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Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018
PRACTICE AREA GROUP: Corporate
On 26 November 2018 the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 ( the “2018 Act”) was commenced, transposing the Fourth Anti- Money Laundering Directive (“4AMLD”) into Irish law. It should be noted that Article 30 (1) of 4 AMLD, dealing with the requirement on a body corporate or other legal entity to maintain its own register ( “Local Register”) of beneficial owners, was already transposed into Irish law by the European Union (Anti- Money Laundering : Beneficial Ownership of Corporate Entities) Regulations 2016.
The EU has some other major anti- money laundering initiatives underway which will have an impact on Irish law in the near future. The Fifth Anti-Money Laundering Directive (“5AMLD”) must be transposed into Irish law by 10 January 2020 and the Sixth Anti-Money Laundering Directive (“6AMLD”) must be transposed into Irish law by 3 December 2020.
In the meantime some key points should be noted in respect of the 2018 Act as follows:
- It gives effect to 4AMLD;
- It amends the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and the Criminal Justice Act 2013;
- Designated persons must carry out business risk assessments as part of their customer care due diligence and must monitor business relationships in a more comprehensive manner;
- It expands the definition of politically exposed persons (“PEPs”) to include individuals residing in the State;
- It expands the definition of those persons considered to be beneficial owners of bodies corporate, partnerships and trusts; and
- Certain financial institutions who are not otherwise registered with the Central Bank of Ireland are now obliged to register with the Central Bank to enable it to identify the persons whom it is responsible for supervising for AML purposes.
As a final note, it is worth mentioning that the ongoing process of anti-money laundering regulation contemplates the creation of a central beneficial ownership register ( the “Central Register”) in each Member State. While the Act transposes the bulk of 4AMLD, some aspects remain to be finalised. Originally, under 4AMLD, it was contemplated that this register could be inspected by those with a legitimate interest with respect to money laundering, terrorist financing and associated offences. Ireland has not yet taken the step relating to the establishment of the Central Register but as it happens, given the terms of 5 AMLD, such Central Register will, in effect widen the inspection net to the public in most cases. The Central Register will be operated by the Companies Registration Office, which has already indicated what the prescribed filing form will look like but Ireland still awaits secondary legislation to formally establish the Central Register. This will give clarity on the timeframe for first filings to be made and indeed the date from which public access will be granted. It is worth noting that once the secondary legislation is in place the Companies Registration Office should have 3 months to formally set the Central Register up. Companies and other legal entities are expected to then have a further 6 month period to file their beneficial ownership information. Public access would only be available after this grace period. Accordingly, it will be some time before the Central Register directly impacts entities.
If you have any queries on this please get in touch with Ursula McMahon or your usual Matheson Corporate contact.