The Criminal Justice Bill first appeared in February last as the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill, 2013 and on 12 June 2013, this Bill was signed into law by way of the Criminal Justice Act, 2013 (the “Act”).
The Act includes minor changes to the antimoney laundering rules in the Criminal Justice (Money Laundering and Terrorist Financing) Act, 2010 (the “2010 Act”). Part 2 of the Act, other than Sections 5, 15 and 16 came into force on 14 June 2013 and therefore, the changes listed below are now in effect.
Amendment to the Definition of "Occasional Transaction"
The Act amends the definition of "occasional transaction" in the 2010 Act with the result that for customers of private members' gaming clubs, the financial thresholds prescribed for an "occasional transaction", which is one of the triggers for customer due diligence, is set at not less than €2,000, and, in the case of certain wire fund transfers, at not less than €1,000. There is also a technical amendment to clarify that the definition of "occasional transaction" which applies in all cases, other than for private MHC-8653204-1 members' gaming clubs and wire transfers, is when an amount is not less than €15,000, rather than exceeds €15,000.
Simplified Due Diligence Rules Updated
There are some changes to sections 34 and 36 of the 2010 Act. Simplified Customer Due Diligence (“SCDD”) applies to "specified customers" and "specified products". The changes mean that SCDD should only apply under Section 34 of the Act where the designated person has taken steps to satisfy itself that the customer or product is actually a "specified customer" or "specified product".
Similarly, the Act provides that the exemption in Section 36 of the 2010 Act from the requirement to obtain information on the purpose and intended nature of a business relationship, should only apply where the designated person has confirmed the customer's status as a "specified customer" or "specified product".
Amendment of Rules Relating to Politically Exposed Persons (“PEP's”)
Now enhanced Customer Due Diligence (“CDD”) measures must also be applied to an existing customer who subsequently becomes a PEP and enhanced on-going monitoring must be applied to business relationships with a customer who is a PEP.
Mandatory Enhanced CDD for High Risk Customers
Section 39 of the 2010 Act has been updated to apply enhanced due diligence in circumstances where there is a heightened risk of money laundering or terrorist financing so that it is a mandatory requirement to apply enhanced CDD measures where the designated person has reasonable grounds to believe that there is a higher risk of money laundering or terrorist financing.
Internal Policies and Procedures
Designated person’s policies and procedures to prevent and detect money laundering and terrorist financing are now required to address the following:
- measures taken to keep documents and information relating to the customers of that designated person up to date;
- additional measures taken to give effect to enhanced CDD rules; and
- steps to manage the risk of money laundering or terrorist financing which may arise in technological developments, including the use of new products and new practices, and the manner in which services relating to such developments are delivered.
Maintenance of Records Outside the State
The Act amends section 55 of the 2010 Act to allow records to be kept outside the State. However, where such records are kept outside the State the designated person must ensure that those records are produced in the State to:
- a member of the Gardaí Síochána;
- an authorised officer; and
- a person to whom the designated person is required to produce such records in relation to his or her business, trade or profession as soon as practicable after the records concerned are requested, and where the obligation to produce the records arises under an order of court, within such period specified by the court order.
There is a proposed extension of the enforcement powers of the state competent authorities established by the 2010 Act, for example, the Central Bank, so as to allow such authorities to issue directions to designated persons falling within their charge to take specific actions or to establish specific processes or procedures that, in the opinion of the authority, are reasonably necessary for the purposes of compliance with the Act. The timescales for complying with such directions must be clearly set out in the direction.
Part 3 of the Criminal Justice, Act 2013
Part 3 was inserted just prior to the enactment of the legislation. It makes provision for mobile phone networks to be shut down for a limited period in a limited area to prevent their use in remotely MHC-8653204-1 detonating a bomb. Part 3 of the Act provides that the Minister for Justice and Equality, following application from the Garda Siochana, may give such an authorisation in specified circumstance.