The publication of the Criminal Justice (Money Laundering and Terrorist Financing) Bill, 2009
Explicit formal legal recognition of "private members clubs" is one step closer following the publication this week of a new Money Laundering Bill by the Minister for Justice, Equality and Law Reform.
The primary purpose of the proposed new money laundering legislation will be to properly implement the Third EU Money Laundering Directive (2006/70/EC) and to ensure compliance with the recommendations of the Financial Action Task Force (FATF) following its Third Mutual Evaluation Report on Ireland.
What is significant from the point of view of land-based gambling operators is that the Bill includes, for the first time, both casinos and persons who are "effectively" directing private members' clubs in the list of "designated persons", which will be required to carry out certain customer due diligence and to report suspicious transactions.
The Bill also includes a specific registration requirement in relation to private members' clubs. Under the proposed new legislation, persons directing (or effectively directing) private members' clubs will be required to register with the Minister for Justice, Equality and Law Reform in accordance with procedures prescribed by the Minister.
Particulars to be entered into the register which will be kept by the Minister will include the name of the person directing (or effectively directing) the private members' club and the name and address of the premises from which they operate their private members' club. The new registration requirement will allow the Minister to keep tabs on who is active in this area.
The Minister may also prescribe any other information to be entered into the Register, but this information must relate to the business or regulation of persons directing members' clubs.
Failure to register will be a criminal offence, which can be tried either summarily or on indictment. The penalty on summary conviction will be a fine not exceeding €5,000 or imprisonment for a term not exceeding 12 months (or both), whereas conviction on indictment will attract either a fine (no upper limited is stipulated) or imprisonment for a term not exceeding 5 years (or both).
Unsurprisingly, the Bill does not provide any guidance in relation to the definitions of "casino" or "private members' clubs". In this regard, the Bill is clearly incompatible with the provisions of the Gaming and Lotteries Act, 1956. Although casinos or private members' club are not specifically proscribed by the 1956 Act, "unlawful gaming" is so widely defined, that on a strict reading of that outdated legislation, the activities of the so called "casino clubs" are prohibited. Nevertheless, explicit recognition of casinos and private members clubs on Ireland's statute books is likely to give operators in this industry some comfort pending more fundamental reform.
When the Bill is enacted into law, anti money-laundering compliance will become a real issue for casinos and private members clubs.