Guidance Notes Published but not Approved
Irish anti-money laundering legislation is set out in the
Criminal Justice (Money Laundering and Terrorist Financing) Act
2010, (the "Act") which was enacted on
15 July 2010. It implements the EU's Third Anti-Money
Laundering Directive (2005/60/EC).
In addition to the Act, a set of guidance notes was prepared by a
Government body called the Money Laundering Steering Committee.
These guidance notes are contained in a set of so called
"Core" Guidance Notes which have been published by the
Department of Finance.
Specific sets of industry specific guidance notes were also been
drafted but have not been published in final form.
Section 107(3) of the Act provided for the guidance notes to be
approved by the Minister for Justice in consultation with the
Minister for Finance. Section 107(3) stated that a court could have
regard to the and guidelines issued by the Minister for Justice in
determining whether the a designated person took reasonable steps
and due diligence to comply with the Act.
Neither the Guidance Notes which have been published nor the draft
sectoral guidance notes have been approved by the Minister for
Finance under s107(3) of the Act. MOP understands that there are no
plans to approve the guidance notes at a future date, as provided
under Section 107 of the Act. It is thought that the approval of
the Guidance Notes could have potentially weakened prosecution
cases which may be taken under the Act and for this reason they
will not be approved.
Whilst the Guidance Notes published by the Department of Finance
are a useful tool for the financial services industry it is
regrettable that they have not been given the approval provided for
in Section 107 of the Act and that a court will not necessarily
have regard to them as it would have under Section 107(3) of the
Act had they been approved.
Commission plans amendments to 3rd Anti-Money Laundering Directive
The European Commission is planning amendments to the 3rd Anti-Money Laundering Directive (2005/60/EC) (the "Directive") for the purpose of implementing the new standards adopted by the Financial Action Task Force (FATF). The Directive was implemented in Ireland by the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.
The new FATF standards are aimed at strengthening global safeguards and protecting the integrity of the financial system against money laundering and terrorist financing. The main changes in the new standards are:
- Combating the financing of the proliferation of weapons of mass destruction through the consistent implementation of targeted financial sanctions when these are called for by the UN Security Council;
- Improved transparency to make it harder for criminals and terrorists to conceal their identities or hide their assets behind legal persons and arrangements;
- Stronger requirements when dealing with politically exposed persons (PEPs);
- Expanding the scope of money laundering predicate offences by including tax crimes;
- An enhanced risk-based approach which enables countries and the private sector to apply their resources more efficiently by focusing on higher risk areas;
- More effective international cooperation including exchange of information between relevant authorities, conduct of joint investigations, and tracing, freezing and confiscation of illegal assets; and
- Better operational tools and a wider range of techniques and powers, both for the financial intelligence units, and for law enforcement to investigate and prosecute money laundering and terrorist financing.
The Commission is a full member of FATF and has been involved in
the development of these new FATF standards. FATF has set the end
of 2013 as the deadline within which it expects implementation of
the new standards.
For the purpose of implementing the new standards the Commission
has launched a review of the Directive. This includes the
publication of an external application study and targeted
consultations with private stakeholders and Member States. At the
end of March 2012 the Commission aims to publish a report on the
application of the Directive which will be followed by and impact
assessment and accompanying amending legislation. The Commission
intends to adopt a legislative proposal by the end of 2012 and it
will not become law in Ireland until some time after that.
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.
