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Heads of new AML Bill published
By Ken Owens, Ailish Custerson & Suzanne Senior, PwC
Aug 28, 2012

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The Department of Finance has published the draft heads of a new Bill in the area of anti money laundering – the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2012 (the “Bill”). The Bill has been produced to clarify certain aspects of the 2010 Act. The Bill will include but is not limited to the following amendments;
  • Section 31 of the 2010 Act will be amended so designations by the Minister for Justice nominating jurisdictions as being equivalent cannot be relied upon by a designated person unless the firm has carried out its own assessment of the risks of money laundering in the jurisdiction which seems to obviate the benefit of a Section 31 designation in the first place.
  • Section 34 & 36 which provide for simplified due diligence in the case of a specified customer (typically other financial institutions) or specified product (typically low – value, low- risk financial products) are to be amended by the widening to also include instance where the firm has taken steps to determine if it is dealing with a specified product or customer (but presumably hasn’t received a definitive answer or is incorrect in its assessment).
  • Section 35 is to be amended to clarify that firms must monitor source of wealth and source of funds rather than one or the other.
  • Section 54 will be amended to specifically include the keeping up to date of documents obtained for due diligence purposes and the future proofing of procedures to accommodate new technological developments. This section is also to be amended to specifically provide for a named senior member of management, such as a compliance officer or MLRO, responsible for relevant AML policies and procedures. This is effectively the pre-approval control function set out in the Fit & Proper regime as PCF-15.
  • Section 55 is to be amended to drop the insistence that records be physically kept in the State. It is proposed to modify the definitions of designated person in the 2010 Act so that unregulated subsidiaries of financial institutions such as nominee companies can be treated as designated persons and so qualify to be treated as specified customers liable only to simplified due diligence.
  • Section 71 is to be amended to enable the State Competent Authority to give positive directions to do something as well as negative ‘cease & desist’ type directions. Failure to comply may be considered by the courts to be aggravating factors.
On 10 February 2012 the Department of Finance issued a set of Anti-Money Laundering guidelines (the Core Guidelines) which designated persons can look to when developing policies and procedures to fulfil their obligations under the Criminal Justice (Money Laundering and Terrorist Financing Act) 2010 (the Act).

These guidelines may need to be amended for specific sectors. The Irish Funds Industry Association (IFIA) has set about the task of developing a set of sectoral guidance notes for the funds industry.

Ken Owens
+353 1 792 8542

Ailish Custerson
+353 1 792 7109

Suzanne Senior
+ 353 1 7328547

One Spencer Dock,
North Wall Quay,
Dublin 1.
t: +353 1 7926000
f: +353 1 7926200

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