On 5 May 2010, the Irish President signed into law the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. The new legislation is designed to update and strengthen Ireland’s anti-money laundering and counter-terrorist financing regime, in particular implementing the 3rd Money Laundering Directive and the G-7 Financial Action Task Force recommendations.
The Act contains detailed provisions on money laundering offences committed inside and outside the State and sets out evidential rules making it easier to prove such offences. Terrorist financing offences were defined in earlier legislation in 2005.
The Act enables members of the Garda Síochána and District Court judges respectively to direct and order persons not to carry out services or transactions where money laundering or terrorist financing is suspected.
A number of bodies – described as “designated persons” – are subject to obligations of customer due diligence, reporting, record-keeping and internal training. Tipping-off is prohibited. Failure to comply with these obligations can result in substantial fines and prison terms for designated persons together with their agents, employees, partners, directors, officers and contractual counterparties.
The designated persons are: credit institutions; financial institutions; auditors; external accountants and tax advisers; independent legal professionals (barristers, solicitors or notaries carrying out certain services); trust and company service providers; property services providers; casinos; persons directing private member clubs in respect of gambling activities; traders in goods where transactions involve cash payments of at least €15,000; and other persons in classes prescribed by the Minister for Justice, Equality and Law Reform. The Act provides for the authorisation of trust and company service providers by the Minister and for the registration of those directing private members clubs.
In relation to customer due diligence, the Act distinguishes between normal, simplified and “enhanced” due diligence, with the last applying in particular to politically-exposed persons and correspondent banking relationships. Designated bodies may rely on third parties to carry out due diligence, although the designated body will remain ultimately responsible.
The Minister is able to approve guidelines for guiding designated persons on the application of these rules. Draft guidelines have been prepared for credit and other financial institutions and are currently being finalised. The position is less clear for other designated bodies. In any event, guidelines tailored to the rigorous requirements of the Act will have to be carefully drafted and followed by all concerned in what promises to be a tight enforcement regime.
The Minister has yet to decide when the Act will come into force. Although the Directive should have been implemented before 15 December 2007, and the Act is long overdue, it seems likely that a breathing space of two or three months – probably until July – will be allowed for preparing for the new regime.
