Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018: Committee and Remaining Stages

Sections 1 to 13, inclusive, agreed to.
SECTION 14
Government amendment No. 1:
In page 19, line 13, after “customer” to insert “to the extent reasonably warranted by the risk of money laundering or terrorist financing”.

This amendment relates to the requirement for a designated person to monitor customers with whom he or she has a business relationship. The words to be inserted make it clear that the 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. This is in line with the directive which mandates a risk-based approach to consumer due diligence.

Amendment agreed to.
Section 14, as amended, agreed to.
Section 15 agreed to.
SECTION 16
Government amendment No. 2:
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 politically-exposed persons. In general these measures must be carried out before a customer 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. This amendment extends that exception to all financial institutions in line with the directive.

Amendment agreed to.
Section 16, as amended, agreed to.
Sections 17 to 19, inclusive, agreed to.
SECTION 20

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

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

These are technical amendments. They 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. Under the current requirement the person must be satisfied that the third party will provide him or her with relevant documents or information. These amendments clarify that it is not necessary if certain circumstances apply including that the person and the third party are part of the same group. This is in line with Article 28 of the directive.

Amendment agreed to.
Government amendment No. 4:
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”.
Amendment agreed to.
Section 20, as amended, agreed to.
Sections 21 and 22 agreed to.
NEW SECTION

Amendments Nos. 5 and 12 are related and may be discussed together by agreement.

Government amendment No. 5:
In page 27, between lines 11 and 12, to insert 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. Such a country is not considered to have adequate controls for money laundering purposes. This requirement is considered to be unnecessarily broad when complying with the new European Commission designation of states as high-risk. It would also be unduly burdensome for An Garda Síochána and the divisions involved.

There is already a general requirement to report any transaction that is suspicious. Almost 25,000 reports were received by An Garda Síochána under this requirement last year. The Bill also contains an obligation to employ enhanced due diligence in respect of customers from high-risk third countries.

Perhaps the Minister of State could provide some further clarity on amendment No. 5. The amendment involves the deletion of section 23 and involves the deletion of references to section 43 of the parent Act. The section removes the defence, under section 43 of the parent Act, relating to the use of internal reporting procedure established by an employer for the purpose of facilitating the operation of the section in question. If I understand it correctly, the amendment would remove as a defence for a breach the requirement for designated persons to report transactions connected with places that have inadequate procedures in place for detection of money laundering or terrorist financing. I presume this is the reason for the existing section 23, which would have substituted section 43 of the parent Act, and it is no longer required as the section will remain as it is. It seems a defence will no longer be available for using internal reporting procedures. Can the Minister of State clarify the matter for me? It is not entirely clear to me.

I am not fully sure what Senator Ó Donnghaile is getting at. There is a general requirement to report any transaction that is suspicious in any event. Almost 25,000 reports were received by An Garda Síochána last year under this requirement. The Bill has an obligation to apply enhanced due diligence in respect of consumers from high-risk countries. Adequate safeguards are already in place. The current measures are considered unduly burdensome for An Garda Síochána and the businesses involved. Basically, it is unworkable at the end of the day. We believe there is enough in the legislation as it is to keep the safeguards in place.

That is fair enough.

Amendment agreed to.
Sections 23 to 26, inclusive, agreed to.
SECTION 27
Government amendment No. 6:
In page 31, line 12, after “direction” to insert “in writing”.

This amendment relates to the power of An Garda Síochána to direct that documents and records are kept beyond the normal five-year retention period. It inserts the safeguard that the direction must be given in writing.

Amendment agreed to.
Section 27, as amended, agreed to.
Sections 28 to 33, inclusive, agreed to.
SECTION 34

Amendments Nos. 7, 8 and 11 are related and may be discussed together by agreement.

I might come in on amendment No. 11.

