Anti-Money Laundering/Counter Terrorism Financing

 

4AMLD (Directive 2015/8/49)

The 4th Anti-Money Laundering Directive 2015/8/49 (4AMLD) and the associated Funds Transfer Regulation (FTR) were agreed in 2015 at EU level.  The negotiations were led by the Department of Finance in consultation with other relevant departments, agencies and stakeholders. A series of terrorist attacks in Europe during 2016 and revelations in the Panama papers prompted the EU Commission to propose a number of amendments to 4AMLD in July 2016 and these proposed changes are now under discussion in Trilogues.  Once finalised, 4AMLD, together with amendments to be agreed in 2017, will update and replace the existing 3AMLD / FTR framework and will better align EU law with the FATF’s revised international standards on AML/CFT.

Beneficial ownership:

As of 15 November 2016, all companies and legal entities (including Industrial and Provident Societies) must take all reasonable steps to hold adequate, accurate and current information on their beneficial ownership and keep this information in their own companies’ beneficial ownership register.

This arises from the transposition of Article 30 (1) of the 4AMLD by a Statutory Instrument entitled ‘European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016’ (S.I. No. 560/2016).

Article 30(1) of 4AMLD has not been impacted by the July 2016 proposals for amendment and has therefore been transposed by S.I. 560/2016 .

Beneficial Ownership Information Note 

 

AML Guidelines

The AML guidelines are intended to guide designated persons[1] on the application of Part 4 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 which sets out the obligations of designated persons in relation to customer identification, verification and monitoring as well as enhanced CDD, suspicious transaction reporting etc. The AML guidelines have been drafted jointly by various sectors of the financial services industry.

The guidelines are designed to guide designated persons on the application of the relevant provisions of the Act. The guidelines do not constitute secondary legislation and designated persons must always refer directly to the Act when ascertaining their statutory obligations. The guidelines are subordinate to the Act.

The guidelines can be found here

Note: Guidelines on AML have been also developed by certain classes of designated person e.g. credit unions, the funds industry, the life assurance sector etc. These are available from the relevant sectoral representative bodies.

 

National Risk Assessment (NRA)

Ireland has produced its first Anti-Money Laundering and Countering the Financing of Terrorism National Risk Assessment (NRA), aiming to provide a broad assessment of Ireland’s ML/TF risks, to enhance the understanding of them, and to develop effective strategies to address them.

The results of the national risk assessment will help inform policy and operations and the allocation of resources to the areas of highest risk. This is an understanding of the areas of risk where they should have the greatest focus. This is an evolving document which will be updated periodically.

The document can be found here

A sector-specific assessment of the ML/TF risks in the gambling sector, which updates the national risk assessment, can be found here

Anti-Money Laundering Steering Committee

The Department of Finance chairs the Anti-Money Laundering Steering Committee which was set up in 2003 in order to oversee the development of the guidance notes required to facilitate the effective implementation of the money laundering and terrorist funding provisions of the Criminal Justice Acts, EU Directives on Money Laundering and the FATF recommendations. It includes representatives of the Department of Justice, the Garda Siochana, the Revenue Commissioners and the Central Bank of Ireland.  The terms of reference have been revised in 2013 to concentrate the Committee’s work on communication between the various State agencies and on engagement with the FATF assessment of Ireland.

 

Private Sector Consultative Forum (PSCF)

Irish AML/CFT policy is informed and assisted by the Private Sector Consultative Forum (PSCF) which provides an information-sharing framework for private sector stakeholders and designated persons to regularly engage with public agencies on all AML/CFT issues.

The PSCF is chaired in rotation on a half-yearly basis by members of the forum. The current Chair is from the legal services sector; predecessors were drawn from the banking and funds sectors.

 

Competent Authorities for AML

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 establishes a number of competent authorities who monitor designated persons and secure compliance with the requirements of the Act:

 

Further information is available on:

 

Image of Central Bank of Ireland logo

Image of Dept. of Justice & Equality Anti-Money Laundering Compliance Unit logo

 

 

Financial Action Task Force (FATF)

The Financial Action Task Force (FATF) (on Money Laundering) is an independent intergovernmental organisation. It is made up of 36 member nations. It is charged with developing policies to combat money laundering and terrorist financing. One of its main tasks is to publish and update Recommendations which set the international standard for measures to tackle money laundering and the financing of terrorism. These provisions set out principles for the approaches and actions to be taken by its members. The measures do however allow countries a level of flexibility as regards their implementation due to the fact that countries have various priorities and different constitutional frameworks.

