CRIMINAL JUSTICE (MONEY LAUNDERING AND TERRORIST FINANCING) (AMENDMENT) ACT 2021

“Chapter 9B

Designation of Classes of Express Trust (and Matters Related to Such Trusts) for Certain Purposes

Purpose of Chapter

106Z. (1) The purpose of this Chapter is to make provision for the meaning that certain words or expressions shall have in regulations that are made, on or after the commencement of section 26 of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021, under >section 3 of the >European Communities Act 1972, for the purpose of giving effect to Article 31 of the Fourth Money Laundering Directive.

• (2) Nothing in this Chapter applies to the construction of a word or expression used in another Chapter of this Part.

Operation and interpretation (Chapter 9B)

106ZA. (1) Where the relevant regulations specify that, with respect to a particular word or expression, the designated meaning in the Act of 2010 shall apply then the meaning as hereafter provided in this Chapter shall apply with respect to that word or expression.

• (2) A reference in this Chapter to a definition being ‘designated’ with respect to a particular word or expression is a reference to the definition (with respect to the particular word or expression) being designated for the purposes of the relevant regulations.

• (3) In this Chapter—

‘Act of 1997’ means the >Taxes Consolidation Act 1997;

‘relevant regulations’ means the regulations referred to in section 106Z(1).

• (4) In this Chapter, a reference to the Fourth Money Laundering Directive is a reference to that Directive as amended by the Fifth Money Laundering Directive.

Power to prescribe certain matters

106ZB. The Minister for Finance may by regulations provide for any matter referred to in this Chapter as prescribed or to be prescribed.

Relevant trust - designated meaning

106ZC. (1) The following definition is designated with respect to ‘relevant trust’:

‘relevant trust’ means an express trust established by deed or other declaration in writing and any other arrangement or class of arrangements as may be prescribed but does not include an excluded arrangement.

• (2) For the purposes of the definition, designated by subsection (1), with respect to ‘relevant trust’, ‘excluded arrangement’ means an arrangement of the following kind:

  • (a) an occupational pension scheme that is an approved scheme pursuant to Chapter 1 of Part 30 of the Act of 1997;

  • (b) an approved retirement fund within the meaning of Chapter 2 of Part 30 of the Act of 1997;

  • (c) a profit sharing scheme or employee share ownership trust approved pursuant to Part 17 of the Act of 1997;

  • (d) a trust for restricted shares within the meaning of section 128D of the Act of 1997;

  • (e) the Haemophilia HIV Trust which was established by deed dated the 22nd day of November 1989, made between the Minister for Health, of the one part and certain other persons, of the other part;

  • (f) a unit trust within the meaning of 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), the beneficial ownership of which, by virtue of the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (>S.I. No. 110 of 2019), is required to be registered in the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts;

  • (g) such other arrangement or class of arrangements as may be prescribed.

• (3) For the purpose of ensuring the uniform application of European Union law between Member States, the Minister for Finance may prescribe any arrangement or class of arrangements to be an excluded arrangement for the purpose of subsection (2)(g), where he or she is satisfied that such arrangement or class of arrangements is not an express trust or similar legal arrangement within the meaning of the Fourth Money Laundering Directive, taking into consideration such information as is available to him or her on the following matters—

  • (a) the low risk of money laundering or terrorist financing presented by such arrangement or class of arrangements having regard, in particular, to:

    • (i) the legal structure of such arrangement or class of arrangements;

    • (ii) any supervision or regulation of such arrangement or class of arrangements under any enactment,

    and

  • (b) the non-application of Article 31 of the Fourth Money Laundering Directive to arrangements in other Member States having comparable purposes and structures to such arrangement or class of arrangements.

• (4) For the purpose of ensuring the uniform application of European Union law between Member States, the Minister for Finance may prescribe any arrangement or class of arrangements to be a relevant trust for the purpose of the definition, designated by subsection (1), with respect to ‘relevant trust’ where he or she is satisfied that such arrangement or class of arrangements is an express trust or a similar legal arrangement within the meaning of the Fourth Money Laundering Directive, taking into consideration such information as is available to him or her on the following matters—

  • (a) the risk of money laundering or terrorist financing presented by such arrangement or class of arrangements having regard, in particular, to:

    • (i) the legal structure of such arrangement or class of arrangements;

    • (ii) the absence of, or any limitations in, the supervision or regulation of such arrangement or class of arrangements under any enactment,

    and

  • (b) the application of Article 31 of the Fourth Money Laundering Directive to arrangements in other Member States having comparable purposes and structures to such arrangement or class of arrangements.

