I welcome the opportunity to present the Bill to the House. I am pleased that it received general support on its recent passage through the Dáil. I am hopeful that Senators will be similarly supportive.
This legislation transposes the criminal justice elements and several of the non-criminal justice elements of the Fifth EU Anti-money Laundering Directive 2018/843. This directive builds upon the fourth anti-money laundering directive to better equip to the Union to prevent the financial system from being used for money laundering and terrorist financing. Money laundering underpins and enables most forms of organised crime. It allows criminal groups to further their operations, onceal their assets and use the proceeds in legitimate financial systems and markets. By pursuing the proceeds of crime, we can bring those responsible to justice and meaningfully the incentives to commit crimes in the first place.
The work of the Criminal Assets Bureau, CAB, and the Garda National Economic Crime Bureau, GNECB, is crucial in identifying and tracing such proceeds. An Garda Síochána has been allocated an unprecedented budget of €1.952 billion for 2021. Competitions are currently under way to strengthen the staffing levels in the GNECB financial intelligence unit and the GNECB itself, as well as in the Office of the Director of Corporate Enforcement, ODCE. Investment in the GNECB will see its number of officers increase from 46 to 112. There will also be significant investment in ICT.
We have seen far too many recent examples of so-called money mules, where young or vulnerable people are drawn into allowing their bank accounts to be used to launder money. It is vital to emphasise that a person who acts as a mule may be convicted of the primary offence of money laundering and face extremely serious consequences.
A conviction carries a maximum sentence of 14 years. It can affect visa applications and the ability to work in the financial sector and it can affect the ability of the person to access financial products in the future.
The fifth anti-money laundering directive places a renewed focus on the gatekeepers of our financial system. It ensures there is increasing transparency by bringing further institutions within the scope of the regulatory framework and by combating the use of new trends and technologies employed by criminals. In particular, it brings several new designated persons under the existing legislation, including property services providers, as well as dealers and intermediaries in the art trade. It limits the anonymity related to virtual assets service providers and wallet providers, but also for prepaid cards. It broadens the criteria for the assessment of high-risk third countries and improves the safeguards for financial transactions to and from such countries. It prevents credit and financial institutions from creating anonymous safe deposit boxes. It also provides for ministerial guidance to clarify the scope of "prominent public functions" falling under the "politically exposed person", PEP, regime.
There are, of course, already robust and extensive anti-money laundering laws in place in Ireland. The existing Act, as amended, runs to almost 150 sections, with the majority of those sections concerning designated persons and their obligations. A person commits a money laundering offence if he or she, among other things, uses, conceals, disguises, transfers, acquires, converts or removes from the State the proceeds of crime. This applies if the person knows or believes that he or she is handling the proceeds of crime or is reckless as to whether he or she is doing so.
Ireland's position as a leading international financial services centre places an even greater importance on ensuring that we never become a weak link. My Department works closely with the Department of Finance which is also engaged in giving effect to certain provisions of the directive, notably with regard to the registration and supervision of virtual assets service providers and for the designation of classes of legal instruments for the central register of beneficial ownership of trusts.
I turn now to the specific provisions of the Bill. Sections 1 to 4, inclusive, contain provisions which update various definitions in the 2010 Act to bring it into line with the definitions used in the fifth directive. In particular, section 3 provides for the definitions of the new entities that will be considered designated persons under the Act. This includes new definitions of property service provider, virtual asset service provider and custodian wallet provider.
Section 5 amends section 25 of the 2010 Act and brings the new entities under the designated person provisions who are required to apply anti-money laundering measures in the course of their business. These new designated persons include letting agents, virtual asset service providers and high-value art dealers and intermediaries in that trade.
Section 6 amends section 33 of the 2010 Act and provides for a number of technical amendments, including an obligation to carry out customer due diligence when required to contact the customer under any other enactment.
