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Minister Flanagan brings into force legislation to tackle money laundering

  • · 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
  • · Regulations bring gambling service providers within the scope of anti-money laundering law

The Minister for Justice and Equality, Charlie Flanagan TD, has signed two Statutory Instruments bringing into force legislation to tackle money laundering. The Statutory Instruments commence the provisions of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 and give effect to Regulations which ensure gambling service providers are brought within the scope of Anti-Money Laundering legislation, completing Ireland’s transposition of the EU’s Fourth AML Directive.

Announcing the commencement of the new Act, the Minister said: “This legislation is really important. 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.”

The Act aims to strengthen laws combatting money laundering and terrorist financing by obliging ‘designated persons’ – ie. banks and other financial institutions – to carry out due diligence tests verifying customers’ identity and assess risk both in terms of business-wide risk assessments as well as an individual assessment in relation to each business relationship.

Other key provisions of the Act include:

· Expanding the remit of the Financial Intelligence Unit - the body located within An Garda Síochána which receives information from designated persons about suspicious transactions - and providing for enhanced international cooperation.

· 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 Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (Section 25) (Prescribed Class of Designated Person) Regulations 2018 meanwhile prescribe providers of gambling services, other than certain excluded services, as designated persons under the legislation. This will mean those providers (which include bookmakers and online gambling providers) will be obliged to carry out customer due diligence, report suspicious transactions, and comply with the other obligations under the Act.

All gambling service providers are captured by the new Regulations other than lotteries, bingo, gaming and amusement machines and land-based poker, which were found to be low-risk following a risk assessment of the sector. The customer due diligence requirements only apply where the amount of money paid to the customer or paid by the customer is more than €2,000.

Note to Editors:

While the Act and Regulations transpose the bulk of the Fourth EU Money Laundering Directive, some aspects are being transposed by the Department of Finance (i.e. the establishment of registers of beneficial ownership of companies and trusts). The deadline for the completion of those elements has been extended under the Fifth Money-Laundering Directive to 2020 and the Department of Finance is continuing to work on their transposition.

Minister Flanagan hopes to bring the General Scheme of a Bill transposing the criminal justice elements of the Fifth EU Money Laundering Directive to Cabinet before Christmas. The consideration of this General Scheme by the Government, over a year in advance of the transposition deadline, shows Ireland’s commitment to being among those Member States who will be pushing hard to have all of the necessary transposing legislation in place by the deadline of January 2020.