Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018

Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2018 Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 26 of 2018 CRIMINAL JUSTICE (MONEY LAUNDERING AND TERRORIST FINANCING) (AMENDMENT) ACT 2018 CONTENTS

PART 1

Preliminary and General

Section 1

Section 2

PART 2

Amendment of Act of 2010

Section 3

Section 4

Section 5

Section 6

Section 7

Section 8

Section 9

Section 10

Section 11

Section 12

Section 13

Section 14

Section 15

Section 16

Section 17

Section 18

Section 19

Section 20

Section 21

Section 22

Section 23

Section 24

Section 25

Section 26

Section 27

Section 28

Section 29

Section 30

Section 31

Section 32

Section 33

Section 34

Section 35

Section 36

Section 37

Section 38

Section 39

Section 40

PART 3

Consequential Amendments

Section 41

PART 1

Preliminary and General Short title, commencement and collective citation 1. (1) This Act may be cited as the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018.

Definitions 2. In this Act— “Act of 2010” means Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 ; “Act of 2013” means Criminal Justice Act 2013 .

PART 2

Amendment of Act of 2010 Amendment of section 2 of Act of 2010 3. Section 2 of the Act of 2010 is amended— (a) in subsection (1)— (i) by the deletion of the definition of “Implementing Directive”, and (ii) by the insertion of the following definition before the definition of “Minister”: “ ‘Fourth Money Laundering Directive’ means Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 20152 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC;”, and (b) by the substitution of the following subsection for subsection (2): “(2) A word or expression used in this Act and also used in the Fourth Money Laundering Directive has, unless the contrary intention appears, the same meaning in this Act as in that Directive.”.

Amendment of section 24(1) of Act of 2010 4. Section 24(1) of the Act of 2010 is amended— (a) by the insertion of the following definitions after the definition of “business relationship”: “ ‘business risk assessment’ has the meaning given to it by section 30A; ‘Capital Requirements Regulation’ means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 20133 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012; ‘collective investment undertaking’ means— (a) an undertaking for collective investment in transferable securities authorised in accordance with the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 ( S.I. No. 352 of 2011 ) or otherwise in accordance with the Directive of 2009, (b) an alternative investment fund within the meaning of the European Union (Alternative Investment Fund Managers) Regulations 2013 ( S.I. No. 257 of 2013 ), (c) a management company authorised in accordance with the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 or otherwise in accordance with the Directive of 2009, or (d) an alternative investment fund manager within the meaning of the European Union (Alternative Investment Fund Managers) Regulations 2013;”, (b) by the insertion of the following definition after the definition of “competent authority”: “ ‘correspondent relationship’ means— (a) the provision of banking services by one bank as the correspondent to another bank as the respondent, including providing a current or other liability account and related services, such as cash management, international funds transfers, cheque clearing, payable-through accounts and foreign exchange services, or (b) the relationships between and among credit institutions and financial institutions including where similar services are provided by a correspondent institution to a respondent institution, and including relationships established for securities transactions or funds transfers;”, (c) in the definition of “credit institution” by the substitution of the following paragraph for paragraph (a): “(a) a credit institution within the meaning of point (1) of Article 4(1) of the Capital Requirements Regulation, or”, (d) by the insertion of the following definition after the definition of “designated person”: “ ‘Directive of 2009’ means Directive 2009/65/EC of the European Parliament and of the Council of 13 July 20094

on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS);”, (e) by the insertion of the following definition after the definition of “EEA State”: “ ‘electronic money’ means electronic money within the meaning of the European Communities (Electronic Money) Regulations 2011 ( S.I. No. 183 of 2011 );”, (f) by the deletion of the definition of “Electronic Money Directive”, (g) by the substitution of the following definition for the definition of “financial institution”: “ ‘financial institution’ means— (a) an undertaking that carries out one or more of the activities set out at reference numbers 2 to 12, 14 and 15 of the Schedule to the European Union (Capital Requirements) Regulations 2014 ( S.I. No. 158 of 2014 ) or foreign exchange services, but does not include an undertaking— (i) that does not carry out any of the activities set out at those reference numbers other than one or more of the activities set out at reference number 7, and (ii) whose only customers (if any) are members of the same group as the undertaking, (b) an insurance undertaking within the meaning of Regulation 3 of the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ), in so far as it carries out life assurance activities, (c) a person, other than a person falling within Regulation 4(1) of the European Union (Markets in Financial Instruments) Regulations 2017 ( S.I. No. 375 of 2017 ), whose regular occupation or business is— (i) the provision to other persons, or the performance, of investment services and activities within the meaning of those Regulations, or (ii) bidding directly in auctions in accordance with Commission Regulation (EU) No 1031/2010 of 12 November 20105 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community on behalf of its clients, (d) an investment business firm within the meaning of the Investment Intermediaries Act 1995 (other than a non-life insurance intermediary within the meaning of that Act), (e) a collective investment undertaking that markets or otherwise offers its units or shares, (f) an insurance intermediary within the meaning of the Insurance Mediation Directive (other than a tied insurance intermediary within the meaning of that Directive) that provides life assurance or other investment-related services, or

