IRELAND TIGHTENS GRIP ON KYC POLICIES TO COMBAT MONEY LAUNDERING AND FINANCIAL CRIME
Ireland has implemented strict know your customer (KYC) policies for financial services professionals in a bid to strengthen its anti-money laundering (AML) and countering the financing of terrorism (CFT) framework.
Strengthening Anti-Money Laundering and Countering the Financing of Terrorism Framework
The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended by Part 2 of the Criminal Justice Act 2013 and the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018, serves as the primary legislation governing AML and CFT in Ireland. This act transposes European Union directives into domestic Irish law.
Central Bank of Ireland’s Role
The Central Bank of Ireland is responsible for monitoring and supervising financial and credit institutions’ compliance with their AML/CFT obligations. The bank has the power to take measures necessary to ensure that firms comply with the provisions of the legislation.
Know Your Customer (KYC) Identification Process
Banks and professional services firms are required to conduct a typical KYC identification process, which includes:
- Verifying proof of incorporation/registration
- Up-to-date lists of directors
- Identification of ultimate beneficial owners
- Personal identification of at least one director
- Disclosure of any politically exposed persons
However, KYC information is not required for the incorporation of a company or registration of a branch.
Customer Due Diligence Requirements
Firms may meet customer due diligence requirements by relying on third parties who are obliged by law to comply with AML regulations. However, each designated person involved in a transaction must still carry out their own individual customer due diligence to satisfy their AML obligations.
Outsourcing Customer Due Diligence
Firms may also outsource customer due diligence by contract to third parties who are not obliged by law to meet AML regulations. However, outsourcing by regulated financial services providers is subject to specific rules and is an area of increasing scrutiny by regulators.
Monitoring Compliance
The Central Bank of Ireland and European regulators will continue to monitor compliance with AML/CFT obligations to prevent financial crime. Each designated entity must fulfill its own statutory AML obligations, regardless of what other entities may or may not be doing.
Note: The statutory AML obligations of a designated entity will not be satisfied by simply seeking and/or receiving confirmation from another designated entity involved in a transaction.