Regulations amending the primary anti-money laundering and countering the financing of terrorism (AML/CFT) legislation in Ireland were published on 25 November 2019. The European Union (Money Laundering and Terrorist Financing) Regulations 2019 (the Regulations) have been introduced to give further effect in Ireland to the 4th EU Money Laundering Directive.
The Regulations amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the Act) by introducing new requirements applying to firms subject to the Act (designated persons) and to the authorities responsible for AML/CFT supervision and enforcement.
Internal reporting of AML/CFT breaches
The Regulations introduce a new requirement on designated persons to put in place appropriate procedures for their employees, or persons in a comparable position, to report any contravention of the Act internally through a “specific, independent and anonymous channel”. This new reporting procedure is required to be proportionate to the nature and size of the firm concerned.
The firm’s money laundering reporting officer (MLRO) will not necessarily be the appropriate recipient of reports of any breaches of the Act and it will be important to distinguish this new reporting procedure from any pre-existing procedure for the reporting of suspicions of money laundering activity.
Duty to report convictions
A new provision added to the Act requires designated persons to inform the competent authority (i.e. the Central Bank of Ireland in the case of financial services firms) within 30 days of becoming aware of any of its management function holders or beneficial owners being convicted of an offence under the Act or under other specified legislation relating to financial services, fraud, etc. Failure to make the disclosure will constitute a criminal offence punishable by a fine and/or imprisonment.
The Regulations also introduce several new requirements on competent authorities (such as the Central Bank of Ireland) in relation to the carrying out their supervisory responsibilities. Most significant are the obligations to prevent persons convicted of a relevant offence from being involved with a designated person, to provide adequate resources and appropriately qualified staff and to co-operate and co-ordinate their activities with competent authorities in other EU Member States.
The Regulations took effect from 18 November. Designated persons should ensure that they have in place appropriate policies and/or procedures addressing the requirements for: (i) internal reporting of breaches of the Act; and (ii) the disclosure to the regulator of relevant convictions. Firms already subject to similar reporting or whistleblowing requirements will need to ensure that these new requirements are reflected in their existing processes.