(g) An Post, in respect of any activity it carries out, whether as principal or agent— (i) that would render it, or a principal for whom it is an agent, a financial institution as a result of the application of any of the foregoing paragraphs, (ii) that is set out at reference number 1 in the Schedule to the European Union (Capital Requirements) Regulations 2014, or (iii) that would render it, or a principal for whom it is an agent, an investment business firm within the meaning of the Investment Intermediaries Act 1995 (other than a non-life insurance intermediary within the meaning of that Act) if section 2(6) of that Act did not apply;”, (h) by the substitution of the following definition for the definition of “group”: “ ‘group’ means a group of undertakings which consists of a parent undertaking, its subsidiaries, and the entities in which the parent undertaking or its subsidiaries hold a participation, as well as undertakings linked to each other by a relationship within the meaning of Article 22 of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 20136 on the annual financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC;”, (i) by the insertion of the following definition after the definition of “group”: “ ‘high-risk third country’ means a jurisdiction identified by the European Commission in accordance with Article 9 of the Fourth Money Laundering Directive;”, (j) by the deletion of the definition of “Life Assurance Consolidation Directive”, (k) by the insertion of the following definitions after the definitions of “member”: “ ‘monitoring’, in relation to a business relationship between a designated person and a customer, means the designated person, on an ongoing basis— (a) scrutinising transactions, and the source of wealth or of funds for those transactions, undertaken during the relationship in order to determine if the transactions are consistent with the designated person’s knowledge of— (i) the customer, (ii) the customer’s business and pattern of transactions, and (iii) the customer’s risk profile (as determined under section 30B), and (b) ensuring that documents, data and information on customers are kept up to date in accordance with its internal policies, controls and procedures adopted in accordance with section 54; ‘national risk assessment’ means the assessment carried out by the State in accordance with paragraph 1 of Article 7 of the Fourth Money Laundering Directive;”,

(l) in the definition of “occasional transaction”— (i) by the substitution of the following paragraph for paragraph (b): “(b) in a case where the transaction concerned consists of a transfer of funds (within the meaning of Regulation (EU) No. 2015/847 of the European Parliament and of the Council of 20 May 20157 ) that the amount of money to be transferred is in aggregate not less than €1,000,”, (ii) by the insertion of the following paragraph after paragraph (b): “(bb) in a case where the designated person concerned is a person referred to in section 25(1)(i), that the amount concerned— (i) paid to the designated person by the customer, or (ii) paid to the customer by the designated person, is in aggregate not less than €10,000, and”, and (iii) in paragraph (c), by the substitution of “(a), (b) or (bb)” for “(a) or (b)”, (m) by the substitution of the following definition for the definition of “public body”: “ ‘public body’ means an FOI body within the meaning of the Freedom of Information Act 2014 ;”, (n) by the deletion of the definition of “Recast Banking Consolidation Directive”, (o) by the substitution of the following definition for the definition of “regulated market”: “ ‘regulated market’ means— (a) a regulated market with the meaning of point (21) of Article 4(1) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 20148 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, located within the EEA, or (b) a regulated market that subjects companies whose securities are admitted to trading to disclosure obligations which are equivalent to the following: (i) disclosure obligations set out in Articles 17 and 19 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 20149 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, (ii) disclosure obligations consistent with Articles 3, 5, 7, 8, 10, 14 and 16 of Directive 2003/71/EC of the European Parliament and of the Council of 4 November 200310 on the prospectuses to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC, (iii) disclosure obligations consistent with Articles 4 to 6, 14, 16 to 19 and 30 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 200411 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, and

(iv) disclosure requirements consistent with EU legislation made under the provisions mentioned in subparagraphs (i) to (iii);”, (p) by the insertion of the following definition after the definition of “relevant professional adviser”: “ ‘senior management’ means an officer or employee with sufficient knowledge of the institution’s money laundering and terrorist financing risk exposure and sufficient seniority to take decisions affecting its risk exposure, and need not, in all cases, be a member of the board of directors;”, and (q) by the insertion of the following definition after the definition of “transaction”: “ ‘transferable securities’ means transferable securities within the meaning of the European Union (Markets in Financial Instruments) Regulations 2017;”.

Amendment of section 25 of Act of 2010 5. Section 25 of the Act of 2010 is amended— (a) in subsection (1)— (i) by the substitution of the following paragraph for paragraph (d): “(d) subject to subsection (1A), a relevant independent legal professional,”, (ii) in paragraph (i)— (I) by the insertion of “or by the person” after “to the person”, and (II) by the substitution of “€10,000” for “€15,000”, and (b) by the insertion of the following subsection after subsection (1): “(1A) A relevant independent legal professional shall be a designated person only as respects the carrying out of the services specified in the definition of ‘relevant independent legal professional’ in section 24(1).”.

