Joe Beashel, partner: "On 23 April 2021, the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 ("2021 Act") was commenced. The 2021 Act amends the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 ("2010 Act") and transposes the Fifth Money Laundering Directive - Directive (EU) 2018/843 ("5MLD") into Irish Law.
| Key Changes introduced by the 2021 Act |
| Bringing certain dealers and intermediaries in the art trade within the scope of the regime |
| Creating a robust regulatory framework for new technologies, new products and new practices, as identified by FATF |
| Creating of a centralised national bank and payment account registers |
| Enhancing customer due diligence requirements |
| Establishment of beneficial ownership registers |
| Providing guidance on "prominent public functions" |
| Improving the safeguards for financial transactions to and from high-risk third countries |
| Setting new limits on the use of anonymous pre-paid cards and preventing credit and financial institutions from creating anonymous safe-deposit boxes |
| Regulating Virtual Asset Service Providers ("VASPs") (for more detail on this please see article on the next page) |
A detailed summary of the key changes introduced by the 5MLD for
both our existing and newly impacted clients can be found in our
client resource, The
Matheson AML Toolkit, along with an updated consolidation of
the 2010 Act.
As part of our efforts to assist clients in preparing for the implementation of the 5MLD we also hosted a webinar entitled "AML - what's changed - what's proposed?" on 30 March 2021 in which we discussed recent and forth coming developments in AML. We were delighted to also be joined by Tommy Hannafin, Head of the Anti-Money Laundering Division at the Central Bank who provided great insight into the regulator's perspective, particularly in respect of the AML proposals at a European level.
During the discussion a question was posed to Mr Hannafin around any possible amendment to the Central Bank's Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector ("AML/ CFT Guidelines"). At the time he confirmed, that if amendments were necessary, revised AML/CFT Guidelines would be issued in due course. This occured recently on 23 June 2021. This is the first revision of the AML/ CFT Guidelines since they were first launched in September 2019 (see Matheson's AML Toolkit for a detailed note on the genesis of the original AML/CFT Guidelines). While there are several drafting changes made throughout the AML/CFT Guidelines to ensure consistency with the recently transposed 5th Money Laundering Directive, of particular note are the inclusions of sections 6.3 and 6.4 under the heading of Governance.
In these sections the Central Bank clarifies its regulatory expectations around firms having a dedicated member of senior management, board member and compliance officer responsible for AML matters. For many firms this will not require significant change, but for others (particularly those firms with small employee headcounts - such as Schedule 2 firms which often have no direct employees and instead rely on third party service providers) specific actions may be required to ensure compliance with this new regulatory guidance. The inclusion of these sections reinforces the need for firms to have well developed internal governance structures to ensure they can properly comply with their AML / CFT obligations. Firms can expect the Central Bank to look for evidence of compliance with these amendments, as part of their supervisory engagements with firms in the months ahead.
Sixth Money Laundering Directive
A number of queries were raised during the webinar in respect of the Sixth Money Laundering Directive (EU) 2018 / 1673 ("6MLD"), which was to be transposed by 3 December 2020. It is important to note that, in accordance with Recital 23 of the 6MLD, Ireland is "not taking part in the adoption of this Directive and not bound by it or subject to its application". This is due to the 6MLD having been adopted under Article 83 of Treaty on the Functioning of the EU ("TFEU"). Article 83 falls into Title V of the TFEU which deals with home and justice affairs. Under Protocol 21 of the TFEU, Ireland has opted out of all laws made under Title V and for this reason, Ireland is not obliged to transpose the 6MLD into national law. However, it is Matheson's view that the national law in place is equivalent if not more comprehensive than what is in the 6MLD."
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.
