Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021

1. Definitions

1. In this Act—

“Act of 2010” means the >Criminal Justice (Money Laundering and Terrorist Financing) Act 2010;

“Act of 2018” means the >Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018;

“Regulations of 2019” means the European Union (Money Laundering and Terrorist Financing) Regulations 2019 (>S.I. No. 578 of 2019).

2. Amendment of section 2 of Act of 2010

2. Section 2 (amended by section 3 of the Act of 2018) of the Act of 2010 is amended—

(a) in subsection (1), by the insertion of the following definition before the definition of “Minister”:

“ ‘Fifth Money Laundering Directive’ means Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018[^1] amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU;”,

and

(b) by the insertion of the following subsection after subsection (2):

“(3) In this Act a reference to an Appeal Tribunal shall be construed as a reference to the Appeal Tribunal established under section 101A (inserted by section 24 of theCriminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021).”.

3. Amendment of section 3 of Act of 2010

3. Section 3 of the Act of 2010 is amended—

(a) in subsection (1), by the insertion, after “Act”, of “(other than section 106ZC (inserted by the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021))”, and

(b) in subsection (2), by the insertion, after “Minister”, of “(or, in the case of regulations under section 106ZC, the Minister for Finance)”.

4. Amendment of section 24 of Act of 2010

4. Section 24 (amended by section 4 of the Act of 2018) of the Act of 2010 is amended, in subsection (1)—

(a) in the definition of “financial institution”—

(i) in subparagraph (iii) of paragraph (g), by the substitution of “if section 2(6) of that Act did not apply,” for “if section 2(6) of that Act did not apply;”, and

(ii) by the insertion of the following paragraph after paragraph (g):

“(h) a virtual asset service provider;”,

(b) by the substitution of the following definition for the definition of “property service provider”:

“(c)‘property service provider’ means a person who provides a property service within the meaning of the >Property Services (Regulation) Act 2011;”,

and

(c) by the insertion of the following definitions:

“ ‘custodian wallet provider’ means an entity that provides services to safeguard private cryptographic keys on behalf of its customers, to hold, store and transfer virtual currencies;

‘Electronic Identification Regulation’ means Regulation (EU) No. 910/2014 of the European Parliament and of the Council of 23 July 2014[^2] on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC;

‘virtual asset’ means a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes but does not include digital representations of fiat currencies, securities or other financial assets;

‘virtual asset service provider’ means a person who by way of business carries out one or more of the following activities for, or on behalf of, another person:

(a) exchange between virtual assets and fiat currencies;

(b) exchange between one or more forms of virtual assets;

(c) transfer of virtual assets, that is to say, conduct a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another;

(d) custodian wallet provider;

(e) participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset or both;

but does not include a designated person that is not a financial or credit institution and that provides virtual asset services in an incidental manner and is subject to supervision by a national competent authority, other than the Bank;”.

5. Amendment of section 25 of Act of 2010

5. Section 25 (amended by section 5 of the Act of 2018) of the Act of 2010 is amended in subsection (1)—

(a) in paragraph (c), by the substitution of “, tax adviser or any other person whose principal business or professional activity is to provide, directly or by means of other persons to which that other person is related, material aid, assistance or advice on tax matters” for “or tax adviser”,

(b) by the substitution of the following paragraph for paragraph (f):

“(f) a property service provider including a property service provider acting as an intermediary in the letting of immovable property, but only in respect of transactions for which the monthly rent amounts to a total of at least €10,000,”,

(c) in paragraph (i), by the deletion of “or” where it lastly occurs, and

(d) by the insertion of the following paragraphs after paragraph (i):

“(ia) a virtual asset service provider,

(ib) a person trading or acting as an intermediary in the trade of works of art (including when carried out by an art gallery or an auction house) but only in respect of transactions of a total value of at least €10,000 (whether in one transaction or in a series of transactions that are or appear to be linked to each other),

(ic) a person storing, trading or acting as an intermediary in the trade of works of art when this is carried out in a free port but only in respect of transactions of a total value of at least €10,000 (whether in one transaction or as a series of transactions that are or appear to be linked to each other), or”.