Beneficial owner in relation to bodies corporate 6. The Act of 2010 is amended by the substitution of the following for section 26: “26. In this Part, ‘beneficial owner’, in relation to a body corporate, has the meaning given to it by point (6)(a) of Article 3 of the Fourth Money Laundering Directive.”.

Amendment of section 27 of Act of 2010 7. Section 27 of the Act of 2010 is amended in paragraph (b) by the substitution of “controls” for “exercises control over the management of”.

Amendment of section 28 of Act of 2010 8. Section 28 of the Act of 2010 is amended— (a) by the deletion of subsection (1), and (b) in subsection (2)— (i) in paragraph (a), by the deletion of “at least 25 per cent of”, (ii) in paragraph (c), by the substitution of “the trust;” for “the trust.”, and (iii) by the insertion of the following paragraphs after paragraph (c): “(d) the settlor; (e) the trustee; (f) the protector.”.

Amendment of section 30 of Act of 2010 9. Section 30 of the Act of 2010 is amended— (a) in subsection (1)— (i) in paragraph (a), by the deletion of “at least 25 per cent of”, (ii) in paragraph (c)— (I) by the deletion of “at least 25 per cent of”, and (II) by the substitution of “or arrangement,” for “or arrangement.”, and (iii) by the insertion of the following paragraph after paragraph (c): “(d) any person holding a position, in relation to the legal entity or legal arrangement that is similar or equivalent to the position specified in paragraphs (d) to (f) of section 28(2) in relation to a trust.”, and (b) by the deletion of subsection (4).

Risk assessment by designated persons 10. The following Chapter is inserted after Chapter 1 of Part 4 of the Act of 2010: “Chapter 1A Risk assessment by designated persons Business risk assessment by designated persons 30A. (1) A designated person shall carry out an assessment (in this Act referred to as a ‘business risk assessment’) to identify and assess the risks of money laundering and terrorist financing involved in carrying on the designated person’s business activities taking into account at least the following risk factors: (a) the type of customer that the designated person has; (b) the products and services that the designated person provides; (c) the countries or geographical areas in which the designated person operates; (d) the type of transactions that the designated person carries out; (e) the delivery channels that the designated person uses; (f) other prescribed additional risk factors.

Application of risk assessment in applying customer due diligence 30B. (1) For the purposes of determining the extent of measures to be taken under subsections (2) and (2A) of section 33 and subsections (1) and (3) of section 35 a designated person shall identify and assess the risk of money laundering and terrorist financing in relation to the customer or transaction concerned, having regard to— (a) the relevant business risk assessment, (b) the matters specified in section 30A(2), (c) any relevant risk variables, including at least the following: (i) the purpose of an account or relationship; (ii) the level of assets to be deposited by a customer or the size of transactions undertaken; (iii) the regularity of transactions or duration of the business relationship; (iv) any additional prescribed risk variable, (d) the presence of any factor specified in Schedule 3 or prescribed under section 34A suggesting potentially lower risk, (e) the presence of any factor specified in Schedule 4, and (f) any additional prescribed factor suggesting potentially higher risk.

Amendment of section 33 of Act of 2010 11. Section 33 of the Act of 2010 is amended— (a) in subsection (1), by the substitution of “subsection (2)” for “subsections (2) and, where applicable, (4),”, (b) in subsection (1)(d)(ii), by the substitution of “customer,” for “customer.”, (c) by the insertion of the following paragraph after subsection (1)(d)(ii): “and (e) at any time, including a situation where the relevant circumstances of a customer have changed, where the risk of money laundering and terrorist financing warrants their application.”, (d) in subsection (2), by the insertion of “, in accordance with section 30B,” after “The measures that shall be applied”, (e) by the insertion of the following subsection after subsection (2): “(2A) When applying the measures specified in subsection (2), a designated person shall verify that any person purporting to act on behalf of the customer is so authorised and identify and verify the identity of that person in accordance with subsection (2).”, (f) by the deletion of subsection (4), (g) in subsection (5), by the substitution of “subsection (2)” for “subsections (2) and, where applicable, (4),” in both places where it occurs, (h) in subsection (6)— (i) by the substitution of “a credit institution or financial institution may allow an account, including an account that permits transactions in transferable securities, to be opened with it” for “a credit institution may allow a bank account to be opened with it”, and (ii) by the substitution of “subsection (2)” for “subsections (2) and, where applicable, (4)”, (i) by the substitution of the following subsections for subsection (7): “(7) In addition to the measures required in relation to a customer and a beneficial owner under this section, credit institutions and financial institutions shall apply the measures specified in subsections (7A) to (7C) to the beneficiaries of life assurance and other investment-related assurance policies. (7A) As soon as the beneficiaries of life assurance and other investment-related assurance policies are identified or designated, a credit institution or financial institution shall— (a) take the names of beneficiaries that are identified as specifically named persons or legal arrangements, and (b) in the case of beneficiaries designated by characteristics, class or other means, obtain sufficient information to satisfy the institution that it will be able to establish the identity of the beneficiary at the time of the payout. (7B) A credit institution or financial institution shall verify the identity of a beneficiary referred to in paragraph (a) or (b) of subsection (7A) at the time of the payout in accordance with subsection (2).

