Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018 approved today

Preventative measures will help prevent illicit gains entering the Irish economy

New Garda powers to gather financial intelligence will facilitate the detection of criminal activity

The Minister for Justice and Equality, Charlie Flanagan T.D., today received Cabinet approval for the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018. The Bill transposes most of the provisions of the Fourth EU Money Laundering Directive and implements the most recent recommendations of the Financial Action Task Force, an international standard-setting body.

The aim of the bill is to strengthen laws to combat money laundering and terrorist financing.  The parent EU Directive will require designated persons – including entitles such as banks – to take a risk based approach to identifying and monitoring customers and business relationships.

Announcing the new Bill, the Minister said:  “This Bill is really important.  The reality is that money laundering is a crime that helps serious criminals and terrorists to function, destroying lives in the process. Criminals seek to exploit the EU’s open borders and this EU-wide measure is really important for that reason.    I and my Government colleagues are committed to systematically tackling corruption and organised crime and this Bill is one aspect of an important package of measures the Government introduced in November.”

The Bill first and foremost deals with customer due diligence – putting the onus for risk assessment on financial institutions – they will be obliged to carry out business wide and individual assessments; and it also expands the remit of the Financial Intelligence Unit.

The core provisions of the Bill are the sections dealing with customer due diligence (verifying a customer’s identity and assessing risk). They oblige designated persons to carry out a business-wide risk assessment, as well as an individual assessment in relation to each business relationship.

Other key provisions include:

  • Expanding the remit of the Financial Intelligence Unit – the body which receives information from designated persons about suspicious transactions etc – and providing for enhanced international cooperation. The Irish FIU is located within An Garda Síochána.
  • Extending the designation of a “politically exposed person” to those resident in this jurisdiction. Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, designated persons must carry out enhanced measures where a customer is a “politically exposed person”, meaning persons holding certain political, judicial or other offices abroad. These measures will now be applied nationally.
  • Lowering the threshold for determining whether a high-value goods dealer falls under the Act from €15,000 to €10,000.

The Cabinet today also approved Minister Flanagan’s proposal to amend the Criminal Justice (Corruption Offences) Bill 2017 which is currently before the Dáil. The amendment will ensure full implementation of Article 7 of the OECD Convention on the Bribery of Foreign Public Officials by making it an offence to launder the proceeds of bribery outside Ireland involving a foreign public official even if the bribery was not an offence in the place it was carried out. Both Bills form part of the Government’s package of measures to tackle ‘white collar crime’, published in November 2017.

Note to Editors:

While the Bill transposes the bulk of the Fourth EU Money Laundering Directive, some aspects will be transposed by the Department of Finance.  (i.e., the establishment of registers of beneficial ownership of companies and trusts).