Section 7 amends section 33A of the 2010 Act and provides for lowering the value limits for carrying out simplified due diligence on e-money instruments. This means that a person supplying e-money instruments, such as a prepaid card, will be required to conduct customer due diligence when the value of the requested card is €150 or higher. The existing threshold is €250.
Section 8 amends section 35 of the 2010 Act and provides that where a designated person is entering a business relationship with another entity, that person must take steps to obtain the relevant information from the register of beneficial ownership of trusts, corporate entities or financial vehicles, as appropriate, and must not engage in that business relationship until the relevant information is obtained.
Section 9 amends section 36A of the 2010 Act to give effect to a technical amendment to the wording of the directive in respect of which transactions require further examination.
Section 10 amends section 37 of the 2010 Act to provide for the Minister for Justice, with the consent of the Minister for Finance, to issue guidance to competent authorities on the prominent public functions that will give rise to a person being designated as a politically exposed person.
Section 11 makes a technical amendment to section 38 of the 2010 Act to more clearly define the relevant relationship.
Section 12 amends section 38A of the 2010 Act and provides for a detailed list of enhanced due diligence measures that the designated person is required to apply when dealing with a customer established, or residing, in a high-risk third country.
Section 13 makes a technical amendment to section 40 of the 2010 Act in respect of information to be received from a relevant third party.
Section 14 places a requirement on the financial intelligence unit, FIU Ireland, to provide, where practicable, feedback in respect of suspicious transaction reports made to it. This reflects existing administrative practice.
Section 15 amends section 51 of the 2010 Act and provides for a defence to proceedings in respect of "tipping off" where the designated person can prove that the entity to which the information was disclosed was a specified financial institution that is connected to the designated person or part of the same group structure.
Section 16 makes a technical amendment to section 55 of the 2010 Act in respect of record-keeping.
Section 17 amends section 58 of the 2010 Act and prohibits credit or financial institutions from creating anonymous safe deposit boxes. Section 18 amends section 60 of the 2010 Act and assigns a supervising competent authority for the new designated persons under the amendment to section 25. Section 19 amends section 63B of the 2010 Act and provides for additional measures in respect of co-operation between the competent authorities in different member states.
Section 20 amends section 63D of the 2010 Act and updates the provisions relating to persons employed by competent authorities in line with the updates in the fifth directive. Section 21 inserts a new section 63E into the 2010 Act. The new section provides that each competent authority must establish effective and reliable mechanisms to encourage the reporting of breaches of the Act. It also requires a competent authority to provide a secure communication channel for such reporting. Section 22 amends section 65 of the 2010 Act and provides for additional detail that is to be included in the annual money laundering reports of self-regulating bodies. Section 23 makes a technical amendment to section 84 of the 2010 Act. Section 24 repeals and replaces section 101 of the 2010 Act and inserts new provisions for the establishment of a trust or company service provider appeal tribunal.
Section 25 inserts Chapter 9A after Chapter 9 to create a registration and supervision regime for anti-money laundering, AML, purposes in respect of virtual asset service providers. Section 26 inserts a new Chapter 9B in the 2010 Act to provide for the designation of classes of expressed trusts for the purpose of establishing a central register of beneficial ownership of trusts. Regulations to be issued by the Minister for Finance will follow the enactment of this Bill and the register will be managed and maintained by the Revenue Commissioners. Sections 27 and 28 amend and update the risk factors set out in Schedules 3 and 4 to the 2010 Act. The amendments are to provide for the relevant updates in the fifth directive. Section 29 is a technical amendment to bring information under the money laundering directive into the confidentiality and information exchange provisions of the Central Bank Acts. Section 30 provides for the Short Title and commencement provisions of the Bill.
This is an important Bill. By enhancing Ireland's already extensive AML regime, it will act as a further tool to combat global organised crime, protect the financial system and ensure that we meet the highest international standards. Combating such crime is a Government priority. I look forward to hearing the views of Senators and ask for their co-operation in the passage of this legislation through the House.