(7C) In the case of assignment, in whole or in part, of a policy of life assurance or other investment-related assurance to a third party, a credit institution or financial institution that is aware of the assignment shall identify the beneficial owner at the time of the assignment to the natural or legal person, or legal arrangement, receiving for his or her, or its, own benefit the value of the policy assigned. (7D) In addition to the measures required in relation to a customer and a beneficial owner, in the case of beneficiaries of trusts or of similar legal arrangements that are designated by particular characteristics or class, a designated person shall obtain sufficient information concerning the beneficiary to satisfy the designated person that it will be able to establish the identity of the beneficiary at the time of the payout or at the time of the exercise by the beneficiary of its vested rights.”, (j) in subsection (8), by the substitution of— (i)“Subject to subsection (8A), a designated person” for “A designated person”, and (ii)“subsection (2)” for “subsection (2) or (4)”, (k) by the insertion, after subsection (8) of the following: “(8A) Nothing in subsection (8) or section 35(2) shall operate to prevent a relevant independent legal professional or relevant professional adviser— (a) ascertaining the legal position of a person, or (b) performing the task of defending or representing a person in, or in relation to, civil or criminal proceedings, including providing advice on instituting or avoiding such proceedings.”, (l) in subsection (9), by the substitution of “A designated person” for “Except as provided by section 34, a designated person”, and (m) by the deletion of subsection (10).

Electronic money derogation 12. The Act of 2010 is amended by the insertion of the following section after section 33: “33A. (1) Subject to section 33(1)(c) and (d) and subsection (2), a designated person is not required to apply the measures specified in subsection (2) or (2A) of section 33, or section 35, with respect to electronic money if— (a) the payment instrument concerned— (i) is not reloadable, or (ii) cannot be used outside of the State and has a maximum monthly payment transactions limit not exceeding €250, (b) the monetary value that may be stored electronically on the payment instrument concerned does not exceed— (i) €250, or (ii) where the payment instrument cannot be used outside the State, €500, (c) the payment instrument concerned is used exclusively to purchase goods and services, (d) the payment instrument concerned cannot be funded with anonymous electronic money, (e) the issuer of the payment instrument concerned carries out sufficient monitoring of the transactions or business relationship concerned to enable the detection of unusual or suspicious transactions, and (f) the transaction concerned is not a redemption in cash or cash withdrawal of the monetary value of the electronic money of an amount exceeding €100.

Simplified customer due diligence 13. The Act of 2010 is amended by the insertion of the following section after section 34: “34A. (1) Subject to section 33(1)(c) and (d), a designated person may take the measures specified in sections 33(2) and 35 in such manner, to such extent and at such times as is reasonably warranted by the lower risk of money laundering or terrorist financing in relation to a business relationship or transaction where the designated person— (a) identifies in the relevant business risk assessment, an area of lower risk into which the relationship or transaction falls, and (b) considers that the relationship or transaction presents a lower degree of risk.

Amendment of section 35 of Act of 2010 14. Section 35 of the Act of 2010 is amended— (a) in subsection (2), by the substitution of “Subject to section 33(8A), a designated person” for “A designated person”, and (b) by the substitution of the following for subsection (3): “(3) A designated person shall monitor any business relationship that it has with a customer to the extent reasonably warranted by the risk of money laundering or terrorist financing.”.

Examination of background and purpose of certain transactions 15. The Act of 2010 is amended by the insertion of the following section after section 36: “36A. (1) A designated person shall, in accordance with policies and procedures adopted in accordance with section 54, examine the background and purpose of all complex or unusually large transactions, and all unusual patterns of transactions, which have no apparent economic or lawful purpose.

Amendment of section 37 of Act of 2010 16. (1) Section 37 of the Act of 2010 is amended— (a) by the substitution of the following subsection for subsection (1): “(1) A designated person shall take steps to determine whether or not— (a) a customer, or a beneficial owner connected with the customer or service concerned, or (b) a beneficiary of a life assurance policy or other investment-related assurance policy, or a beneficial owner of the beneficiary, is a politically exposed person or an immediate family member, or a close associate, of a politically exposed person.”, (b) by the substitution of the following subsection for subsection (2): “(2) The designated person shall take the steps referred to in subsection (1)— (a) in relation to a person referred to subsection (1)(a), prior to— (i) establishing a business relationship with the customer, or (ii) carrying out an occasional transaction with, for or on behalf of the customer or assisting the customer to carry out an occasional transaction, and (b) in relation to a person mentioned in subsection (1)(b)— (i) prior to the payout of the policy, or (ii) at the time of the assignment, in whole or in part, of the policy.”, (c) in subsection (3), by the insertion of “, or beneficiary” after “the customer”, (d) in subsection (4)— (i) by the deletion of “residing in a place outside the State”, and (ii) by the substitution of the following paragraph for paragraph (c): “(c) in addition to measures to be applied in accordance with section 35(3), apply enhanced monitoring of the business relationship with the customer.”, (e) in subsection (5), by the insertion of “or financial institution” after “a credit institution”, (f) in subsection (6), by the deletion of “residing in a place outside the State, and”, (g) by the insertion of the following subsection after subsection (6): “(6A) If a designated person knows or has reasonable grounds to believe that a beneficiary of a life assurance or other investment-related assurance policy, or a beneficial owner of the beneficiary concerned, is a politically exposed person, or an immediate family member or a close associate of a politically exposed person, and that, having regard to section 39, there is a higher risk of money laundering or terrorist financing, it shall— (a) inform senior management before payout of policy proceeds, and (b) conduct enhanced scrutiny of the business relationship with the policy holder.”, (h) in subsection (7), by the substitution of “subsections (4), (6) and (6A)” for “subsections (4) and (6)”, and

