AML and the The Criminal Justice Amendment Bill 2020

Although in the pipeline since January 2020 when the EU Directive came into force, the Cabinet has recently approved a bill, the Criminal Justice (Money Laundering and Terrorist Financing) Amendment Bill 2020. to transpose the criminal justice elements of the Fifth EU Money Laundering Directive and strengthen existing legislation.  Once this bill has been enacted it will bring Ireland in line with the current European anti-money laundering and countering the financing of terrorism framework.  The bill  currently had its second stage debate on 22 September 2020. 

Once we have finished enacting the above it currently looks like we will have to start considering the sixth AML directive which will come into force in December 2021, however this will be reviewed at a later date.  

Nonetheless back to the current bill which includes provisions to: 

Enhance the safeguards for financial transactions to and from high-risk third countries and sets new limits on the use of anonymous pre-paid cards; 

Bring a number of new ‘designated bodies’ under the existing legislation, this includes virtual currency providers and associated online ‘wallet providers’ for virtual currencies as well as dealers and intermediaries in the art trade; 

Precludes credit and financial institutions from creating anonymous safe-deposit boxes; 

Improve the customer due diligence (CDD) requirements of the existing legislation; 

Provide for Ministerial guidance which will clarify domestic “prominent public functions. 

Some of the principal changes that are detailed further in the bill are as follows :- 

Designated Persons 

The Bill introduces new categories of Designated Persons. These new categories will be obliged to comply with the provisions of the legislation once enacted. The new categories include the following; 

  • Persons whose professional activity is to provide assistance or advice on tax matters 
  • Property service providers (estate agents) who deal with the letting of property for which the monthly rent amounts to at least €10,000 
  • Virtual currency providers 
  • Persons involved in the trade of works of art but only in respect of transactions with a total value of at least €10,000 

 Politically Exposed Persons (“PEP”) 

There is no change to the definition of PEP. However, there are now requirements for a list of what are considered ‘prominent public functions’ to be drawn up and maintained by the Minister for Finance. Any individual executing one of these functions will be considered a PEP, which will be detailed further in the Act. 

High Risk Third Country 

The Bill introduces more precise requirements for customers established or residing in high risk third countries. The specific enhanced due diligence (“EDD”) measures that must be applied to such customers are as follows: 

  • Obtaining additional information on the customer and the beneficial owners 
  • Obtaining additional information on the nature and intended purpose of the business relationship 
  • Obtaining information on the source of funds and source of wealth of the customer and the beneficial owner 
  • Obtaining information on the reasons for the intended or performed transactions 
  • Obtaining senior management approval for establishing or continuing the business relationship 
  • Enhanced ongoing monitoring which should include an increase in the frequency and number of controls applied and selection of patterns of transactions that require further examination 

Beneficial Ownership CDD Requirements 

When undertaking CDD on a customer subject to beneficial ownership registration requirements, a Designated Person must ensure that the beneficial ownership information concerning the customer is held on a central register of beneficial owners. Where a Designated Person is a financial or credit institution, no transaction may be undertaken for that customer until the beneficial ownership information has been confirmed. 

The aim of this is to strengthen transparency and ensure that any discrepancies between ownership information provided for CDD purposes and ownership details as contained on a central register of beneficial owners are reported. 

If we can be of any assistance with the above or any other of your AML requirement s please do not hesitate to  contact us. 

Source : Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2020 No. 23 of 2020 Hari Gupta, Senior Parliamentary Researcher, Law