Financial Intelligence Unit Jersey Director, Jonathan Groom was recently interviewed in by Connect magazine for their Unplugged section. Below is a transcript of the published interview called:
Suspicious minds
In the intricate and sometimes murky landscape of global finance, where small-time fraudsters, organised crime gangs and high-profile oligarchs weave their webs through international finance centres like Jersey, a new light has been switched on.
Jersey's Financial Intelligence Unit (FIU) is a 'new' entity tasked with gathering data and connecting the dots that will help combat financial crime both locally and globally.
Leading the unit is seasoned veteran in the world of banking and intelligence, Jonathan Groom, whose career highlights include leading Operations and Intelligence at the London 2012 Olympic games, working as HSBC's Director of Global Anti-Money Laundering Operations, and helping worldwide networks like Meta navigate the complex terrain of human exploitation risk.
One of the UK's foremost experts in the critical field of combating trafficking and ever "purpose-driven", he played a pivotal role in shaping HSBC's Modern Slavery Act statement and has helped numerous banks develop their own tools, and initiated the Survivor Bank programme, which has impacted the lives of more than 3,000 survivors of modern slavery and homelessness.
As Jersey's next Moneyval assessment looms, Christie Bailey found out about how Mr Groom will be applying that expertise in his new role, the new threats on the horizon, oligarchs' efforts to trip up agencies, and the importance of keeping a suspicious mind...
Paint us a picture of the FIU's operations...
We have about 30 people in total at the moment, but that will expand a degree more.
Intelligence, by its very nature is about drawing together information, processing, adding value, and then determining how that is distributed and disseminated.
..We definitively do not do investigations. And we do not collect evidence, per se. Intelligence is about looking at what is in front of you, using different sources to enrich that picture, then coming up with a hypothesis as to what you think is happening. We can then pass it onto one of the other authorities, and they can determine if there is enough to pursue an investigation.
..The 'threat actors'] we look at might be low-level criminals, they might be part of an organised crime gang, it might be an oligarch, somebody who's sanctioned, a terrorist - threats come from all over. They can be significant global players, or they can be local, small-time actors. We need to focus on all of them.
Once they cross international boundaries, they can start to obscure activity by utilising different products and services.
Our role is to unpick them and to identify them, and then to produce enough intelligence to help either people here or elsewhere to follow prosecutions to get the money back to the right people, whether it's in this island or another country.
..We also have to have and think about our outreach, collaboration and international engagement. We are one part of a jigsaw, and we need to understand what is happening in other countries, and how criminals are abusing them, or how money might flow into ours, to be able to understand it or defeat it. So international relationships and cooperation become incredibly important.
The unit has now become operationally independent from the Police - in line with a recommendation following the island's previous Moneyval assessment - how will its operations change?
By being part of a domestic police force, it has had a more domestic focus, and been a supporter of law enforcement investigations. As an intelligence agency, it's more than just being the start point for an investigation.
We look much more strategically, and deliver insight around what threats we currently face, what threats are coming over the hill, and how they might be evolving. But, whilst sat under the police, we were dictated and determined by other police priorities.
Jersey as an international finance centre (IFC) faces potential significant economic crime waves within the international space, and particularly how non-residents might abuse the products and services we offer. Giving us autonomy, and allowing us to make our own decisions - even though I report to a board and then directly to Ministers - means I can focus on the international context.
How have threats evolved over time?
The threats are always changing. There's the growth of cryptocurrency and how criminals are using that reasonably unregulated space. There's a disparity across the globe in how it's used, and criminals take that as an opportunity.
With terrorist financing, there is not just a focus on individual lone actors and how they might pay for and facilitate an individual attack - but, actually, somewhere like Jersey as an IFC is exposed because bigger terrorist organisations might be abusing our products and services to store or move their finances. The Ukraine war and the Wagner Group shows that state threats in particular are evolving. That convergence of state threats, how they use proxies to do criminality for them, how that's linked into sanctions, how that's linked into terrorism, how that's linked into crypto-criminality, demonstrate the growing complexity.
It also demonstrates that simple crime still pays. Criminals won't change their ways until we do more around money laundering, and there are more investigations and/or prosecutions around it, not just here, but around the globe.
..One of my first pieces of the FlU is to demonstrate that, with this extra resource and with this extra influence, that we are effective, that we're making change - although it is difficult as an intelligence agency, because there's many things that you can't share.
Are there any areas we're not focusing on closely enough?
It's sometimes difficult to openly publicise some of the threats in emerging areas because that gives hints as to where to look and what might or might not be more vulnerable.
The National Risk Assessments are a good indicator - there's the ongoing one for virtual asset service providers, we've just published one on terrorist financing and money laundering, and ones are coming out on legal persons and arrangements. They have been a collaborative effort from the authorities, which help demonstrate where we believe the current and emerging threats are, and therefore where people should look.
What role will Al play in your work in future?
It is much more effective and efficient to get machine learning and artificial intelligence to go through the amount of data and numbers that we have, to draw patterns together for insight, rather than relying on the human, because we neither have the time, nor the concentration to be able to do that systematically, and to the right standards.
It then empowers us as humans to put the right judgement and viewpoint on top.
