Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018: From the Seanad

The Dáil went into Committee to consider amendments from the Seanad.
Seanad amendment No. 1:
Section 14: In page 19, line 13, after “customer” to insert “to the extent reasonably warranted by the risk of money laundering or terrorist financing”.

I am pleased to report these final amendments to the House. I know from debates on earlier Stages that there is general support for this legislation and a common desire that we enact matters efficiently so that we can fulfil our international EU obligations. There are a small number of amendments, mainly of a technical nature, with other more substantive amendments that we can get through.

Amendment No. 1 relates to the requirement for a designated person to monitor customers with whom they have a business relationship. The words to be inserted are to make it clear that this monitoring is to be done only to the extent that it is warranted by the risk in a particular case of money laundering or terrorist financing. It is in line with the EU directive, which mandates "a risk-based approach" to due diligence with regard to relations with customers.

Seanad amendment agreed to.
Seanad amendment No. 2:
Section 16: In page 20, between lines 21 and 22, to insert the following:
“(e) in subsection (5), by the insertion of “or financial institution” after “a credit institution”.”.

This measure relates to customer due diligence measures for persons who can be described as politically exposed persons. In general, these measures must be carried out before a person opens an account. However, a bank can allow an account to be opened without first carrying out the measures as long as no transactions are carried out on the account, so an account is open and there are no dealings in it. The amendment extends that exception to all financial institutions and it is in accordance with the reading of the directive.

Seanad amendment agreed to.

Amendments Nos. 3 and 4 are related and may be discussed together.

Seanad amendment No. 3:
Section 20: In page 24, lines 26 and 27, to delete “and subsection (4)(b)”.

These are technical amendments, which relate to the conditions under which a designated person can rely on a third party to carry out anti-money laundering measures on his or her behalf. There is currently a requirement that the person be satisfied that the third party will provide him or her with appropriate documentation and relevant information. These amendments clarify that it is not necessary if certain circumstances apply, including that the person and third party are part of the same group. I point Deputies to Article 28 of the directive, with which the proposal is in accord.

Seanad amendment agreed to.
Seanad amendment No. 4:
Section 20: In page 25, lines 1 to 4, to delete all words from “satisfied” in line 1 down to and including “requirements” where it secondly occurs in line 4 and substitute “satisfied that the circumstances specified in paragraphs (a) to (c) of subsection (1A) exist”.
Seanad amendment agreed to.

Amendments Nos. 5 and 12 are related and may be taken together.

Seanad amendment No. 5:
New Section: In page 27, to delete lines 12 to 25 and substitute the following:
“Amendment of section 44 of Act of 2010
23. Section 44 of the Act of 2010 is amended by the deletion of “or 43” in both places where it occurs.”.

The purpose of these amendments is to remove a requirement to report to An Garda Síochána and the Revenue Commissioners all transactions relating to what is known as a "high-risk third country". A high-risk third country is one which is not considered to have adequate controls for money laundering. The requirement is considered to be unnecessarily broad when combined with the European Commission's new designations of states as high risk. The view here is that this would be unduly burdensome for An Garda Síochána and the business entities involved. We discussed this at an earlier stage of proceedings but, since the Bill was published and having regard to discussions that took place both within the House and outside, I think the amendment is considered desirable. There is already something of a requirement to report any transaction that is suspicious. This is a general requirement. In that regard, almost 25,000 reports were received by An Garda Síochána under this requirement last year. The Bill also contains an obligation to apply due diligence of an enhanced nature with regard to customers from high-risk third countries. I would not like Deputies to think that we were in any way diluting or weakening the legislation and have proposed the amendment for that reason.

Seanad amendment agreed to.
Seanad amendment No. 6:
Section 27: In page 31, line 12, after “direction” to insert “in writing”.

Amendment No. 6 relates to the power of An Garda Síochána to direct that documents and records are kept beyond the normal period of five years. This inserts a safeguard that the direction must be given in writing.

Seanad amendment agreed to.

Amendments Nos. 7, 8 and 11 are related and may be considered together.

Seanad amendment No. 7:
Section 34: In page 35, line 37, to delete “section 109” and substitute “section 108”.

These amendments transpose part of Article 47, paragraph 2, of the fourth directive. That requires that managers as well beneficial providers of gambling services are persons who are regarded as fit or proper persons. Amendment No. 11 inserts five new sections, requiring anybody who is a person directing a private members' gambling club or who is a beneficial owner of such a club must hold certificate of fitness and, if they do not, it will be an offence for any person to engage in activities or business without holding it. The rest of the provisions set out the procedure that will be in place to apply for this certificate of fitness. The application will be made to An Garda Síochána. If the person does not live within the State, it is made to the Minister. A certificate may be refused if a person has been convicted of certain offences. The certificate will last for three years. There is a provision for an appeal to the District Court in respect of a refusal to grant a certificate.

