Criminal Justice (Money Laundering) Bill, 2008

SCHEME

CRIMINAL JUSTICE (MONEY LAUNDERING) BILL, 2008

ARRANGEMENT OF SECTIONS

PART I PRELIMINARY AND GENERAL

HEAD 1 SHORT TITLE AND COMMENCEMENT

HEAD 2 DEFINITIONS

HEAD 3 DESIGNATED PERSONS

HEAD 4 REGULATIONS

HEAD 5 REPEALS

PART 2 OFFENCE OF MONEY LAUNDERING

HEAD 6 INTERPRETATION

HEAD 7 OFFENCE OF MONEY LAUNDERING

HEAD 8 LIABILITY FOR OFFENCES BY BODIES CORPORATE AND UNINCORPORATED

HEAD 9 JURISDICTION

HEAD 10 PENALTIES FOR MONEY LAUNDERING

PART 3 CUSTOMER DUE DILIGENCE

HEAD 11 CASES WHERE APPLICATION OF CUSTOMER DUE DILIGENCE MEASURES REQUIRED

HEAD 12 CUSTOMER DUE DILIGENCE MEASURES TO BE APPLIED

HEAD 13 NON-COMPLIANCE WITH CUSTOMER DUE DILIGENCE MEASURES

HEAD 14 SIMPLIFIED CUSTOMER DUE DILIGENCE

HEAD 15 ENHANCED CUSTOMER DUE DILIGENCE MEASURES

HEAD 16 SHELL BANKS, THREATS OF MONEY LAUNDERING OR TERRORIST FINANCING

PART 4 THIRD PARTIES

HEAD 17 DEFINITION -THIRD PARTIES

HEAD 18 RELIANCE ON A THIRD PARTY

PART 5 REPORTING OBLIGATIONS

HEAD 19 REPORTING OBLIGATIONS – GENERAL

HEAD 20 ORDER TO SUSPEND TRANSACTIONS

HEAD 21 REPORTING OF TRANSACTIONS WITH DESIGNATED STATES

HEAD 22 REPORTING OBLIGATIONS – COMPETENT AUTHORITIES

HEAD 23 PROTECTION FROM DISCLOSURE

HEAD 24 PROHIBITION OF DISCLOSURE

PART 6 RECORD KEEPING, PROCEDURES, TRAINING

HEAD 25 RECORD KEEPING

HEAD 26 APPLICATION OF CUSTOMER DUE DILIGENCE AND RECORD KEEPING – THIRD COUNTRIES

HEAD 27 INTERNAL PROCEDURES AND TRAINING

PART 7 COMPLIANCE MONITORING AND STATISTICS

HEAD 28 COMPLIANCE MONITORING OF DESIGNATED PERSONS BY COMPETENT AUTHORITIES

HEAD 29 POWER OF STATE COMPETENT AUTHORITY TO REQUIRE PRODUCTION OF RECORDS

HEAD 30 POWER OF STATE COMPETENT AUTHORITY TO GIVE DIRECTIONS

HEAD 31 ENFORCEMENT BY BANK

HEAD 32 STATISTICS AND REPORTS

PART 8 POWERS OF STATE COMPETENT AUTHORITY TO APPOINT AUTHORISED OFFICERS, ETC.

HEAD 33 INTERPRETATION

HEAD 34 POWER TO APPOINT AUTHORISED OFFICERS

HEAD 35 POWERS OF AUTHORISED OFFICERS

HEAD 36 WARRANTS

PART 9 REGULATION OF TRUST AND COMPANY SERVICE PROVIDERS

HEAD 37 DEFINITIONS

HEAD 38 PERSON PROHIBITED FROM CARRYING ON DESIGNATED BUSINESS WITHOUT AUTHORISATION.

HEAD 39 APPLICATION FOR AUTHORISATION

HEAD 40 GRANT AND REFUSAL OF APPLICATION FOR AUTHORISATION.

HEAD 41 EFFECT AND TERM OF AUTHORISATION.

HEAD 42 MINISTER MAY IMPOSE CONDITIONS WHEN GRANTING AN APPLICATION FOR AN AUTHORISATION.

HEAD 43 MINISTER MAY AMEND AUTHORISATION

HEAD 44 OFFENCE TO FAIL TO COMPLY WITH CERTAIN CONDITIONS AND REQUIREMENTS.