  Beneficial owner in relation to relevant trusts - designated meaning

  106ZD. (1) Subject to subsections (5) to (7), the following definition is designated with respect to ‘beneficial owner’ (in relation to a relevant trust):

  ‘beneficial owner’, in relation to a relevant trust, means any of the following:

  • (a) any individual who is entitled to a vested interest in possession, remainder or reversion, whether or not the interest is defeasible, in the capital of the relevant trust property;

  • (b) in the case of a relevant trust other than one that is set up or operates entirely for the benefit of individuals referred to in paragraph (a), the class of individuals in whose interest the trust is set up or operates;

  • (c) any individual who has control over the relevant trust;

  • (d) the settlor;

  • (e) the trustee;

  • (f) the protector.

• (2) For the purposes of the definition, designated by subsection (1), with respect to ‘beneficial owner’ (in relation to a relevant trust), subsections (3) to (7) shall apply; the relevant regulations may, for convenience of reference, set out any of the provisions of this section (whether those that precede or follow this subsection) notwithstanding the application (provided for by section 106ZA(1)) of those provisions to those regulations.

• (3) Except as provided by subsection (5), in this section ‘control’, in relation to a relevant trust, means a power (whether exercisable alone, jointly with another person or with the consent of another person) under the trust instrument concerned or by law to do any of the following:

  • (a) dispose of, advance, lend, invest, pay or apply the trust property;

  • (b) vary the relevant trust;

  • (c) add or remove a person as a beneficiary or to or from a class of beneficiaries;

  • (d) appoint or remove trustees;

  • (e) direct, withhold consent to or veto the exercise of any power referred to in paragraphs (a) to (d).

• (4) For the purposes of the definition of ‘control’ in subsection (3), an individual does not have control solely as a result of the power exercisable collectively at common law to vary or extinguish a trust where the beneficiaries under the trust are at least 18 years of age, have full capacity and (taken together) are absolutely entitled to the property to which the trust applies.

• (5) Notwithstanding subsection (1), ‘beneficial owner’, in relation to a relevant trust established for the purpose of holding any assets of an approved body of persons established for, and existing for, the sole purpose of promoting amateur games or amateur sports within the meaning of section 235 of the Act of 1997, means the trustees, the committee or other governing body of the club or association, and any other individual who has control over the relevant trust.

• (6) Notwithstanding subsection (1), ‘beneficial owner’, in relation to a relevant trust that is a charitable trust within the meaning of >section 2 of the >Charities Act 2009, means the trustees and the committee or other governing body of the charitable trust, and any other individual who has control over the charitable trust.

• (7) Notwithstanding subsection (1), ‘beneficial owner’, in relation to an estate—

  • (a) of a deceased person in the course of administration, and

  • (b) in relation to which there is provision for a relevant trust for one or more beneficiaries,

  means the executor or administrator of the estate, and no other person, for the period in which the estate is being administered.”.

27. Amendment of Schedule 3 to Act of 2010

27. Paragraph 3 of Schedule 3 (inserted by section 38 of the Act of 2018) to the Act of 2010 is amended by the substitution of “Geographical risk factors - registration, establishment, residence in:” for “Geographical risk factors:”.

28. Amendment of Schedule 4 to Act of 2010

28. Schedule 4 (inserted by section 39 of the Act of 2018) to the Act of 2010 is amended—

• (a) in paragraph (1)—

• (i) in subparagraph (g) by the substitution of “business;” for “business.”, and

• (ii) by the insertion of the following subparagraph after subparagraph (g):

• “(h) the customer is a third country national who applies for residence rights or citizenship in the State in exchange for capital transfers, purchase of property or government bonds or investment in corporate entities in the State.”,

and

• (b) in paragraph (2)—

• (i) by the substitution of the following for subparagraph (c):

• “(c) non face-to-face business relationships or transactions, without certain safeguards, such as electronic identification means, relevant trust services as defined in the Electronic Identification Regulation or any other secure, remote or electronic, identification process regulated, recognised, approved or accepted by the relevant national authorities;”,

• (ii) in subparagraph (e), by the substitution of “products;” for “products.”, and

• (iii) by the insertion of the following after subparagraph (e):

• “(f) transactions related to oil, arms, precious metals, tobacco products, cultural artefacts and other items of archaeological, historical, cultural and religious importance, or of rare or scientific value, as well as ivory and protected species.”.

29. Amendment of section 33AK of Central Bank Act 1942

29. Section 33AK of the >Central Bank Act 1942 is amended, in subsection (10), in the definition of “supervisory EU legal acts”—

• (a) in paragraph (ah), by the substitution of “12 December 2017⁴,” for “12 December 2017;”, and

• (b) by the insertion of the following paragraph after paragraph (ah):

• “(ai) Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015⁵ on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC, as amended by Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018⁶;”.

30. Short title, commencement and collective citation

30. (1) This Act may be cited as the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021.

• (2) This Act shall come into operation on such day or days as the Minister for Justice and Equality may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or provisions.

• (3) The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2018 and this Act may be cited together as the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021.

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