Government Moves to Strengthen AML Measures, Introduce Feedback Mechanism for Financial Institutions

The Irish Government has approved the drafting of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill [2020], which aims to transpose certain criminal justice provisions from the EU’s Fifth Anti-Money Laundering Directive into Irish law.

According to the proposed legislation, financial institutions within a group structure will be allowed to share information relating to suspicious transactions with each other. This move is designed to enhance the sharing of intelligence and prevent money laundering and terrorist financing.

Feedback Mechanism for Financial Institutions

The Bill also requires the Financial Intelligence Unit (FIU) to provide timely feedback to designated persons where practicable, in respect of suspicious transaction reports made to them. This will enable financial institutions to receive prompt responses to their disclosures and take swift action to address potential threats.

Compliance with International Standards

The proposed amendments are part of Ireland’s efforts to comply with international standards set by the Financial Action Task Force (FATF), a global money laundering and terrorist financing watchdog. The FATF has developed recommendations aimed at preventing organized crime, corruption, and terrorism, and Ireland’s fourth mutual evaluation assessment was published in September 2017.

Key Provisions of the Bill

Introduces enhanced customer due diligence requirements
Safeguards for financial transactions to and from high-risk third countries
Prevents credit and financial institutions from creating anonymous safe-deposit boxes
Requires the FIU to provide timely feedback to designated persons where practicable, in respect of suspicious transaction reports made to them

Monitoring Compliance

The Anti-Money Laundering Compliance Unit in the Department of Justice has been established to monitor compliance with AML regulations. The unit’s role includes:

Authorizing and monitoring trust or company service providers
Undertaking compliance monitoring of tax advisers/external accountants, bookmakers, and private members’ clubs
Reporting suspicions of money laundering or terrorist financing to An Garda Síochána and the Revenue Commissioners

Expected Outcomes

The proposed amendments are expected to enhance Ireland’s AML regime and bring it in line with international standards.