On 5 June 2012, the Irish government approved the Heads of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2012 (the “Bill”). The Heads of the Bill have been published so as to facilitate consultation between interested parties on the proposed changes prior to the detailed drafting of the Bill.
The proposed amendments to the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the “Act”), due for inclusion under the Bill, follow from the experience of the Act’s operation over the last two years, recommendations received from the Financial Action Task Force on the Act and the need to ensure that the Act operates as effectively as possible.
Other issues will be incorporated into the Bill as all interested parties engage in the consultation process. These issues may include the recommendation of the Mahon Tribunal to extend enhanced customer due diligence to those domestic Politically Exposed Persons (“PEPs”) and concerns raised by the financial services sector with respect to reliance placed on third parties located outside the European Union (the “EU”) when carrying out customer due diligence.
The key amendments proposed include:
- Amendment to the definition of “occasional transaction” so that wire transfers of €1,000 or more fall under the remit of the Act and customer due diligence will apply to the beneficial owners of such funds.
- Amendment to the monetary threshold for private members’ gaming clubs when carrying out customer due diligence from €15,000 down to €2,000. In addition, when a service or transaction is entered into and involves a non-EU state, reliance on those countries designated as having equivalent requirements to the Third Money Laundering Directive, as per Section 31 of the Act, will no longer be permitted. Instead, it will be necessary for designated persons under the Act to carry out an assessment of the risks associated with the transaction themselves.
With respect to PEPs the amended Bill will make it clear that the approval of senior management must be secured once an existing customer becomes a PEP residing outside Ireland. Additionally, where a customer or business relationship presents a higher risk of money laundering, enhanced customer due diligence is necessary.
The Bill is also expected to reiterate the importance of keeping up-to-date customer due diligence documentation and to also provide for the appointment of a compliance officer/money laundering reporting officer by those deemed to be designated persons under the Act.
Finally, a new offence of providing false or misleading information or documentation is expected under the Bill, as is the ability of the Garda Síochána to seek warrants under Section 64 of the Criminal Justice Act 1994 for the purposes of carrying out investigations into suspected money laundering activities.