(i) in the definition of “specified official” in subsection (10)— (i) in paragraph (b), by the insertion of “or of a similar legislative body” after “a member of parliament”, (ii) by the insertion after paragraph (b) of the following paragraph: “(bb) a member of the governing body of a political party;”, and (iii) by the substitution for paragraph (e) of the following paragraphs: “(e) an ambassador, chargé d’affairs or high-ranking officer in the armed forces; (f) a director, deputy director or member of the board of, or person performing the equivalent function in relation to, an international organisation.”.

Correspondent relationships with third-country respondent institutions 17. The Act of 2010 is amended by the substitution of the following section for section 38: “38. (1) A credit institution or financial institution (‘the institution’) shall not enter into a correspondent relationship with another credit institution or financial institution (‘the respondent institution’) situated in a place other than a Member State unless, prior to commencing the relationship, the institution— (a) has gathered sufficient information about the respondent institution to understand fully the nature of the business of the respondent institution, (b) is satisfied on reasonable grounds, based on publicly available information, that the reputation of the respondent institution, and the quality of supervision or monitoring of the operation of the respondent institution in the place, are sound, (c) is satisfied on reasonable grounds, having assessed the anti-money laundering and anti-terrorist financing controls applied by the respondent institution, that those controls are sound, (d) has ensured that approval has been obtained from the senior management of the institution, (e) has documented the responsibilities of each institution in applying anti-money laundering and anti-terrorist financing controls to customers in the conduct of the correspondent relationship and, in particular— (i) the responsibilities of the institution arising under this Part, and (ii) any responsibilities of the respondent institution arising under requirements equivalent to those specified in the Fourth Money Laundering Directive, and (f) in the case of a proposal that customers of the respondent institution have direct access to a payable-through account held with the institution in the name of the respondent institution, is satisfied on reasonable grounds that the respondent institution— (i) has identified and verified the identity of those customers, and is able to provide to the institution, upon request, the documents (whether or not in electronic form) or information used by the institution to identify and verify the identity of those customers, (ii) has applied measures equivalent to the measure referred to in section 35(1) in relation to those customers, and (iii) is applying measures equivalent to the measure referred to in section 35(3) in relation to those customers.

Enhanced customer due diligence - high-risk third countries 18. The Act of 2010 is amended by the insertion of the following section after section 38: “38A. (1) Subject to subsection (2), a designated person shall apply measures, including enhanced monitoring of the business relationship, to manage and mitigate the risk of money laundering and terrorist financing, additional to those specified in this Chapter, when dealing with a customer established or residing in a high-risk third country.

Enhanced customer due diligence in cases of heightened risk 19. The Act of 2010 is amended by the substitution of the following section for section 39: “39. (1) Without prejudice to sections 37, 38 and 59, a designated person shall apply measures to manage and mitigate the risk of money laundering or terrorist financing, additional to those specified in this Chapter, to a business relationship or transaction that presents a higher degree of risk.

Amendment of section 40 of Act of 2010 20. Section 40 of the Act of 2010 is amended— (a) in subsection (1)— (i) in paragraph (b), by the substitution of “the Fourth Money Laundering Directive, in accordance with Section 2 of Chapter VI of that Directive” for “the Third Money Laundering Directive in accordance with Section 2 of Chapter V of that Directive,”, (ii) by the deletion of “or” after paragraph (b), (iii) in paragraph (c)— (I) by the substitution of “a place (other than a Member State) which is not a high-risk third country” for “a place designated under section 31”, (II) by the substitution of “the Fourth Money Laundering Directive” for “the Third Money Laundering Directive”, (III) in subparagraph (iii), by the substitution of “the place, or” for “the place.”, (iv) by the insertion of the following paragraph after paragraph (c): “(d) a person who carries on business in a high-risk third country, is a branch or majority-owned subsidiary of an obliged entity established in the Union, and fully complies with group-wide policies and procedures in accordance with Article 45 of the Fourth Money Laundering Directive and is— (i) a credit institution authorised to operate as a credit institution under the laws of the place, (ii) a financial institution (other than an undertaking that is a financial institution solely because the undertaking provides either foreign exchange services or payment services, or both) authorised to operate as a financial institution under the laws of the place, or (iii) an external accountant, auditor, tax adviser, legal professional or trust or company service provider subject to mandatory professional registration or mandatory professional supervision under the laws of the place.”, (b) by the insertion of the following subsection after subsection (1): “(1A) Without prejudice to the generality of paragraphs (b) and (c) of subsection (1), for the purposes of those paragraphs, a person is supervised or monitored for compliance with the requirements specified in the Fourth Money Laundering Directive, in accordance with Section 2 of Chapter VI, or requirements equivalent to those requirements, where— (a) the person and the designated person seeking to rely upon this section are part of the same group, (b) the group applies customer due diligence and record keeping measures and policies and procedures to prevent and detect the commission of money laundering and terrorist financing in accordance with the Fourth Money Laundering Directive or requirements equivalent to those specified in the Fourth Money Laundering Directive, and

