KENNY WELCOMES ADDITIONAL MONEY LAUNDERING PROVISIONS

Posted on April 18, 2013 4:20 PM   |   Permanent Link   

This is an important piece of legislation. I am happy that it is before the House and I am pleased to support it.

The original Criminal Justice (Money Laundering and Terrorist Financing) Act was enacted in July 2010. This Act transposes the EU Third Anti Money Laundering Directive into Irish law, and requires firms and persons subject to its provisions (referred to as designated persons) to apply Customer Due Diligence measures.

This is intended to apply to businesses and banks where large transactions occur - the lowered financial limits around private gambling houses are to prevent such places from becoming places where money laundering of criminal proceeds, or even the financing of terrorism could be taking place. This is particularly welcome as I recall that during the Mahon and Flood Tribunal hearings it was discovered that some of the gentlemen who were required to give evidence to the tribunal had dealings with, or were connected to, gambling houses including the infamous "one arm bandit" casinos in Dublin city.

The amendment is focussed on implementing the Customer Due Diligence measures that the EU Directive specifies.

The EU Third Anti Money Laundering Directive states that Customer Due Diligence shall comprise of identifying the customer on the basis of documents, data or information obtained from a reliable and independent source as well as identifying the beneficial owner and taking adequate measures to understand the ownership and control structure of the customer.

It also comprises the obtaining of information about the business relationship involved in the transaction and conducting ongoing monitoring of the business relationship, including ensuring that the transactions being conducted are consistent with the knowledge of the customer, the business and risk profile, including, where necessary, the source of funds and ensuring that documents, data or information held are kept up-to-date.

There are different levels of Customer Due Diligence that can be applied.

A designated person does not have to identify information on the purpose or intended nature of the business relationship of a customer, or the beneficial owner of a customer, where the customer is considered to present a low risk of money laundering or terrorist financing.

However, the designated person must obtain sufficient information about the customer to satisfy itself that the customer meets the criteria for this Simplified Customer Due Diligence to be applied.

In situations that present a higher risk of money-laundering or terrorist financing, designated persons are obliged to undertake Customer Due Diligence measures above and beyond normal measures - this is Enhanced Customer Due Diligence.

The extent of additional information sought, and of any monitoring carried out in respect of any particular customer, will depend on the money laundering or terrorist financing risk that the customer is assessed to present to the designated person.

The EU Third Anti Money Laundering Directive prescribes three specific circumstances when Enhanced Customer Due Diligence measures must be applied. One of these elements is where the customer has not been physically present for identification purposes and a further aspect is in respect of a correspondent banking relationship;

I think it is worth noting that the Enhanced Customer Due Diligence measures also apply to elected representatives, or politically exposed persons in the context of business relationships or occasional transactions. Again I would refer to the Mahon Tribunal findings which uncovered clear evidence of corruption by public representatives in the Dublin County planning process. This is dealt with in part C of the Enhanced Customer Due Diligence provisions of the Directive, which is also seeking to prevent political support for terrorism in the parliaments of EU Member States. I see this as a positive development, particularly in the context of terrorism, which is very often politically motivated. Elected representatives must be open to scrutiny in this regard and this is covered.

I welcome the Directive, and this legislation which supports it, and I commend it to the House.