Ireland

Last updated: 24/10/2014


CENTRAL AUTHORITY FOR REPORTING

 


OTHER ANTI-MONEY LAUNDERING REGULATOR(S)..

 


ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?

Yes, the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010and 2013(the ‘Acts’) apply to “designated persons”, which includes “relevant independent legal professionals” referred to as “lawyers” in this document. 

 


HAS THE THIRD EU MONEY LAUNDERING DIRECTIVE BEEN IMPLEMENTED? IF NOT, WHEN IS IT EXPECTED TO BE IMPLEMENTED?

Yes, the Third EU Money Laundering Directive was implemented into Irish law by statute and has been in force since 15 July 2010. 

 


LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

The Criminal Justice Act 1994, the Criminal Justice (Terrorist Offences) Act, 2005 and the Criminal Justice (Money Laundering and Terrorist Financing) Act, 2010, are all applicable to Irish lawyers.

 


ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?

Yes, visiting lawyers to Ireland would be deemed ‘designated persons’ under the 2010 Act and would be required to comply with Irish law governing anti-money laundering and counter terrorist financing.

 


LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

In 2010, the Law Society of Ireland issued Guidance Notes for Solicitors on Anti-Money Laundering Obligations. These provide details of the anti-money laundering obligations of solicitors together with an examination of the substantive offence of money laundering.

The Irish Department of Finance has also issued guidelinesfor financial institutions. 

 


IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

Yes, both the Law Society of Ireland and the Bar Council of Ireland (each a “competent authority” under Section 60 of the Acts), have an obligation to monitor their respective members and to take measures to secure compliance with the Acts.

These measures may include reporting any knowledge or suspicion that a member of their profession has been or is engaged in money laundering or terrorist financing to the Garda Síochána and Revenue Commissioners.

Each competent authority must also consider whether a member of their profession is able to demonstrate that the requirements of the Acts have been met.

The Law Society of Ireland also has a reporting obligation imposed on it by the Acts to make a report to the Garda Síochána and the Revenue Commissioners where it suspects that a solicitor has not complied with his/her obligation to identify clients, maintain records, introduce procedures to detect and prevent money-laundering, provide training to employees or report a suspicious transaction to the authorities.

As stated above, the Law Society of Ireland has prepared Guidance Notes for Solicitors on Anti-Money Laundering Obligations, which provide recommendations as to good practice. While these Guidance Notes do not constitute a legal interpretation of the Acts, a court may have regard to the Guidance Notes. Accordingly, compliance with these Guidance Notes is strongly recommended for all solicitors and their employees. 

 


DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

The general rule is that the identity of a client must be verified prior to the establishment of a business relationship or the carrying out of a transaction or service prior to carrying out:

  • Occasional transactions which individually or as a series amount to €15,000 or more;
  • A service where there are reasonable grounds to believe there is a real risk of money laundering or terrorist financing; or
  • A service where there are reasonable grounds to doubt the veracity or adequacy of existing customer identification information.

Client Due Diligence may be broken into three categories:

  • Simplified (Section 34 of the Acts);
  • Enhanced (Sections 37 and 39 of the Acts); and
  • Standard (Sections 33 - 35 of the Acts)

The Standard Due Diligence obligations are as follows:

  • Identifying the client and verifying the client's identity on the basis of documents, data or information obtained from a reliable and independent source;
  • Identifying, where applicable, the beneficial owner and taking risk-based and adequate measures to verify his/her/its identity so that the firm is satisfied that it knows who the beneficial owner is, including, as regards legal persons, trusts and similar legal arrangements, taking risk-based and adequate measures to understand the ownership and control structure of the client or prospective client;
  • Obtaining information on the purpose and intended nature of the business relationship; and
  • Conducting ongoing monitoring of the business relationship including scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the firm’s knowledge.  

 


DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?

Yes, the Acts suggest a risk-based approach to due diligence. This allows resources to be focused on clients who pose a greater risk of money laundering and terrorist financing. 

 


ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

Yes, provision for Enhanced Due Diligence is set out at Section 37 and Section 38 of the Acts.  

Designated persons are obliged to carry out due diligence to a more significant degree and will have more extensive ongoing monitoring obligations where the client may have a higher degree of risk of money laundering or terrorist financing.