(c) the effective implementation of the requirements referred to in paragraph (b) is supervised at group level by a competent authority of the state where the parent company is incorporated.”, and (c) in subsection (4)(b), by the substitution of “the designated person is satisfied that the circumstances specified in paragraphs (a) to (c) of subsection (1A) exist, or” for “the designated person is satisfied,”.

Functions of State Financial Intelligence Unit 21. Part 4 of the Act of 2010 is amended by the insertion of the following Chapter after Chapter 3: “Chapter 3A State Financial Intelligence Unit 40A. (1) FIU Ireland may carry out, on behalf of the State, all the functions of an EU Financial Intelligence Unit (FIU) under the Fourth Money Laundering Directive.

Powers of FIU Ireland to receive and analyse information 40B. (1) FIU Ireland shall be responsible for receiving and analysing suspicious transaction reports and other information relevant to money laundering or terrorist financing for the purpose of preventing, detecting and investigating possible money laundering or terrorist financing.

Powers of certain members of FIU Ireland to obtain information 40C. (1) A member of the Garda Síochána who is a member of FIU Ireland shall have access to the central registers established by the State for the purposes of paragraph (3) of Article 30 and paragraph (4) of Article 31 of the Fourth Money Laundering Directive.

Power of FIU Ireland to respond to requests for information from competent authorities 40D. (1) FIU Ireland shall respond as soon as practicable to any request for information which is based on a concern relating to money laundering or terrorist financing that it receives from— (a) a competent authority, (b) the Revenue Commissioners, or (c) the Minister for Employment Affairs and Social Protection.

Power of FIU Ireland to share information 40E. (1) FIU Ireland may share information with other Financial Intelligence Units (FIUs), in accordance with subsection III of Section 3 of Chapter VI of the Fourth Money Laundering Directive.

Amendment of section 42 of Act of 2010 22. Section 42 of the Act of 2010 is amended— (a) in subsection (1), by the substitution of “FIU Ireland” for “the Garda Síochána”, (b) in subsection (7), by the substitution of “FIU Ireland” for “the Garda Síochána”, and (c) by the insertion of the following subsection after subsection (6): “(6A) A designated person who is required to make a report under this section shall respond to any request for additional information by FIU Ireland or the Revenue Commissioners as soon as practicable after receiving the request and shall take all reasonable steps to provide any information specified in the request.”.

Amendment of section 44 of Act of 2010 23. Section 44 of the Act of 2010 is amended by the deletion of “or 43” in both places where it occurs.

Amendment of section 51 of Act of 2010 24. Section 51 of the Act of 2010 is amended— (a) by the substitution of the following subsection for subsection (2): “(2) It is a defence in any proceedings against a person for an offence under section 49, in relation to a disclosure, for the person to prove that, at the time of the disclosure— (a) the person was a credit institution or financial institution or a majority-owned subsidiary, or a branch, of a credit institution or financial institution, or made the disclosure on behalf of a credit institution or a financial institution or a majority-owned subsidiary, or a branch, of a credit institution or financial institution, (b) the disclosure was to a credit institution or a financial institution or a majority-owned subsidiary, or a branch, of a credit institution or financial institution, (c) the institution to which the disclosure was made was situated in a Member State or a country other than a high-risk third country, (d) both the institution making the disclosure, or on whose behalf the disclosure was made, and the institution to which it was made belonged to the same group, and (e) both the institutions referred to in paragraph (d) were in compliance with group-wide policies and procedures adopted in accordance with section 54 or, as the case may be, Article 45 of the Fourth Money Laundering Directive.”, and (b) in subsection (3)(b), by the substitution of “or in a country other than a high-risk third country” for “or in a place designated under section 31”.

Amendment of section 52(2)(c) of Act of 2010 25. Section 52(2)(c) of the Act of 2010 is amended by the substitution of “a country other than a high-risk third country” for “a place designated under section 31”.

Internal policies, controls and procedures 26. The Act of 2010 is amended by the substitution of the following section for section 54: “54. (1) A designated person shall adopt internal policies, controls and procedures in relation to the designated person’s business to prevent and detect the commission of money laundering and terrorist financing.

