Member States of the European Union were required to introduce legislation by 10 January 2020 to transpose the Fifth Anti-Money Laundering Directive (5AMLD) into national law.
The Irish Government has now amended the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010-2018.
You can view the new Criminal Justice (Money Laundering and Terrorist Financing) Act here.
The new Bill reflects the legislative outline set out previously in the 2019 General Scheme with some changes (for example, the Scheme proposed legislative provisions to support the Criminal Assets Bureau and An Garda Síochána in the administration of their AML/CTF functions by improving their access to bank records in electronic form).
Although the Bill transposes the majority of 5AMLD’s requirements, significant provisions remain outstanding. In August the Government announced that the Department of Finance would legislate for the establishment of a central register of beneficial ownership for express trusts and the establishment of centralised national bank and payment account registers. It is now likely that these will be legislated for separately, along with provisions in respect of Virtual Asset Service Providers regulation.
The new Bill introduces amendments to high and low risk factors, customer due diligence requirements, extending the scope of regulation and clarifying PEPs and beneficial ownership information. The new Bill includes the following key provisions:
The Bill creates new categories of ‘designated person’, which will be required to apply anti-money laundering measures in the course of their business, including:
Prior to the establishment of a business relationship with a customer to which beneficial ownership regulations apply, a designated person will be required to ascertain that information concerning the beneficial ownership of a customer is entered in the relevant beneficial ownership register (an entity's express trust register, the Central Register of Beneficial Ownership of Companies and Industrial Provident Societies, or the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts).
This provision builds upon that outlined in the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (as amended), which requires a relevant entity to provide beneficial ownership information to a designated person when entering into an occasional transaction, or forming a business relationship, with that designated person.
Accountants must not engage in a business relationship until the beneficial ownership information is obtained and this principle is further explained within AMLGAS-Ireland in relation to the timing of customer due diligence procedures.
Where the beneficial owner is a senior managing official, accountants will be required to verify the identity of that person, keep records of the steps taken and record any difficulties encountered in the verification process.
The definition of PEP will be widened to include ‘any individual performing a prescribed function’ and the Minister for Justice and Equality will be empowered to issue guidelines to competent authorities in respect of the functions in the State considered to be ‘prominent public functions’.
The Bill also allows accountants to continue monitoring someone who was previously a PEP for as long as is reasonably required to take into account the continuing risk posed by that person and until such time as that person is deemed to pose no further risk specific to politically exposed persons.
Designated persons must, as far as possible, examine the background and purpose of transactions which are complex or unusually large.
Accountants must conduct CDD at any time that they are required by virtue of any enactment or rule of law to contact a client for the purpose of reviewing information relating to the client’s beneficial owners.
The Bill provides a detailed list of enhanced due diligence measures that accountants are required to apply when dealing with a customer established or residing in a high-risk third country. These measures involve obtaining ‘additional information’ on the customer, beneficial owner(s), their sources of wealth, the intended nature of the business relationship, and completed or intended transactions.
Where appropriate senior management approval for establishing or continuing such a business relationship must be obtained, as well as approval to conduct enhanced monitoring ‘by increasing the number and timing of controls applied and selecting patterns of transaction that need further examination.’
There are additional defences to proceedings in relation to ‘tipping-off’ provided within the Bill where:
This amendment is designed to make provision for the sharing of information relating to suspicious transactions in group situations.
The Bill requires the Financial Intelligence Unit to ‘provide timely feedback’ to a designated person, ‘where practicable’ in respect of suspicious transaction reports made to them.
Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2018: this Act is one of a group of Acts included in a collective citation (Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 (26/2018), s. 1(3)). The Acts in this group are:
The Act was last amended on 23 April 2021.
The Fifth EU Money Laundering Directive, Directive 2018/843 of the European Parliament and of the Council of 30 May 2018 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing has a number of core elements. The Directive as a whole aims to:
The Government has approved the drafting of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill [2020] which will transpose certain criminal justice (and related) provisions from the 5th EU anti-money laundering Directive into Irish law, namely those concerned with:
The Financial Action Task Force is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent money laundering and terrorist finacing and the harm they cause to society. As a policy-making body, FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
The FATF has developed Recommendations, or FATF Standards, which ensure a co-ordinated global response to prevent organised crime, corruption and terrorism. They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes. FATF also works to preventing funding of weapons of mass destruction.
FATF reviews money laundering and terrorist financing techniques and continuously strengthens its standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity. FATF monitors countries to ensure they implement FATF standards fully and effectively, and hold countries to account that do not comply.
Ireland’s fourth FATF mutual evaluation assessment, the Mutual Evaluation Report was published in September 2017.
The Anti-Money Laundering Compliance Unit in the Department of Justice was established following the enactment of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended).
The role of the Unit is:
