On 31 January 2013, the Department of Finance published the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2013 (“the Bill”) proposing changes to the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“the Act”). The primary purpose of the Bill is to align certain provisions of the 2010 Act more closely with international standards and to amend certain provisions to reflect operational requirements.

Proposed Amendments

The proposed Amendments to the Act are as follows:

The definition of an “occasional transaction” is to be amended so that wire transfers of funds of €1,000 or more are included in the acts. Customer Due Diligence (CDD) measures will also apply to beneficial owners of such funds.

The identification threshold for Private Members Gaming Clubs is to be reduced from €15,000 to €2,000. This will apply to the amount of money paid to the gaming club by the customer or paid to the customer by the gaming club.

Section 34 of the Act which provides for Simplified CDD in the case of a specified customer or specified product is to be amended to set out that it applies where the designated person is satisfied that the customer or product is a specified customer or product ‘having taken such measures as are necessary’ to establish that they are.  A designated person will be required to take the necessary measures to establish and satisfy itself that a customer or product is a specified customer or product.

Section 37 is to be amended to set out that enhanced CDD measures are to be applied not only to existing Politically Exposed Persons (PEPs) but to existing customers that subsequently become PEPs. This will include those who become immediate family members or close associates of PEPs. Enhanced on-going monitoring must also be applied to business relationships with PEPs. It will also be made clear that senior management approval must be obtained before a business relationship is continued with an existing customer who becomes PEP. The Bill emphasises that the designated person shall determine source of funds and wealth for transactions with customers that are PEPs or for services sought by PEPs. This would also include any occasional transactions.

Section 39 is to be amended to include a mandatory requirement to apply additional CDD measures where the designated person has reasonable grounds to believe that there is a higher risk of ML or TF. Currently the 2010 Act states that a designated person ‘may apply’ additional CDD measures if there is a higher risk. This amendment is in line with international standards.

Section 54 is to be amended to specifically include requirements for the following in a designated person’s policies and procedures:

• Measures to be taken to keep documents and information obtained for due diligence purposes up to date

• Additional measures to be taken where there is a higher risk of M or TF in respect of a customer, beneficial owner, service, product or transaction

• Measures to be taken to prevent risk of ML or TF which may arise from technological developments (future proofing procedures) including:

o Use of new products and new practices and ways in which services relating to such developments are delivered

o New ways of harvesting CDD documentation

Section 71 is to be amended to enable the State Competent Authority (Central Bank or Department of Justice) to give positive directions to do something as well as negative directions. This may include issuing written directions to a designated person to take specific actions or establish specific processes or procedures the State Competent Authority considers reasonable necessary to comply with the Act. Failure to comply with these directions may be considered by the courts to be an aggravating factor in determining sentencing for an offence.

For a copy of the Bill click here