Following the signing of a Commencement Order by the Minister for Justice and Law Reform, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“the Act”) is in force from 15 July 2010. The Act transposes the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC) into domestic law, bringing Ireland into line with EU requirements and the recommendations of the Financial Action Task Force. Designated persons under the Act, including all credit and financial institutions (as defined in the Act) are required to comply with their obligations under the Act with immediate effect.
The Act contains specific and detailed regulatory requirements which are more extensive than the previous money laundering and terrorist financing provisions contained within the Criminal Justice Act 1994[1]. Therefore, the level of dependence on supplementary Guidance Notes to support implementation (as was the case with the 1994 Act) should be significantly lower under the new Act. Credit and financial institutions must refer to the provisions of the Act to ascertain their statutory obligations.
The Central Bank and Financial Services Authority of Ireland (“the Bank”) is specified in the Act as the State competent authority for credit and financial institutions. The Bank, pursuant to section 63 of the Act, is responsible for effectively monitoring credit and financial institutions’ compliance with their obligations.
Credit and financial institutions are hereby informed that:
i. they must achieve compliance with their obligations under the Act.
ii. the Bank will conduct a range of on-site inspections across the financial sector to “effectively monitor” compliance and effective implementation by credit and financial institutions with regard to their obligations under the Act.
iii. as part of the inspection process, emphasis will be placed on compliance with section 54(2)(a) of the Act with regard to the adoption and implementation of policies and procedures for the assessment and management of risks of money laundering and terrorist financing. The Bank expects that policies and procedures will be up-to-date and available for inspection, and that senior management (including boards of directors) can demonstrate full awareness of their responsibilities.
iv. the Bank will, as provided in section 63 of the Act, “take measures that are reasonably necessary for the purpose of securing compliance.” Administrative sanctions are available to the Bank to achieve this statutory objective. In the initial period to 31 December 2010, discretion may be applied in relation to sanctions, though only where deficiencies identified are minor and on condition that the credit or financial institution concerned rectifies the situation within an agreed timeframe.
v. the Bank is continuing to work with financial sector representatives to finalise, as soon as practicable, a set of guidelines to reflect fully and consistently the provisions of the Act. The target date for finalisation of this project is end-October 2010.
Enforcement Department
Central Bank and Financial Services Authority of Ireland
21 July 2010
[1] Sections 31, 32, 32A, 57(1) to (6) and (7)(a), 57A and 58(2) of the Criminal Justice Act 1994, together with certain statutory instruments, have been repealed by section 4 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.