Dáil Éireann Debate, Thursday - 11 May 2017
79. Deputy Michael McGrath asked the Minister for Finance the level of engagement with inspectors from the financial action task force by officials from his Department and officials in the Central Bank as part of the task force’s investigation into money laundering and the financing of terrorism; and if he will make a statement on the matter. [22653/17]
View answerThe Financial Action Task Force (FATF) is an inter-governmental body that sets global standards to assist its member countries to combat money laundering and terrorist financing activities. In a seven to ten year cycle, the FATF organises peer-reviews of its member countries Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures. As part of this process, it conducts an in-depth examination of all legal, regulatory and operational measures recommended by the standards at that particular time.
Ireland was reviewed in 2006 (3rd round evaluation), and was required to take a series of follow-up actions which were signed off by FATF in 2013. The focus of that review was on technical compliance, i.e. ensuring that our legislation was aligned with FATF standards.
Ireland is now undergoing a new ‘mutual evaluation review’ (“MER”) under the FATF’s 4th round. There is a significant change in emphasis in this round, and much more attention is being paid to the effectiveness of a country’s AML/CFT systems. The first step in the review process was to prepare both a technical compliance submission and an effectiveness one in order to provide FATF with a good understanding of our system and how it operates.
In addition, a key aspect of the new assessment approach is that countries are required to have a much better understanding of the money laundering (ML) and terrorist financing (TF) risks they face. Consequently there was a requirement for Ireland to conduct an extensive national risk assessment (“NRA”) exercise in this area. The NRA of ML/TF risks was published in October 2016 and can be found at the following link:
-http://www.finance.gov.ie/sites/default/files/NRA%20FINAL%20for%20Publication.pdf.
The NRA was prepared under the auspices of the Anti-Money Laundering Steering Committee (AMLSC), a multi-agency body chaired by the Department of Finance. The AMLSC’s membership includes the Central Bank, the Department of Justice and Equality, the Financial Intelligence Unit (FIU) within the Garda National Economic Crime Bureau (GNECB), the Officer of the Revenue Commissioners, the Director of Public Prosecutions (DPP), the Criminal Assets Bureau (CAB), as well as a number of other relevant Departments and bodies.
The Department of Finance, in its capacity as chair of the AMLSC and head of the Irish delegation to the FATF, coordinated and hosted the FATF’s two week onsite assessment of Ireland’s AML/CFT framework in November 2016. During this time the main AMLSC members and representatives from the private sector, met with the FATF assessors in a series of meetings which covered issues such as our understanding of AML/CFT risk, supervision of the financial and non-financial areas for these risks including preventative actions been taken by ‘designated persons’ such as credit institutions, the practical application of our AML/CFT legislation etc.
The FATF’s MER, which will be formally signed off in June, seeks therefore to gain a holistic view of the effectiveness of the Irish AML/CFT regime. Once finalised the MER will be published on-line as an external assessment of Ireland’s AML/CFT systems.
Whilst the Department cannot comment on the results of the assessment or the contents of the draft MER in advance of finalisation at the June 2017 FATF Plenary meeting, we are satisfied with how the assessment has been conducted, and are confident that the report will be constructive for Irish AML/CFT policy going forward.
