The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the “Act”), recently signed into law, consolidates Ireland’s existing anti-money laundering and terrorist financing laws, which until now have been contained mainly in the Criminal Justice Act 1994. The Act increases the obligations on a wide range of "designated persons" including credit and financial institutions, lawyers, accountants, estate agents, tax advisers, trust and company service providers and others in relation to money laundering and terrorist financing.
These 'designated persons' include “trust or company service providers, which means “any person whose business it is to provide any of the following services.... acting, or arranging for another person to act, as a trustee of a trust”.
A person who carries on business as a "trust or company service provider" without having first obtained the required authorisation, will commit an offence under subsection 87. 1 (1) of the Act and will be liable (a) on summary conviction, to a fine not exceeding €5,000, or imprisonment for a term not exceeding 12 months (or both), or (b) on conviction on indictment, to a fine or imprisonment not exceeding 5 years (or both).
There was a significant amount of debate, following the introduction of the Act, as to the applicability of the Act's provisions to individual, non-professional trustees. For this reason, interest groups lobbied the Department of Justice for clarification.
To what Trustees does the Act apply?
The Department of Justice has now confirmed that the requirements only apply to corporate or individual trustees whose business it is to provide trustee services on a commercial basis i.e. 'Trust or Company Service Providers (“TCSPs”), are defined under the Act as any person whose business it is to provide any of the following services:
- forming companies or other corporate bodies;
- acting as a director or secretary of a company under an arrangement with a person other than the company;
- arranging for another person to act as a director or secretary of a company;
- acting, or arranging for a person to act, as a partner of a partnership;
- providing a registered office, business address, correspondence or administrative address or other related services for a body corporate or partnership;
- acting, or arranging for another person to act, as a trustee of a trust;
- acting, or arranging for another person to act, as a nominee shareholder for a person other than a company whose securities are listed on a regulated market.
Note: A TCSP business will only be monitored by the Anti Money Laundering Compliance Unit of the Department of Justice where it is not already subject to the regulatory control of an existing body.