6. Amendment of section 33 of Act of 2010

6. Section 33 (amended by section 11 of the Act of 2018) of the Act of 2010 is amended—

(a) in subsection (1)—

(i) in paragraph (e), by the substitution of “application, or” for “application.”, and

(ii) by the insertion of the following paragraph after paragraph (e):

“(f) at any time where the designated person is obliged by virtue of any enactment or rule of law, including the European Union (Administrative Cooperation in the Field of Taxation) Regulations 2012 (>S.I. No. 549 of 2012), to contact a customer for the purposes of reviewing any relevant information relating to the beneficial owner connected with the customer.”,

and

(b) in subsection (2)—

(i) in paragraph (a)—

(I) in subparagraph (i), by the deletion of “or” where it lastly occurs, and

(II) by the insertion of the following subparagraph after subparagraph (i):

“(ia) information from relevant trust services as specified in the Electronic Identification Regulation, or”,

and

(ii) in paragraph (b)—

(I) in subparagraph (i), by the deletion of “and”,

(II) in subparagraph (ii), by the substitution of “concerned, and” for “concerned.”, and

(III) by the insertion of the following subparagraph after subparagraph (ii):

“(iii) where the beneficial owner is the senior managing official referred to in Article 3(6)(a)(ii) of the Fourth Money Laundering Directive, a designated person shall take the necessary measures to verify the identity of that person and shall keep records of the actions taken to verify the person’s identity including any difficulties encountered in the verification process.”.

7. Amendment of section 33A of Act of 2010

7. Section 33A (inserted by section 12 of the Act of 2018) of the Act of 2010 is amended—

(a) in subsection (1)—

(i) in subparagraph (ii) of paragraph (a), by the substitution of “€150” for “€250”,

(ii) by the substitution of the following paragraph for paragraph (b):

“(b) the monetary value that may be stored electronically on the payment instrument concerned does not exceed €150,”,

(iii) in paragraph (e), by the deletion of “and”,

(iv) in paragraph (f), by the substitution of “€50, and” for “€100.”, and

(v) by the insertion of the following paragraph after paragraph (f):

“(g) the transaction concerned is not a remote payment transaction (within the meaning of Article 4 of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015[^3] on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No. 1093/2010, and repealing Directive 2007/64/EC) of an amount exceeding €50.”,

and

(b) by the insertion of the following subsections after subsection (2):

“(3) A credit institution or financial institution acting as an acquirer shall not accept a payment carried out with an anonymous prepaid card issued in a state other than a Member State unless the payment instrument concerned complies with the requirements of subsections (1) and (2).

(4) A person who fails to comply with subsection (3) commits an offence and is liable—

(i) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or both, or

(ii) on conviction on indictment, to a fine or imprisonment for a term not exceeding 5 years, or both.”.

8. Amendment of section 35 of Act of 2010

8. Section 35 (amended by section 14 of the Act of 2018) of the Act of 2010 is amended by the insertion of the following subsections after subsection (3):

“(3A) Prior to the establishment of a business relationship with a customer to which the European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019 (>S.I. No. 16 of 2019) apply, a designated person shall ascertain that information concerning the beneficial ownership of the customer is entered in the express trust (beneficial ownership) register.

(3B) Notwithstanding subsection (3A), a designated person that is a credit institution or a financial institution may allow an account to be opened with it by a customer before ascertaining that the information concerning the beneficial ownership of the customer is entered in the express trust (beneficial ownership) register in accordance with subsection (3A) so long as the designated person ensures that transactions in connection with the account are not carried out by or on behalf of the customer or beneficial owner before ascertaining that information.

(3C) Prior to the establishment of a business relationship with a customer to which the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (>S.I. No. 110 of 2019) (modified by the European Union (Modifications of Statutory Instrument No. 110 of 2019) (Registration of Beneficial Ownership of Certain Financial Vehicles Regulations 2020) (>S.I. No. 233 of 2020) apply, a designated person shall ascertain that information concerning the beneficial ownership of the customer is entered in the Central Register of Beneficial Ownership of Companies and Industrial Provident Societies or, as the case may be, the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts.

(3D) Notwithstanding subsection (3C), a designated person that is a credit institution or a financial institution may allow an account to be opened with it by a customer before ascertaining that information concerning the beneficial ownership of the customer is entered in the Central Register of Beneficial Ownership of Companies and Industrial Provident Societies or, as the case may be, Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts in accordance with subsection (3C) so long as the designated person ensures that transactions in connection with the account are not carried out by or on behalf of the customer or beneficial owner before ascertaining that information.”.

9. Amendment of section 36A of Act of 2010

9. Section 36A (inserted by section 15 of the Act of 2018) of the Act of 2010 is amended by the substitution of the following subsection for subsection (1):

“(1) A designated person shall, as far as possible, in accordance with policies and procedures adopted in accordance with section 54, examine the background and purpose of all transactions that—

(a) are complex,

(b) are unusually large,

(c) are conducted in an unusual pattern, or

(d) do not have an apparent economic or lawful purpose.”.