HEAD 45 REVOCATION OF AUTHORISATION BY MINISTER ON APPLICATION OF HOLDER.

HEAD 46 REVOCATION OF AUTHORISATION BY MINISTER OTHERWISE THAN ON APPLICATION OF HOLDER.

HEAD 47 MINISTER MAY DIRECT HOLDER OF AUTHORISATION TO SUSPEND BUSINESS

HEAD 48 MINISTER TO PUBLISH NOTICE OF REVOCATION OR SUSPENSION.

HEAD 49 MINISTER TO KEEP REGISTER OF PERSONS AUTHORISED TO CARRY ON DESIGNATED BUSINESS.

HEAD 50 MINISTER TO PUBLISH LIST OF PERSONS AUTHORISED TO CARRY ON DESIGNATED BUSINESS.

HEAD 51 HOLDERS OF AUTHORISATIONS TO KEEP CERTAIN RECORDS.

HEAD 52 MINISTER MAY MAKE REGULATIONS FOR PURPOSES OF PART 9.

SCHEDULE 1 Annex 1 to Directive 2006/48/EC

SCHEDULE 2 Consequential amendments

SCHEDULE 3 List of persons or products referred to in Head 14 Subhead (1) – Simplified Customer Due Diligence

PART 1 PRELIMINARY AND GENERAL

HEAD 1 SHORT TITLE AND COMMENCEMENT

Provide that –

(1) This Bill may be cited as the Criminal Justice (Money Laundering) Bill.

(2) This Bill shall come into operation on such day or days as may be appointed by order or orders made by the Minister, either generally or with reference to any particular purpose or provision, and different days may be so appointed for different purposes and different provisions of the Bill.

HEAD 2 DEFINITIONS

“auctioneer” has the meaning assigned to it by section 127 of the Finance Act 1995 (No.8 of 1995).

“auditor” means a person who is qualified for appointment as an auditor or public auditor under section 187 of the Companies Act 1990 and who holds such appointment.

“Bank” means “Central Bank and Financial Services Authority of Ireland”

“beneficial owner” means the natural person(s) who ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted. The beneficial owner shall at least include:

(a) in the case of corporate entities:

(i) the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership or control over a sufficient percentage of the shares or voting rights in that legal entity, including through bearer share holdings, other than a company listed on a regulated market that is subject to disclosure requirements consistent with European Community legislation or subject to equivalent international standards; a percentage of 25 % plus one share shall be deemed sufficient to meet this criterion;

(ii) the natural person(s) who otherwise exercises control over the management of a legal entity:

(b) in the case of legal entities, such as foundations, and legal arrangements, such as trusts, which administer and distribute funds:

(i) where the future beneficiaries have already been determined, the natural person(s) who is the beneficiary of 25 % or more of the property of a legal arrangement or entity;

(ii) where the individuals that benefit from the legal arrangement or entity have yet to be determined, the class of persons in whose main interest the legal arrangement or entity is set up or operates;

(iii) the natural person(s) who exercises control over 25 % or more of the property of a legal arrangement or entity.

“business relationship” means a business, professional or commercial relationship which is connected with the professional activities of the institutions and persons designated in Head 3 and which is expected at the time when the contact is established to have an element of duration.

“Competent Authority” shall include State competent authorities and self-regulatory competent authorities.

“State competent authority” shall include -

(i) In the case of credit and financial institutions, the Bank

(ii) In the case of auctioneers and real estate agents the Property Services Regulator

(iii) In the case of

(a) trust or company service providers who are not included under (i) above or who are not regulated by a self regulatory competent authority.

(b) tax advisors, accountants or insolvency practitioners who are not regulated by a self regulatory competent authority.

(d) dealers in high value goods who are designated persons, and

(e) any other designated person not included under (i) or (ii) above and not regulated by a self regulatory competent authority,

the Minister.

“self regulatory competent authority” shall include –

(i) in the case of auditors, accountants and insolvency practitioners who are members of a prescribed accountancy body, the relevant prescribed accountancy body.

(ii) In the case of solicitors, the Law Society of Ireland.

“credit institution” means a credit institution, as defined in the first subparagraph of Article 4(1) of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions, including branches (within the meaning of Article 4(3) of that Directive) in an EEA State of a credit institution whose head office is situated in an EEA or non-EEA State.

