed.

"These cases are rare, but they do underline the importance of obtaining the necessary legal authorisation before dealing with the assets of a deceased person," Ms Melia added.

"Jersey banks and other financial institutions holding assets on behalf of international clients should take this opportunity to refresh themselves on the requirements of Jersey law on this point.  It is important that assets are only released upon the instructions of the person/s named on the Jersey Grant, and not from any other person.  

“The Jersey Grant offers a form of protection to asset holders as it confirms who is legally entitled to administer the Jersey assets, which person has been formally appointed by the Royal Court of Jersey, and indemnifies the asset holder when acting upon that person's instructions".

Ms Melia specialises in property and probate matters and has more than 25 years' experience as a Jersey advocate.

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