Wednesday, 22 November 2006

Questions (199)

Bernard J. Durkan


228 Mr. Durkan asked the Minister for Finance if he is satisfied that adequate steps have been taken through the banking and financial services sectors, here and throughout Europe, to prevent money laundering; and if he will make a statement on the matter. [39565/06]

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Written answers (Question to Minister for Finance)

Anti-Money Laundering procedures in Ireland and throughout the European Economic Area are governed by the 1st and 2nd Money Laundering Directives. Those Directives were recently updated by the 3rd Money Laundering Directive which is required to be transposed into National Law by December 2007. The main purpose of the 3rd Money Laundering Directive is to implement the most recent revisions of the recommendations of the Financial Action Task Force (FATF) on prevention of money laundering, the main international anti money laundering organisation. The FATF recommendations constitute the international standard for anti-money laundering procedures.

The procedures for the prevention of money laundering in the financial system primarily involve the requirement on financial institutions (and other designated bodies) to identify their customers, to have adequate anti-money laundering procedures in place, including staff training, to keep records and to report suspicions of money laundering and terrorist financing offences to the Garda Síochána and to the Revenue Commissioners. These procedures arise under the Money Laundering Provisions of the Criminal Justice Act, 1994.

The Financial Regulator requires all institutions which it supervises to comply with the anti-money laundering legislation and relevant sectoral guidance notes, and to have in place the necessary procedures and controls to ensure such compliance. The adequacy of such systems is reviewed by the Financial Regulator in the course of its ongoing supervision of institutions and requirements for improvement are advised to institutions as necessary. Furthermore, in accordance with its legal obligation under Section 57(2) of the Criminal Justice Act, 1994, the Financial Regulator is obliged to make reports to the Garda Síochána and the Revenue Commissioners where in the course of its supervision it suspects that an institution has breached the relevant money laundering provisions of the Criminal Justice Act, 1994.

The Garda Síochána and the Revenue Commissioners regularly receive reports from financial institutions and other designated bodies where they suspect that a money laundering offence is being or has been committed. All such reports are investigated and progressed as appropriate by the relevant authorities.

The Financial Action Task Force on Money Laundering (FATF), the international standard setting body in this area recently published a report on Ireland's systems to combat money laundering and terrorist funding. Ireland is one of twelve countries evaluated to date in the FATF Third Round of Mutual Evaluations. Its overall ratings are comparable to those obtained by the other countries evaluated.

Ireland opted to be evaluated early in the 3rd Round of Mutual Evaluations because this would be of considerable assistance in planning the transposition of the 3rd EU Money Laundering Directive into Irish Law. Many of the FATF recommendations on which Ireland is currently assessed as either partially compliant or non-compliant will be addressed in the transposition into Irish Law of the 3rd EU Money Laundering Directive. These include additional measures in relation to customer due diligence, beneficial ownership, measures relating to the identification of foreign politically exposed persons, the strengthening of the sanctions for breaches of money laundering rules and the regulation of non-financial entities.

On publication of the FATF report in March this year my colleague the Minister for Justice Equality and Law Reform and I jointly undertook to examine the Report's recommendations thoroughly and gave a commitment to further strengthen Ireland's anti-money laundering mechanisms. The process of reviewing and updating the Irish legal framework to meet both our domestic needs and international obligations is already under way and it is expected that draft legislation will be put before the Oireachtas by the Tánaiste and Minister for Justice, Equality and Law Reform in early 2007. The issues of money laundering and criminality generally are, of course, also regularly discussed at the Justice and Home Affairs (JHA) Council of the EU.