$12m held by Jersey financial institutions was recently frozen in what was described as the "largest ever" forfeiture of proceeds which came from the sale of stolen Cambodian antiquities... Such cases are often painted as a 'win' for the island, but are we not concerned how this 'dirty money' ends up here in the first place?
Any nation, the financial services they offer may be open to abuse. Because of our international status, because our IFC position, because of the differences we have in terms of our tax laws, can make it more appealing.
I see it as a continual battle. We will never win the war. What we must aim to do is work collaboratively constantly with partners to win each battle. Some of them will take time, some of them will be quicker.
The case you refer to has taken time, it's complex: trying to understand value through the looting of antiquities, how those are then moved on and sold, how they can be held in free trade zones and nobody know anything about them for years, how the money isn't clear because it's moved between different institutions, funds and trusts, who ultimately owns this stuff. There is a lot of unpicking.
And there is a constant balance between people's privacy and our necessity to ensure that criminals aren't abusing the broader economic position - individuals' privacy might be being protected, while economic wellbeing is being undermined. You see that across lots of developing countries - kleptocracy, in particular, seeks to put| the power, the influence, and therefore the money at the top of the tree, and keeps everybody else out. So they get no infrastructure, no support, no education - it just perpetuates inequality.
..Being a public sector agency that has to demonstrate its effectiveness means remaining within all the regulations and having scrutiny over the top. But some of the threat actors and adversaries try to muddy those waters, accusing us of doing things that we're not doing - but they're seeking to continue to get their gains.
Some of these kleptocrats, oligarchs and others are incredibly wealthy. They can put a significant legal team against whole nations to try and prove something to muddy those waters. And they're working on legal points, rather than whether or not their client is right or wrong and undertaking criminality. We have to be mindful of that.
There is a suspicion among some that authorities may target the 'little guy', such as small family offices, rather than the 'big' banks when it comes to financial crime. How would you respond to that?
I am solely focused on where the largest threat is, and where the largest lack of understanding is that might be abused by criminals or kleptocrats, terrorists, or organised crime gangs.
...Once you understand how you're exposed, we in Intelligence always talk about the 'so what?' question. We see a threat, but what's the 'so what?' to Jersey? What's the 'so what?' to family offices, 'so what?' for the bank, the trust sector. They need to understand where and how they might be being abused.
We can then work closely with them to be able to get the right insight, because I'm sure none of these organisations need to support criminality, want to support terrorism and financial crime here. We want them to be able to identify that suspicion and report it.
We are one of a number of competent authorities along with the regulator, law enforcement, the Law Officers' Department and Revenue that has a part to play. But I see the FIU, as the nation's only intelligence agency, as the sort of 'hub and spoke'.
But also everybody across Jersey has a responsibility to report to the FIU if they suspect money laundering or terrorist financing. Were willing to take insight from anybody.
What types of suspicious activity should be reported?
They will know their customer - anything that sits outside of normal behaviour. If a customer is just a retail individual, and they start to put £30,000, £40,000, £50,000 through their account on a daily basis, or weekly, that should be flagged.
That sudden difference in flows of money becomes important. We often talk about sort of 'source of wealth'. Where does it come from? Is it legitimate?
Criminals, by their nature, like to show off.
That's what they're doing it for - it gives them rewards they wouldn't get by doing a nine-to-five job and adding to society. It's that selfishness of having all that money for themselves, then showing off by having expensive items they can throw around.
..In Intelligence, we have to be 'professional sceptics', and professional scepticism is something that we drill into people.
As an example, from my time in banking looking at the slavery human trafficking piece, we used to talk to the bank tellers, as those that are engaged directly with the customers, about using 'professional scepticism' - just looking at behaviour, to see if they believe somebody is being exploited, being forced to go up to the table or being controlled to go up to an ATM to withdraw money.
They can report that unusual activity and we, in the FIU within the bank, could start to draw together transactional indicators, along with perhaps some open-source indicators, and some other behavioural pieces on top of data analytics. So, that one report of seeing somebody you thought was being coerced has suddenly led to this whole investigation and identification of a criminal gang that is exploiting someone.
It doesn't matter what you're doing - it is just about questioning what you see: does it make sense? Is it reasonable?
Why should the person in the street care about financial crime?
There are some terrible, abhorrent crimes that happen domestically, such as murder and violence, but in these types of crimes, we go often go back to the point that just about everything that criminals do is about gaining money or property.
Jersey, as a society, is reliant on the financial services industry - around 38% to 40% of its economy is based around it.
Everybody should be interested because everybody's economic wellbeing and future is centred very heavily on how Government can obtain the right taxes, and protect the financial services to make us that leading IFC that brings in profit that can help to sustain the broader economy.
Having the right Intelligence Unit, having the right competent authorities to be able to investigate, having the regulated entities - the banks and the trust funds, legal sector, accountancy and many others - reporting appropriately when they see potential abuse and potential suspicion is therefore critical.
It's critical to everybody in the island.
What does success look like for the FIU?
I would like to grow our insight and ability to support other agencies in complex cases.
It's difficult to do because you don't know where the information is coming from all the time - intelligence is an art form, it's not a science, so you can't define that you're going to get to a certain end point.
..wouldn't put expectations on the number of cases that we would necessarily help to unravel, but I know the FIU will be stronger than it is now in another couple of years' time with technology - and significantly stronger. We will remain a critical element.
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