Amendments Nos. 7 and 8 are consequential amendments to the numbering of a different section. The House will be aware of the wider work on gambling that the Government is undertaking. We have approved the setting up of an independent gambling regulator. My colleague, the Minister of State, Deputy Stanton, has chaired a working group on reforms in this area which has recently completed its work. While those broader proposals are being developed, the provisions here now will allow us to ensure that persons involved in this sector are persons who can be regarded as fit, proper and appropriate. We do that in respect of our national legislation and so that our EU obligations are complied with and met.

I want to speak to the last portion of the Bill that the Minister spoke about introducing relating to the certificate of fitness. I am homing in on the Gaming and Lotteries Act 1956. Fianna Fáil brought forward a Gambling Control Bill and I feel this is diluting it. Listening to the Minister's statement, I understand what he is saying. At what stage are he and the Minister of State, Deputy Stanton, in setting up the independent regulator? I would like to hear reassurances about where we are with the setting up of the independent regulator. Why exactly would the Minister have picked out cards clubs as opposed to looking at this in its entirety?

I welcome amendment No. 11 in particular. We will support it. We have raised this issue at various stages. As the Minister said in his contribution, there are wider issues of regulation of betting, gambling industries and gambling control, but they are for another day. I acknowledge the progress that the Minister of State, Deputy Stanton, has made but I do not believe the Department has made sufficient progress on this issue. Will the Minister explain exactly when the future gambling control Bill is due before the House? I welcome the amendment because it is a step in the right direction. I hope we can build on it and see further regulation with regard to what is required to counter the use of gambling in private members' clubs and gambling activities to launder money. Why does the measure not include, for instance, bookmakers? This issue has been raised with us and we have raised it before.

I would have thought that was an obvious avenue where the practices this Bill is seeking to quell occurs. We have seen it in some court cases in the past. I also add a health warning to the effect that we could probably have done more and better as regards this issue and we will need to look again at it in the future. The Minister of State, Deputy Stanton, said in the Seanad a few weeks ago that what I am raising is covered by various betting Acts. However, this was raised as a serious issue in the debates on the ever-promised gambling control Bill, which supposedly has been coming in for the past six years but we have not seen it yet. Has gambling been left on the back-burner? I hope that is not the case and that the Minister will be able to indicate exactly when we will get to grips with an issue that has been raised here in the House. That will not take away from the specifics the Minister is trying to achieve in the legislation today, but hopefully it will add to it.

I thank Deputy Rabbitte because if I correctly interpret her contribution it is one of forbearance towards the Government in respect of the gambling issue. I accept that with the grace with which it was offered. I acknowledge her contribution towards that and her interest in it. I am very keen that we can progress matters here. I assure her that every effort is being made in my Department, in particular under the stewardship of the Minister of State, Deputy Stanton, in order that we can meet specific targets. I understand Deputy Rabbitte's frustration and that of a number of Deputies who have been consistent in their interest in this issue and in their cause that matters would be updated. I accept everything that has been said but I would ask that at this point my bona fides would be accepted.

On the matter of the gaming and lotteries (amendment) Bill, work is ongoing between my officials and the Office of the Attorney General. It is envisaged that the Bill will be ready for publication late this year or very early next year. It has been included on the priority list for publication for autumn 2018. We have seven weeks left and we will keep in communication with the Deputy but I would be very disappointed if we do not have the Bill ready for publication within the timeframe envisaged. I will not go into detail but I will respond to some of the questions asked. The Bill will standardise at 18 the age limit for gambling and gaming. The age limit for the tote will now be set at 18. There will be a streamlining of applications for permits and licences. We hope to be in a position to move on to the publication of the Bill very shortly.

In response to Deputy Ó Snodaigh's question, it seems that bookmakers are already in compliance with the measures I am introducing here in respect of the money laundering directive. The amendments are similar to those which already exist in respect of bookmakers. Deputy Rabbitte asked why we are singling out private members' clubs and the reason for that is it is a requirement of the EU directive. It is an interim measure pending fuller regulation.