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

This amendment is to transpose part of Article 37, namely, the second paragraph of the fourth money laundering directive. The provision requires that managers and beneficial owners and providers of gambling services are fit and proper persons. The amendment inserts five new sections. It requires that anyone who is a person directing a private members' gambling club or a beneficial owner of such a club to hold a certificate of fitness. It will be an offence for such a person not to hold a certificate of fitness. The rest of the provisions set out the procedure for applying for a certificate. The application is made to An Garda Síochána. If a person does not reside in the State, then it is made to the Minister. A certificate can be refused if a person has been convicted of certain offences. The certificate lasts for three years. There is provision for an appeal to the District Court regarding the refusal to grant a certificate.

Amendments Nos. 7 and 8 are consequential and relate to the numbering of a different section. The committee will be aware of the wider work on gambling that the Government is undertaking. We have approved the establishment of an independent gambling regulator. I have chaired a working group of reform in this area which has recently completed this work. While broader proposals are being developed, these provisions will allow us to ensure that persons involved in this sector are fit and proper persons and that our EU obligations are met.

I welcome amendment No. 11. We will be supporting it. We have raised the issue on various Stages of the Bill. I discussed the matter with the Minister for Justice and Equality, Deputy Flanagan, in the House some weeks ago. The wider issues of the regulation of the betting and gambling industries and gambling control are for another day. However, Sinn Féin contends that the Department has not made sufficient progress on this issue. Having said that, I welcome the amendment because at least it is a step in the right direction. I hope we can build on it and see further regulation in terms of what is required to counter the use of gambling and private members' clubs and gambling activities to launder money. Why does the measure not include bookmakers? I would have thought that is a glaring and obvious avenue where the same practice could occur.

I welcome the amendment.

However, I add a health warning that we probably could have done more and done better as regards this and we should certainly look to do that in the future.

Does the Minister wish to respond?

I am informed that bookmakers are already subject to fitness and probity under the Betting Acts.

On the other issue of gambling, I agree and am disappointed that we have not been able to make more progress on it. Before the end of this session I hope to have the miscellaneous provisions (lotteries and raffles) Bill produced. It is extraordinarily complicated and this area is changing by the day. We had a debate her last week on loot boxes, which is a whole significant area again. I am aware that some other countries in Europe are seriously also looking at this. We are making progress on it. Our working group had five long, detailed meetings with intergovernmental Departments involved. There is a report being worked on now for Government to move this matter forward. I am determined to get it right and quite anxious that we move on as quickly as possible on this.

I thank the Senator for his support on this amendment.

That is welcome to hear and I do not doubt the Minister's bona fides on this issue. I wanted to take the opportunity where it looks that we are going to go through this Bill quite rapidly today. This was a marker that was put down, because it is an important issue.

Amendment agreed to.
Government amendment No. 8:
In page 36, line 1, to delete “109A. (1) Subject” and substitute “108A. (1) Subject”.
Amendment agreed to.

Amendment No. 9 is a Government amendment. Amendments Nos. 9 and 10 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Government amendment No. 9:
In page 36, line 28, after “of” where it firstly occurs to insert “paragraph (a) of”.

The purpose of these amendments is to correct a cross-reference.

Amendment agreed to.
Government amendment No. 10:
In page 36, line 29, to delete “section 24(1)(a)” and substitute “section 24(1)”.
Amendment agreed to.
Section 34, as amended, agreed to.
NEW SECTION
Government amendment No. 11:
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.”.”.
Amendment agreed to.
Sections 35 to 38, inclusive, agreed to.
SECTION 39
Government amendment No. 12:
In page 42, line 16, after “36” to insert “, 43”.
Amendment agreed to.
Section 39, as amended, agreed to.
Section 40 agreed to.
Title agreed to.
Bill reported with amendments and received for final consideration.
Question proposed: "That the Bill do now pass."

I thank the Members of the House for facilitating this early move to Report and Final Stages in this very important legislation with a view to concluding scrutiny of the Bill in this sitting of the Seanad. The support and engagement on this Bill from the Senators has been vital in bringing it so close to completion. I thank the Members.

Question put and agreed to.

When is it proposed to sit again?

Next Tuesday at 2.30 p.m.

The Seanad adjourned at 1.05 p.m. until 2.30 p.m. on Tuesday, 16 October 2018.