This Briefing Note outlines the impact of Part IV of the Criminal Justice Act, 1994 ("the Act") and of a series of Guidance Notes issued to credit institutions, other financial institutions, life assurance companies and intermediaries and stockbrokers to facilitate the implementation of the Act ("the Notes"). The Act makes money laundering a criminal offence and with a view to preventing money laundering imposes duties on banks and other credit and financial institutions, as well as on stockbrokers, money brokers, life assurance companies, insurance brokers and agents and others providing services in relation to buying and selling shares and other securities. The relevant provisions of the Act were brought into force with effect from 21st October 1994 and 2nd May, 1995 and, subsequently, by the expansion of the application of the Act to other institutions and services. The practical aspects of the Act have been considered in the Notes. For further information contact James Dudley or Ken Casey.
OVERVIEW
PART IV OF THE ACT makes money laundering a criminal offence and imposes an obligation on certain financial and other institutions, as set out in "Application of the Act" below:-
- to take reasonable care to establish the identify of their account-holders;
- to maintain records;
- to put internal controls in place; and
- to report any suspicious transactions to the Gardai.
Part IV requires financial institutions to introduce identification procedures for their customers and for anyone undertaking large suspicious transactions, to maintain adequate records of customer identification and of transactions for at least five years after termination of the customer relationship or execution of the transactions, to establish procedures to allow reporting of suspicious transactions and to train employees accordingly.
The Money Laundering Steering Committee, established by the Department of Finance to oversee the issue of guidelines to facilitate the implementation of (1) the Act, (2) the EU Council Directive (91/308/EEC) on prevention of the use of the financial system for the purpose of money laundering and (3) the Forty Recommendations of the Financial Action Task Force, an OECD sponsored body set up to counteract money laundering on a global basis, approved the issue of the Notes for different categories of persons subject to the provisions of the Act. The Notes supplement the Act, provide an explanation of the relevant provisions of the Act and introduce high standards of compliance. Although the Notes do not constitute a legal interpretation of the Act they provide recommendations as to good practice, including good industry practice on measures to be taken to establish identity (by elaboration of the Act's requirement to take reasonable measures to establish the identity of a person for whom it is proposed to provide services).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