Amendment of section 55 of Act of 2010 27. Section 55 of the Act of 2010 is amended— (a) in subsection (1)(b), by the substitution of “correspondent relationship” for “correspondent banking relationship”, (b) in subsection (4) (amended by section 12(a) of the Act of 2013), by the substitution of “Subject to subsections (4A), (4B) and (4C), the documents and other records” for “The documents and other records”, (c) in subsection (4)(b), by the substitution of “correspondent relationship” for “correspondent banking relationship”, (d) by the insertion after subsection (4), of the following subsections: “(4A) Where a member of the Garda Síochána not below the rank of Sergeant having carried out a thorough assessment of the necessity and proportionality of further retention is satisfied— (a) that certain documents or records, or documents or records relating to a certain business relationship or occasional transaction, are required for the purposes of an investigation related to money laundering or terrorist financing, or (b) notwithstanding the fact that a decision to institute proceedings against a person may not have been taken, that the documents or records are likely to be required for the prosecution of an offence of money laundering or terrorist financing, the member may give a direction in writing to a designated person to retain the documents and other records for a period, up to a maximum of 5 years, additional to the period referred to in subsection (4). (4B) Where a direction has been given to a designated person in accordance with subsection (4A) and neither paragraph (a) nor (b) of that subsection continue to apply a member of the Garda Síochána shall, as soon as practicable, notify the designated person to whom the direction was given of that fact and the direction shall expire on the date of that notification. (4C) A designated person who is given a direction under subsection (4A) shall retain the documents or records specified in the direction until the earlier of— (a) the expiration of the additional period specified in the direction, and (b) the expiration of the direction.”, and (e) by the insertion of the following subsection after subsection (7A) (inserted by section 12(b) of the Act of 2013): “(7B) Upon the expiry of the retention periods referred to in this section a designated person shall ensure that any personal data contained in any document or other record retained solely for the purposes of this section is deleted.”.

Amendment of section 56 of Act of 2010 28. Section 56 of the Act of 2010 is amended— (a) in subsection (1), by the deletion of “credit institution or financial institution that is a”, (b) in subsection (1)(a), by the substitution of “5 years” for “6 years”, and (c) in subsection (2), by the substitution of “A designated person who” for “A credit institution or financial institution that”.

Group-wide policies and procedures 29. The Act of 2010 is amended by the substitution of the following section for section 57: “Group-wide policies and procedures 57. (1) A designated person that is part of a group shall implement group-wide policies and procedures, including data protection policies and policies and procedures for sharing information within the group, for the purposes of carrying out customer due diligence and preventing and detecting the commission of money laundering and terrorist financing.

Additional measures where implementation of policies and procedures is not possible 30. The Act of 2010 is amended by the insertion of the following section after section 57: “57A. (1) Where a competent authority receives a notification under section 57(3)(b) and is not satisfied that the additional measures applied in accordance with that subsection are sufficient for the purposes of carrying out customer due diligence and preventing and detecting the commission of money laundering and terrorist financing it shall exercise additional supervisory actions, where necessary requesting a group to close down its operations in the third country and may, by notice in writing, direct the designated person to take such additional actions as the competent authority considers necessary to mitigate the risk of money laundering or terrorist financing.

Relationships between certain institutions and shell banks 31. The Act of 2010 is amended by the substitution of the following section for section 59: “59. (1) A credit institution or financial institution shall not enter into a correspondent relationship with a shell bank.

Amendment of section 62(1) of Act of 2010 32. Section 62(1) of the Act of 2010 is amended by the insertion of the following paragraph after paragraph (a): “(aa) the Legal Services Regulatory Authority;”.

Defence 33. The Act of 2010 is amended by the insertion of the following section after section 107: “107A. It shall be a defence in proceedings for an offence under this Part for the person charged with the offence to prove that the person took all reasonable steps to avoid the commission of the offence.”.

Obligation for certain designated persons to register with Central Bank of Ireland 34. The Act of 2010 is amended by the insertion of the following section after section 108: “108A. (1) Subject to subsection (2), a person who is a designated person pursuant to paragraph (a) of the definition of ‘financial institution’ in section 24(1) and section 25(1)(b), or who carries on the business of a cheque cashing office, shall register with the Bank.

Managers and beneficial owners of private members’ clubs - certificates of fitness 35. The Act of 2010 is amended by the insertion of the following sections after section 109: “Managers and beneficial owners of private members’ clubs to hold certificates of fitness 109A. (1) An individual who— (a) effectively directs a private members’ club at which gambling activities are carried on, or (b) is a beneficial owner of a private members’ club at which gambling activities are carried on, shall hold a certificate of fitness and probity (referred to in this section and sections 109B, 109C, 109D and 109E as a ‘certificate of fitness’) granted by a Superintendent of the Garda Síochána or, as the case may be, by the Minister.