I acknowledge the support and work of Deputy Rabbitte and others in the House on the gambling regulation Bill. It has been helpful and it has not gone unnoticed by the Government. In January the Government approved the drafting of the general scheme to update the 2013 general scheme. The working group is chaired by the Minister of State, Deputy Stanton, and it is the group's intention that it would report directly to the Government prior to Christmas. Given the complexity of the gambling regulation Bill, which Deputy Rabbitte knows as well as anyone, it will take up to 12 months to draft the Bill. We will continue to work closely with the Office of the Attorney General. I would be very happy to keep Deputy Rabbitte and any other Deputies who are specialists in the area fully informed. I thank them for their work and interest in this issue.

Seanad amendment agreed to.

Seanad amendment agreed to.
Seanad amendment No. 8:
Section 34: In page 36, line 1, to delete “109A. (1) Subject” and substitute “108A.(1) Subject”.
Seanad amendment agreed to.
Seanad amendment No. 9:
Section 34: In page 36, line 28, after “of” where it firstly occurs to insert “paragraph (a) of”.
Seanad amendment agreed to.
Seanad amendment No. 10:
Section 34: In page 36, line 29, to delete “section 24(1)(a)” and substitute “section 24(1)”.
Seanad amendment agreed to.
Seanad amendment No. 11:
New Section: In page 37, between lines 17 and 18, to insert the following:
“Managers and beneficial owners of private members’ clubs - certificates of fitness
35. The Act of 2010 is amended by the insertion of the following sections after section 109:
“Managers and beneficial owners of private members’ clubs to hold certificates of fitness
109A.(1) An individual who—
(a) effectively directs a private members’ club at which gambling activities are carried on, or
(b) is a beneficial owner of a private members’ club at which gambling activities are carried on,
shall hold a certificate of fitness and probity (referred to in this section and sections 109B, 109C, 109D and 109E as a ‘certificate of fitness’) granted by a Superintendent of the Garda Síochána or, as the case may be, by the Minister.
(2) An individual who fails to comply with subsection (1) commits an offence and is liable—
(a) on summary conviction, to a fine not exceeding €5,000 or imprisonment for a term not exceeding 12 months, or both, or
(b) on conviction on indictment to a fine or imprisonment for a term not exceeding 5 years, or both.
(3) Where on the date that is 6 months from the coming into force of this section an individual has applied for a certificate of fitness, this section shall not apply to that individual until such time as the application, and any appeal in relation to the application, has been finally determined.
Application for certificate of fitness
109B.(1) Upon compliance with subsection (2), an individual shall make an application for a certificate of fitness—
(a) where the individual ordinarily resides in the State—
(i) to the Superintendent of the Garda Síochána for the district in which he or she ordinarily resides, or
(ii) to the Superintendent of the Garda Síochána for the district in which the private members’ club concerned is located or is proposed to be located,
or
(b) where the individual ordinarily resides outside the State, to the Minister.
(2) An individual intending to apply for a certificate of fitness under this section shall, not later than 14 days and not earlier than one month before making the application, publish in two daily newspapers circulating in the State, a notice in such form as may be prescribed, of his or her intention to make the application.
(3) An application for a certificate of fitness under this section shall be in such form as may be prescribed.
(4) The applicant for a certificate of fitness shall provide the Superintendent of the Garda Síochána, or as the case may be the Minister, to whom the application concerned is made with all such information as he or she may reasonably require for the purposes of determining whether a relevant consideration referred to in section 109C exists.
(5) A Superintendent of the Garda Síochána, or as the case may be the Minister, to whom an application for a certificate of fitness is duly made under this section shall, not later than 56 days after receiving the application, either—
(a) grant the application and issue a certificate of fitness to the applicant, or
(b) refuse the application.
(6) A certificate of fitness under this section shall be in such form as may be prescribed.
(7) An individual who, in applying for a certificate of fitness under this section, makes a statement or provides information to a Superintendent of the Garda Síochána or, as the case may be, to the Minister, that he or she knows, or ought reasonably to know, is false or misleading in a material respect commits an offence and is liable—
(a) on summary conviction to a class A fine or imprisonment for a term not exceeding 6 months, or both, or
(b) on conviction on indictment to a fine not exceeding €50,000 or imprisonment for a term not exceeding 2 years, or both.
(8) A Superintendent of the Garda Síochána shall, as soon as may be after making a decision in relation to an application for a certificate of fitness, notify the Minister in writing of that decision.
Grounds of refusal to grant certificate of fitness
109C.(1) A Superintendent of the Garda Síochána or, as the case may be, the Minister shall not refuse an application for a certificate of fitness made in accordance with section 109B unless—