FATF monitors the progress of countries in introducing AML and CFT measures using a variety of techniques including Mutual Evaluation Reports (MERs).

The Department of Finance leads the delegation of the various State bodies at FATF meetings.

 

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FATF mutual evaluation review of Ireland published – 7 September

The Financial Action Task Force (FATF) has published a report on Ireland’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework.

The September 7 report is the culmination of a rigorous mutual evaluation review process, led by the FATF and assisted by a multinational team of assessors.

During the 18-month process which led up to the publication of this report, the Department was assisted by stakeholders from a wide range of departments and agencies involved in AML/CFT work, including the Department of Justice and Equality, An Garda Síochána, the Central Bank of Ireland, the Revenue Commissioners, the Department of Foreign Affairs and Trade, the Criminal Assets Bureau, and the Office of the Director of Public Prosecutions. The expertise of personnel in each of these key agencies, as well as willing assistance and expertise given to the project by the private sector, proved crucial to achieving a successful outcome to the review.

The report acknowledges the strength of Ireland’s AML/CFT systems, the measures taken nationally to better understand money laundering and terrorist financing risks and the cooperation mechanisms developed by Ireland to combat them.

The report by the FATF notes areas where further improvement can be made and includes a series of recommended actions which Ireland should implement over the next number of years.

The Department of Finance and the Anti-Money Laundering Steering Committee is in the process of preparing an action plan to implement the various recommended actions.

Financial Action Task Force on Higher Risk Countries

At recent meetings of the FATF a number of public statements on high-risk and non-cooperative jurisdictions have been issued:

February 2018

3rd November 2017

27 June 2017

24 February 2017

21 October 2016

21 July 2016

 

Sanctions

Sanctions or restrictive measures (the two terms are used interchangeably) have been frequently imposed by the EU in recent years, either on an autonomous EU basis or implementing binding Resolutions of the Security Council of the United Nations. Sanctions are an instrument of a diplomatic or economic nature which seek to bring about a change in activities or policies such as violations of international law or human rights, or policies that do not respect the rule of law or democratic principles.

Restrictive measures imposed by the EU may target governments of third countries, or non-state entities and individuals (such as terrorist groups and terrorists). They may comprise arms embargoes, other specific or general trade restrictions (import and export bans), financial restrictions, restrictions on admission (visa or travel bans), or other measures, as appropriate.

Financial sanctions are primarily concerned with curtailing the movement of funds. In accordance with EU law, Ireland adheres to the list of sanctioned individuals and entities prescribed by the EU.

A more detailed overview of EU sanctions is available on the EU website (foreign policy) here

 

Competent Authorities for Sanctions

In Ireland, the relevant competent authorities with regard to these sanctions and corresponding penalties are the:

  •  Department of Foreign Affairs and Trade,
  •  Department of Jobs, Enterprise and Innovation, and;
  •  Central Bank of Ireland.

The unit introduces statutory instruments to provide criminal penalties for breach of the sanctions set out in the various EU regulations. As the competent authority, the Central Bank has responsibility for the administration and enforcement of financial sanctions which are concerned with curtailing the movement of payments and capital.

http://www.centralbank.ie/regulation/processes/anti-money-laundering/Pages/default.aspx

We recommend that designated persons refer to the EU and UN Consolidated Lists of Sanctions in the first instance to ensure the most up-to-date notification of sanctioned individuals.

Link to the United Nations Sanctions Committees lists:

http://www.un.org/sc/committees/consolidated_list.shtml.

Link to the EU Sanctions list:

http://eeas.europa.eu/cfsp/sanctions/consol-list/index_en.htm

 

[1]“Designated person” as defined in S25(1) of the Criminal Justice and Terrorist Financing Act 2010 (as amended) means any person, acting in the State in the course of business carried on by the person in the State, who, or that is—

a) a credit institution, except as provided by subsection (4); b) a financial institution, except as provided by subsection (4); c) an auditor, external accountant or tax adviser; d) a relevant independent legal professional; e) a trust or company service provider; f) a property service provider; g) a casino; h) a person who effectively directs a private members’ club at which gambling activities are carried on, but only in respect of those gambling activities; i) any person trading in goods, but only in respect of transactions involving payments to the person in cash of a total of at least €15,000 (whether in one transaction or in a series of transactions that are or appear to be linked to each other); or j) any other person of a prescribed class.