The extent of additional information required will depend on the level of risk in each case. 

 


ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?

Yes. The Acts provide that a designated person is not required to apply the standard due diligence measures specified if dealing with a “specified customer”. Ongoing monitoring will, however, be required.

A “specified customer” is defined as:

  • A credit institution and certain financial institutions in Ireland, the EU or prescribed third countries;
  • Any listed companies admitted to trading on a regulated market;
  • A public body; and
  • Certain public bodies in other EU Member States and the EU institutions.  

Simplified Due Diligence may not be applied in certain circumstances, e.g.:

  • Where the customer concerned is from a place that is designated as a place having inadequate procedures for detection of money laundering or terrorist financing;
  • Where the designated person has reasonable grounds to believe that there is a real risk that the customer is involved in or the service sought by the customer is for the purpose of, money laundering or terrorist financing; or
  • Where the designated person has reasonable grounds to doubt the veracity of documents or information that the customer has given to confirm his/her identity and the customer cannot provide alternative proof of identity.

Other occasions as set out in Section 34 and Section 37 of the Acts. 
 


ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.

Yes, lawyers and other designated persons are permitted to rely on third party due diligence. However, a lawyer who relies on a relevant third party to apply a client due diligence measure still remains liable for any failure to apply the measure.

A lawyer may rely on a relevant third party to apply any of the required client due diligence measures if:

  • There is an arrangement between the lawyer and the relevant third party under which it has been agreed that the lawyer may rely on the relevant third party to apply any such measure; and
  • The lawyer is satisfied, on the basis of the arrangement, that the relevant third party will forward to him/her on request any documents or information relating to the customer that has been obtained by the relevant third party in applying the measure.  

 


WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

A lawyer is under an obligation to report suspicious transactions when he/she knows, suspects, or has reasonable grounds to suspect, that a person is engaged in an offence of money laundering or terrorist financing. These reporting obligations apply to all staff in a lawyer’s office.

The Acts provide that a lawyer, who knows, suspects or has reasonable grounds to suspect that another person has been or is engaged in an offence of money laundering or terrorist financing shall make a report to the Garda Síochána and the Revenue Commissioners as soon as possible.

However, under Section 24, the Acts only apply to lawyers in respect of certain activities. This means the obligation to retain records or report suspicious transactions only arise where a solicitor participates in the following types of legal work:

By assisting in the planning or execution of transactions for a client concerning:

  • The buying and selling of real property or business entities;
  • The managing of client money, securities or other assets;
  • The opening or management of bank, savings or securities accounts;
  • The organisation of contributions necessary for the creation, operation or management of companies;
  • The creation, operation or management of trusts, companies or similar structures; or
  •  By acting on behalf of and for a client in any financial or real estate transaction.

 


DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

Yes, lawyers have some exemptions available to them under the Acts in that:

  • They are not required to disclose information that is subject to legal advice privilege;
  • They are not obliged to disclose information that they have received obtained in the course of ascertaining a client’s legal position, unless there is a clear intention of furthering a criminal purpose;
  • Communications between a lawyer and client are not to be disclosed without the consent of the client.

Solicitors are also exempt from the obligation to make a suspicious transaction report with regard to information they receive from or obtain in relation to their client:

  • When performing their task of defending or representing that client in or concerning judicial proceedings (whether such information is received or obtained before, during or after such proceedings), or
  •  When advising that client in relation to instituting, avoiding or defending judicial proceedings (whether such information is received or obtained before, during or after such proceedings).

 


DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Yes. Section 47 of the Acts provides that the disclosure of information in accordance with the obligation to make a report shall not be treated, for any purpose, as a breach of any restriction imposed by any other enactment or rule of law on disclosure by the person or any other person on whose behalf the disclosure was made.

Section 112 of the Acts provides that any disclosure to a member of the Garda Síochána or any other person who is concerned in the investigation or prosecution of an offence of money laundering or terrorist financing of information made in good faith shall not be treated for any purpose as a breach of any restriction on the disclosure of information imposed by any other enactment or rule of law.