(a) a relevant consideration exists, or
(b) he or she is not satisfied that the applicant has provided such information as he or she reasonably requires for the purposes of determining whether a relevant consideration exists.
(2) For the purposes of subsection (1), a relevant consideration exists if—
(a) the applicant stands convicted of an offence under—
(i) an enactment relating to excise duty on betting,
(ii) the Gaming and Lotteries Acts 1956 to 2013,
(iii) section 1078 of the Taxes Consolidation Act 1997,
(iv) the Criminal Justice (Theft and Fraud Offences) Act 2001, or
(v) this Act,
(b) the applicant stands convicted of an offence under the law of a place (other than the State)—
(i) consisting of an act or omission that, if committed in the State, would constitute an offence referred to in paragraph (a), or
(ii) relating to the conduct of gambling,
or
(c) the applicant was previously refused a certificate of fitness and either—
(i) the applicant did not appeal the refusal, or
(ii) on appeal to the District Court, the refusal was affirmed.
(3) In this section, ‘enactment’ means—
(a) an Act of the Oireachtas,
(b) a statute that was in force in Saorstát Éireann immediately before the date of the coming into operation of the Constitution and that continues in force by virtue of Article 50 of the Constitution,
(c) an instrument made under—
(i) an Act of the Oireachtas, or
(ii) a statute referred to in paragraph (b).
Duration of certificate of fitness
109D.(1) A certificate of fitness shall remain in force until the expiration of 3 years after the date on which the certificate was issued.
(2) If, before the expiration of a certificate of fitness, the individual to whom it was issued makes an application for a new certificate of fitness, the first-mentioned certificate of fitness shall remain in force—
(a) until the issue of the new certificate of fitness,
(b) in circumstances where the application is refused by the Superintendent of the Garda Síochána concerned or by the Minister and the individual does not make a request referred to in section 109E(1), until the expiration of the period within which the request may be made,
(c) in circumstances where the application is refused by the Superintendent of the Garda Síochána concerned or by the Minister and the individual makes a request referred to in section 109E(1) but does not bring an appeal under that section, until the expiration of the period specified in subsection (3) of that section, or
(d) in circumstances where the application is refused by the Superintendent of the Garda Síochána concerned or the Minister and the individual appeals the refusal in accordance with section 109E, until—
(i) the District Court affirms the refusal in accordance with that section, or
(ii) the issue of a new certificate of fitness pursuant to a direction of the District Court under subsection (4)(b) of that section.
Appeal where application for certificate of fitness is refused
109E.(1) If a Superintendent of the Garda Síochána, or as the case may be, the Minister refuses an application for a certificate of fitness, he or she shall, on the request in writing of the applicant made not later than 14 days after the refusal, give the applicant a statement in writing of the reasons for the refusal.
(2) A person to whom a certificate of fitness has been refused may, not later than 14 days after receiving a statement in writing under subsection (1), appeal the refusal to the District Court.
(3) A person who brings an appeal under this section shall, in such manner and within such period as may be prescribed give notice of the appeal to the Superintendent of the Garda Síochána concerned or, as the case may be, the Minister.
(4) The District Court may, upon an appeal under this section, either—
(a) affirm the refusal, or
(b) grant the appeal and direct the Superintendent of the Garda Síochána concerned, or as the case may be, the Minister to issue a certificate of fitness to the appellant.
(5) The Superintendent of the Garda Síochána concerned or, as the case may be, the Minister shall comply with a direction of the District Court under this section not later than 3 days after the giving of the direction.
(6) The respondent in an appeal under this section shall not be entitled to advance as a reason for opposing an appeal under this section a reason not specified in a statement of the reasons for a refusal given to the appellant pursuant to a request under subsection (1).
(7) If the District Court affirms a refusal under subsection (4)(a), it may also make an order requiring the appellant to pay the costs incurred by the respondent in defending the appeal and may determine the amount of such costs.
(8) There shall be no appeal to the Circuit Court from a decision of the District Court under this section.
(9) An appeal under this section by a person ordinarily resident in the State shall be brought before a judge of the District Court assigned to the District Court district—
(a) in which he or she ordinarily resides, or
(b) in which the private members’ club concerned is located or is proposed to be located.
(10) An appeal under this section by a person not ordinarily resident in the State shall be brought before a judge of the District Court assigned to the Dublin Metropolitan District.”.”.
Seanad amendment No. 12:
Section 39: In page 42, line 16, after “36” to insert “, 43”.
Seanad amendment agreed to.
Seanad amendments reported.