European legislation has been adopted to protect the financial system and certain professions and activities from being misused for money laundering and financing of terrorism purposes. The anti-money-laundering obligations applicable in Ireland derive from the Third EU Money-Laundering Directive. The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 was enacted in July 2010 to transpose the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC) into Irish Law. Part 4 of the Criminal Justice Act 2010 sets out the obligations of “designated persons” in relation to customer identification. One such obligation set out in the Act is the obligation to conduct customer due diligence, prior to the establishment of a business relationship. Customer due diligence refers to the identification of customers and that of any beneficial owners of financial products associated with the customer.
An Post and the Prize Bond Company are deemed to be a “designated person” under the Criminal Justice Act 2010 as they fall within the definition of a “financial institution ”. In light of this, An Post and the Prize Bond Company are required to comply with the relevant provisions of the Act in relation to the sale of Prize Bonds to customers. This means, in practical terms, that customer due diligence must be conducted on all purchases of prize bonds, irrespective of value.
The extent to which any particular person or product may be exempted from the customer due diligence requirements of the Act is determined by reference to the Act having regard to the underlying Directives. The Central Bank of Ireland has no discretion to exempt certain firms from the requirement to comply with the Act. In light of the above, I am exploring with the National Treasury Management Agency (NTMA) and my colleague the Minister for Justice whether or not exemptions available under the Directives may be applied to small value purchases of prize bonds facilitated on behalf of the State by An Post and the Prize Bond Company.