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From Accountingnet.ie Law & Regulation
Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 On 5th May 2010, the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 (the Act”) was signed into law in the Republic of Ireland. The Act transposed the Third Money Laundering Directive and consolidated all existing anti-money laundering legislation (Criminal Justice Act 1994) into one single act. The Department of Justice & Law Reform has confirmed that the commencement orders will be signed on 15 July 2010 except for the section on Trust & Corporate Service Providers. This gives designated persons, as defined in the Act, a short amount of time to comply with the new requirements. Changes to previous legislation Although many of the features of the existing legislation have been retained there are a number of new and important changes. These include the introduction of a risk-based approach to customer due diligence and what will be a more rigorous enforcement regime involving the Minister for Justice and Law Reform, the Central Bank & Financial Regulator. The legislation refers to not only money laundering but also terrorist financing. The key features of the Act include:-
Designated Person The Act defines a designated person as any person acting in the State in the course of business carried on by the person in the State who or that is-
Customer Due Diligence (CDD) The Act contains complex provisions on customer due diligence covering simplified, standard and enhanced due diligence. The Act specifies that customer due diligence should be carried out “prior to” the occurrence of the following circumstances:-
In order to complete CDD, the designated person must complete the following:-
Nothing in the section limits the kinds of documents or information that a designated person may have reasonable grounds to believe can be relied upon to confirm the identity of a customer. Trust or Corporate Service Providers (Sec 84-109) The Act provides that any person carrying out the business of a trust or company service provider (“TCSP”) will be required to obtain an authorization to carry on business as a TCSP issued by the Minister and will be classed as designated person under the Act. A TCSP means any person whose business it is to provide any of the following:- (a) forming companies or other bodies corporate; (b) acting as a director or secretary of a company under an arrangement with a person other than the company; (c) arranging for another person to act as a director or secretary of a company; (d) acting, or arranging for a person to act, as a partner of a partnership; (e) providing a registered office, business address, correspondence or administrative address or other related services for a body corporate or partnership; (f) acting, or arranging for another person to act, as a trustee of a trust (g) acting, or arranging for another person to act, as a nominee shareholder for a person other than a company whose securities are listed on a regulated market. A TCSP does not include any of the following:-
This requirement for authorisation will apply from 15 July, 2010 and TSCP’s are required to submit their application for authorisation to the Minister for Justice & Law Reform by the 15 July, 2010. It is important to note that a person who carries on business as a "trust or company service provider" without having first obtained the required authorisation will commit an offence under subsection 87. 1 (1) of the Act will be liable (a) on summary conviction, to a fine not exceeding €5,000, or imprisonment for a term not exceeding 12 months (or both), or (b) on conviction on indictment, to a fine or imprisonment not exceeding 5 years (or both). The Anti-Money Laundering Compliance Unit in the Department of Justice & Law Reform will process all applications for authorisation to carry on business as a trust or company service provider and each authorisation will have a term of validity of 3 years and will be renewable. Included in this process is a requirement for the application of a fit and proper test to certain persons associated with each application for authorisation. The legislation specifies certain matters which would disqualify a person from being considered ‘‘a fit and proper person’’ for the purposes of an authorisation. In summary, these include having certain criminal convictions, refusing due payment of debt, being an undischarged bankrupt or otherwise not being a fit and proper person. The "fit and proper" test may require the Department to conduct enquiries relating to the applicant including checks against criminal convictions with An Garda Síochána, checks against financial rulings e.g. Bankruptcy and/or company law breaches. Conclusion The change of focus to a risk based approach will provide a challenge to all Company Secretaries who work in or advise “designated persons” to ensure they have sufficient internal policies and procedures to identify the risks facing the organization and to identify money laundering and terrorist financing. Trust and Corporate Services Provides should act immediately and submit their application forms to the Department of Justice & Law Reform before 15 July 2010 for authorization to act as a TCSP. All designated persons should consult the guidance documentation issued and approved by the Department of Justice & Law Reform.
Conor Sweeney is joint Vice-President of the Irish Region Council of the Institute of Chartered Secretaries and Administrators and Director of OmniPro Corporate Consultants and he can be contacted on +353 59 9183888 or csweeney@omnipro.ie Conor will be covering the provisions of the Act at the Institute of Chartered Secretaries and Administrators in Ireland Annual Conference on 15th September 2010. Visit www.omnipro.ie for further information. OmniPro Corporate Consultants - OmniPro Education & Training - © Copyright 2005 by Accountingnet.ie |