10. Amendment of section 37 of Act of 2010

10. Section 37 (amended by section 16 of the Act of 2018) of the Act of 2010 is amended—

(a) by the insertion of the following subsection after subsection (4):

“(4A) A designated person shall continue to apply the measures referred to in subsection (4) to a politically exposed person for as long as is reasonably required to take into account the continuing risk posed by that person and until such time as that person is deemed to pose no further risk specific to politically exposed persons.”,

(b) in the definition of “politically exposed person” in subsection (10), by—

(i) the substitution of “any of the following individuals” for “either of the following individuals”, and

(ii) by the insertion of the following paragraph after paragraph (b):

“(c) any individual performing a prescribed function;”,

and

(c) by the insertion of the following subsections after subsection (11):

“(12) The Minister may, with the consent of the Minister for Finance, issue guidelines to the competent authorities in respect of functions in the State that may be considered to be prominent public functions and each competent authority shall have regard to any such guidelines.

(13) The Minister may, where he or she believes it is necessary to do so, and with the consent of the Minister for Finance, issue guidelines to the competent authorities for the purpose of facilitating the consistent, effective and risk-based application of this section.”.

11. Amendment of section 38 of Act of 2010

11. Section 38 (amended by section 17 of the Act of 2018) of the Act of 2010 is amended, in subsection (1), by the insertion of “involving the execution of payments” after “correspondent relationship”.

12. Amendment of section 38A of Act of 2010

12. Section 38A (inserted by section 18 of the Act of 2018) of the Act of 2010 is amended by the substitution of the following subsection for subsection (1):

“(1) Subject to subsection (2), a designated person shall apply the following measures to manage and mitigate the risk of money laundering and terrorist financing additional to those specified in this chapter, when dealing with a customer established or residing in a high-risk third country:

(a) obtaining additional information on the customer and on the beneficial owner;

(b) obtaining additional information on the intended nature of the business relationship;

(c) obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner;

(d) obtaining information on the reasons for the intended or performed transactions;

(e) obtaining the approval of senior management for establishing or continuing the business relationship;

(f) conducting enhanced monitoring of the business relationship by increasing the number and timing of controls applied and selecting patterns of transaction that need further examination.”.

13. Amendment of section 40 of Act of 2010

13. Section 40 (amended by section 20 of the Act of 2018) of the Act of 2010 is amended, in paragraph (b) of subsection (4), by the insertion of “(including any information from relevant trust services as set out in the Electronic Identification Regulation)” after “customer”.

14. Amendment of section 42 of Act of 2010

14. Section 42 (amended by section 22 of the Act of 2018) of the Act of 2010 is amended by the insertion of the following subsection after subsection (10):

“(11) FIU Ireland shall, where practicable, provide timely feedback to a designated person who is required to make a report under this section on the effectiveness of and follow-up to reports made to it under this section.”.

15. Amendment of section 51 of Act of 2010

15. Section 51 (amended by section 24 of the Act of 2018) of the Act of 2010 is amended by the substitution of the following subsection for subsection (2):

“(2) It is a defence in any proceedings against a person for an offence under section 49, in relation to a disclosure, for the person to prove that, at the time of the disclosure—

(a) the person was a credit institution or financial institution or a majority-owned subsidiary, or a branch, of a credit institution or financial institution, or made the disclosure on behalf of a credit institution or a financial institution or a majority-owned subsidiary, or a branch, of a credit institution or financial institution, and

(b) the disclosure was to—

(i) a credit institution or financial institution incorporated in a Member State, where both the institution making the disclosure, or on whose behalf the disclosure was made, and the institution to which it was made belonged to the same group, or

(ii) a majority-owned subsidiary or branch situated in a third country of a credit institution or financial institution incorporated in a Member State, where the subsidiary or branch was in compliance with group-wide policies and procedures adopted in accordance with section 54, or, as the case may be, Article 45 of the Fourth Money Laundering Directive.”.

16. Amendment of section 55 of Act of 2010

16. Section 55 (amended by section 27 of the Act of 2018) of the Act of 2010 is amended, in subsection (2), by the insertion of “(including information from relevant trust services as set out in the Electronic Identification Regulation)” after “customers”.

17. Amendment of section 58 of Act of 2010

17. Section 58 of the Act of 2010 is amended by the substitution of “anonymous passbook or safe-deposit box” for “anonymous passbook” in each place that it occurs.

18. Amendment of section 60 of Act of 2010

18. Section 60 (amended by >section 15 of the >Central Bank Reform Act 2010) of the Act of 2010 is amended in subsection (2)—

(a) by the substitution of the following paragraph for paragraph (d):

“(d) in the case of a designated person who is a barrister, the Legal Services Regulatory Authority;”,

(b) by the deletion of paragraph (da) (inserted by >section 214 of the >Legal Services Regulation Act 2015),

(c) by the insertion after paragraph (d) of the following paragraph:

“(db) in the case of a designated person that is a property services provider, the Property Services Regulatory Authority;”,

and

(d) in paragraph (e), by the substitution of “, (d) or (db)” for “or (d)”.

19. Amendment of section 63B of Act of 2010