Application for certificate of fitness 109B. (1) Upon compliance with subsection (2), an individual shall make an application for a certificate of fitness— (a) where the individual ordinarily resides in the State— (i) to the Superintendent of the Garda Síochána for the district in which he or she ordinarily resides, or (ii) to the Superintendent of the Garda Síochána for the district in which the private members’ club concerned is located or is proposed to be located, or (b) where the individual ordinarily resides outside the State, to the Minister.

Grounds of refusal to grant certificate of fitness 109C. (1) A Superintendent of the Garda Síochána or, as the case may be, the Minister shall not refuse an application for a certificate of fitness made in accordance with section 109B unless— (a) a relevant consideration exists, or (b) he or she is not satisfied that the applicant has provided such information as he or she reasonably requires for the purposes of determining whether a relevant consideration exists.

Duration of certificate of fitness 109D. (1) A certificate of fitness shall remain in force until the expiration of 3 years after the date on which the certificate was issued.

Appeal where application for certificate of fitness is refused 109E. (1) If a Superintendent of the Garda Síochána, or as the case may be, the Minister refuses an application for a certificate of fitness, he or she shall, on the request in writing of the applicant made not later than 14 days after the refusal, give the applicant a statement in writing of the reasons for the refusal.

Prescribed amounts under section 33AQ of Central Bank Act 1942 in respect of certain contraventions 36. The Act of 2010 is amended by the insertion of the following section after section 114: “114A. (1) In this section ‘Act of 1942’ means the Central Bank Act 1942 and ‘designated person’ means a designated person within the meaning of Part 4.

Amendment of Schedule 2 to Act of 2010 37. The Act of 2010 is amended by the substitution of the following Schedule for Schedule 2: “SCHEDULE 2

Section 24

Annex I to Directive 2013/36/EU of the European Parliament and of the Council of 26 June 201313 on Access to the Activity of Credit Institutions and the Prudential Supervision of Credit Institutions and Investment Firms, Amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC LIST OF ACTIVITIES SUBJECT TO MUTUAL RECOGNITION 1. Taking deposits and other repayable funds.

The services and activities provided for in Sections A and B of Annex I to Directive 2004/39/EC of the European Parliament and of the Council of 21 April 200415 on markets in financial instruments, when referring to the financial instruments provided for in Section C of Annex I of that Directive, are subject to mutual recognition in accordance with Directive 2013/36/EU of the European Parliament and of the Council of 26 June 201316 ”.

List of factors which suggest potentially lower risk 38. The Act of 2010 is amended by the insertion of the following Schedule after Schedule 2: “SCHEDULE 3 Section 34A Non-exhaustive list of factors suggesting potentially lower risk

List of factors which suggest potentially higher risk 39. The Act of 2010 is amended by the insertion of the following schedule after Schedule 3 (inserted by section 38 ): “SCHEDULE 4

Section 39

Non-exhaustive list of factors suggesting potentially higher risk

Repeals 40. The following are repealed: (a) section 5 of the Act of 2013; (b) sections 31, 32, 34, 36, 43 and 107 of the Act of 2010.

PART 3

Consequential Amendments Consequential amendments 41. (1) The Investor Compensation Act 1998 is amended— (a) in section 30(1), in paragraph (vi) (amended by section 120(2) of the Act of 2010) of the definition of “net loss”, and (b) in section 35(3)(c) (amended by section 120(3) of the Act of 2010), by the substitution of “Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 201517 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC” for “Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing”.

1 OJ No. L 141, 5.6.2015, p. 73 2 OJ No. L 141, 5.6.2015, p. 73 3 OJ No. L 176, 27.6.2013 p. 1 4 OJ No. L 302, 17.11.2009, p. 32 5 OJ No. L 302, 18.11.2010, p. 1 6 OJ No. L 182, 29.6.2013, p. 19 7 OJ No. L 141, 5.6.2015, p. 1 8 OJ No. L 173, 12.6.2014, p. 349 9 OJ No. L 173, 12.6.2014, p. 1 10 OJ No. L 345, 31.12.2003, p. 64 11 OJ No. L 390, 31.12.2004, p. 38 12 OJ No. L 182, 29.6.2013, p. 19 13 OJ No. L 176, 27.6.2013, p. 338 14 OJ No. L 319, 5.12.2007, p. 1 15 OJ No. L 145, 30.4.2004, p. 1 16 OJ No. L 176, 27.6.2013, p. 338 17 OJ No. L 141, 5.6.2015, p. 7 18 OJ No. L 141, 5.6.2015, p. 73 Privacy Statement Accessibility European Legislation Identifier (PDF) Open Data License Ráiteas Príobháideachais Inrochtaineacht Aitheantóir Eorpach Reachtaíochta (ELI) Ceadúnas Sonraí Oscailte Liosta Fianán © Government of Ireland. Oireachtas Copyright Material is reproduced with the permission of the Houses of the Oireachtas © Rialtas na hÉireann. Atáirgtear ábhar faoi Chóipcheart le cead ó Thithe an Oireachtais