A report made in good faith by a solicitor or staff member does not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislation, regulatory or administrative provision, and does not involve the solicitor or staff member in liability of any kind. 

 


ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

Section 42(7) of the Acts prohibits lawyers from proceeding with a suspicious transaction or service unless it is not practicable to delay or stop the transaction, or if the lawyer forms the reasonable opinion that failure to proceed might make a client suspicious.

Under Section 23 of the Acts, a lawyer may be authorised by a Superintendent Garda (senior police officer) to proceed with an act that would otherwise be deemed to be money laundering.

Despite this, the Law Society of Ireland strongly recommends its members to cease acting for a client once they suspect a money laundering offence is being committed.

 


IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.

Yes, Section 49 of the Acts prohibits any designated person from making any disclosure that is likely to prejudice an investigation into suspicious transactions and/or transactions involving certain placesunder the Act.

It is also an offence for a lawyer to make any disclosure that may prejudice an investigation into money laundering or terrorist financing.

However, according to the Law Society’s Guidelines, once a lawyer makes a suspicious transaction report, he/she are permitted to immediately cease representing that client. This action will not be regarded as a tipping-off offence as a defence exists under Section 53 of the Acts if the lawyer can prove that they:

  • Acted as a legal adviser;
  • Informed the client that they would no longer provide the required service;
  • Did not provide the service; and
  • Made a report to the authorities. 

 


DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

Before accepting a new client, lawyers must satisfy themselves as to the identity of that client in compliance with Section 33 of the Acts.

However, Section 33(5) of the Acts provides that a new business relationship may be established prior to verifying the identity of that client if the lawyer has reasonable grounds to believe that: 

  • Verifying the identity of the customer or beneficial owner (as the case may be) prior to the establishment of the relationship would interrupt the normal conduct of business; and
  • There is no real risk that the customer is involved in, or the service sought by the customer is for the purpose of, money laundering or terrorist financing.

 However, reasonable steps to verify the identity of the customer or beneficial owner must be undertaken as soon as possible. 

 

ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.

Yes. Under Section 35(3) of the Acts, a designated person shall monitor dealings with a client, including (to the extent reasonably warranted by the risk of money laundering or terrorist financing) by scrutinising transactions and the source of wealth or of funds for those transactions, to determine whether or not the transactions are consistent with:

  • The person’s knowledge of the customer and the customer’s business and pattern of transactions; and
  • Any knowledge that the person may have that the customer may be involved.

Lawyers should manage any risk of money laundering and terrorist financing through on-going monitoring.

Particular care should be taken if the client falls into a higher than standard risk category (i.e., if the client becomes a “politically exposed person”) or if there is a suspicion of money laundering or terrorist financing.

If a client’s activities substantially change during the course of the business relationship, the lawyer may have grounds to report a suspicion of money laundering or terrorist financing.

Lawyers must maintain records of all relevant transactions (by both new and existing clients) and copies of all documents for at least 5 years following the transaction. All information held with regard to the client should be kept up to date.   

 


DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

No information available.

 


HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

No information available

 


HAS THE FINANCIAL ACTION TASK FORCE (FATF) OR A FATF-STYLE REGIONAL BODY CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

Ireland was placed in the regular follow-up process as a result of a partially compliant (PC) rating for certain core and key Recommendations in FATF’s mutual evaluation report of June 2006.

In June 2013, the FATF recognised that Ireland had made significant progress in addressing the deficiencies identified in the 2006 mutual evaluation report and could be removed from the regular follow-up process.

The final June 2013 follow-up reportcontained a detailed description and analysis of the actions taken by Ireland in respect of all Recommendations rated PC or non-compliant (NC) in the 2006 mutual evaluation report – including the core, the key and all other Recommendations. 

 


 

Information provided by:

Cormac Little

Partner

William Fry

E-mail: Cormac.little@williamfry.ie


Sources

  1. CCBE Overview of the implementation of the 2001 Money Laundering Directive, March 2004.
  2. Minister’s press release of 10 May 2010 announcing that the 2010 Act has been signed into law.
  3. Tackling Bribery and Corruption website, by the Department of Justice and Law Reform.
  4. Key Findings of the Mutual Evaluation of Ireland by FATF.



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