Tackling Corruption and Money Laundering - Legislative Update
In November 2017, Government announced its White Collar Crime Package, which confirmed Ireland’s commitment to continuing its efforts to tackle corruption and money laundering. The measures identified by Government to achieve these objectives included:
- responding to the recommended actions of the Financial Action Task Force (FATF) Report on Ireland’s Anti Money Laundering and Countering the Financing of Terrorism framework;
- transposing the 4AMLD;
- establishing registers of beneficial ownership for companies, Industrial and Provident Societies, trusts and Irish Collective Asset-management Vehicles (ICAVs); and
- publishing and enacting the Criminal Justice (Corruption Offences) Bill.
We are now seeing much progress in the efforts by Government to deliver on these objectives.
FATF Report and transposition of the 4AMLD
On 24 April 2018 the Cabinet approved Minister Flanagan’s proposed legislation to tackle money laundering and terrorist financing. The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018 was subsequently published in May 2018. This bill proposes to enact into Irish law most of the provisions of the 4th Anti-Money Laundering Directive (4AMLD) and to amend the existing legislation in this area.
The commitment of Government to address both its response to the recommended actions of FATF and the transposition of the 4AMLD was confirmed in its press release relating to the approval by Cabinet of the Bill. While the Bill does not transpose all of the required provisions of the 4AMLD, it transposes most of them.
Therefore, once the Bill is law in Ireland, it will:
- impose increased obligations on a range of bodies, including financial institutions, lawyers and accountants, in assessing the risks of money laundering and terrorist financing involved in carrying out their businesses; and
- increase the functions and powers of the Financial Intelligence Unit of the Garda Síochána so as to expand its remit and provide for enhanced international cooperation.
Registers of beneficial ownership
Absent from the Bill, however, is one key aspect of 4AMLD, being the establishment by Ireland of central registers of beneficial ownership.
It is presently the law in Ireland that non-listed companies and other legal entities incorporated here must take all reasonable steps to hold adequate, accurate and current information on their beneficial ownership and keep this information in their own companies’ beneficial ownership register. The intention behind the establishment of central registers would be to require these companies to make this information available on a central repository that would be available at a minimum to certain member state authorities and possibly beyond that to the public generally.
The press release issued by Government did advise that the part of the 4AMLD dealing with central registers would be separately transposed. It is also understood that, due to on-going negotiations at EU level on a 5th Anti-Money Laundering Directive (5AMLD) which seeks to secure a harmonised approach across the EU as to who can access central registers of beneficial ownership, it was decided that a determination as to the levels of public access to the Irish central registers would be made once a decision had been reached at EU level.
This month, the 5AMLD was agreed at EU level. This means that when the 5AMLD becomes law in Ireland, any member of the general public will have access to the information on the central registers of beneficial ownership.
Criminal Justice (Corruption Offences) Bill
On 30 May 2018 it was announced that both Houses of the Oireachtas has passed the Criminal Justice (Corruption Offences) Bill 2017.
This Bill completely modernises Ireland’s anti-corruption laws. Once enacted, the Bill will introduce new penalties and new offences and it will extend the criminal liability of companies such that a body corporate will, in certain circumstances presumed to be guilty of an offence where certain representatives of the body corporate engage in corrupt activities on its behalf.
Claire Lord, Partner & Head of Corporate Governance & Compliance, Mason Hayes & Curran
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