“designated person” means a person designated under Head 3 of this Scheme.

‘Directive’ means Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

“external accountant” means a person carrying out the trade or profession of an accountant (other than an accountant who provides a service in his or her capacity as an accountant to a person who employs him or her under a contract of service) whether or not such a person is a member of, or subject to, a prescribed accountancy body and whether or not such a person holds an educational or vocational qualification in respect of the accountancy profession.

“financial institution” means:

(a) an undertaking other than a credit institution which carries out one or more of the operations included in points 2 to 12 and point 14 of Annex 1 to Directive 2006/48/EC, (the text of which is set out in Schedule 1 to this Act) including the activities of currency exchange offices (bureaux de change) and of money transmission or remittance offices other than an undertaking whose only business is trading in one or more of the products listed in point 7 of Annex 1 to Directive 2006/48/EC where the undertaking does not have a customer other than a customer which is a member of the same group as the undertaking.

(b) an insurance company duly authorised in accordance with Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance, in so far as it carries out activities covered by that Directive.

(c) an investment firm as defined in Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments.

(d) a collective investment undertaking marketing (of) its units or shares.

(e) an insurance intermediary as defined in Article 2(5) of Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation, with the exception of intermediaries as mentioned in Article 2(7) of that Directive, when they act in respect of life insurance and other investment related services.

(f) Branches, when located in an EEA State, of financial institutions as referred to in points (a) to (e), whose head offices are inside or outside the EEA.

“insolvency practitioner” means a person acting as a liquidator, receiver, or examiner to a legal person or as a trustee in bankruptcy proceedings.

“Minister” means Minister for Justice, Equality and Law Reform.

“money laundering” shall be construed in accordance with Head 7 of this Scheme.

“politically exposed person” means natural persons who are or have been entrusted with prominent public functions and immediate family members, or persons known to be close associates, of such persons and shall include-

(a) Heads of State, heads of government, ministers and deputy or assistant ministers;

(b) members of Parliaments;

(c) members of supreme courts, of constitutional courts or of other high-level judicial bodies whose decisions are not subject to further appeal, except in exceptional circumstances;

(d) members of courts of auditors or of the boards of central banks;

(e) ambassadors, charges d’affaires and high-ranking officers in the armed forces;

(f) members of the administrative, management or supervisory bodies of State-owned enterprises.

None of the categories set out in (a) to (f) above shall be understood as covering middle ranking or more junior officials.”

The categories set out in (a) to (f) above shall, where applicable, include positions at Community and international level.

“immediate family members” shall include

(a) the spouse;

(b) any partner considered by national law as equivalent to the spouse;

(d) the parents.

“persons known to be close associates” shall include

(a) any natural person who is known to have joint beneficial ownership of legal entities or legal arrangements, or any other close business relations with a politically exposed person;

(b) any natural person who has sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the benefit de facto of a politically exposed person.

‘Property’ includes money and all other property, real or personal, heritable or moveable, including choses-in-action and other intangible or incorporeal property and, in relation to an offence of financing terrorism, includes funds.

“Property services” means any of the following services:

(a) auction of private property including land;

(b) purchase or sale, by whatever means, of any property, estate or interest in land;

(d) provision of property management services;

but does not include a local authority or other public body providing property services as part of its statutory functions.

“prescribed accountancy body” means

(a) a recognised accountancy body for the purposes of section 187 of the Companies Act 1990.

(b) any other body of accountants that is prescribed under section 48 (1) (a) of the Companies (Auditing and Accounting Act 2003)

“Public Body” means a Government Department or Office, Regional or Local Authority, or any body established by statute or whose chief officer or governing body is appointed by a Minister of the Government.

“real estate agent” means a person engaged in property services on behalf of another as an independent contractor or a person who employs persons whose principal function is the provision of property services.

“shell bank” means a credit institution, or an institution engaged in equivalent activities, incorporated in a jurisdiction in which it has no physical presence involving meaningful decision-making and management, and which is unaffiliated with a regulated financial group.

“solicitor” has the meaning assigned to it by section 3 (inserted by section 3 of the Solicitors (Amendment) Act 1994 (No.27 of 1994)) of the Solicitors Act 1954.

“tax advisor” means a person carrying out the trade or profession of providing advice and support in respect of the taxation system to individuals, corporate bodies and other legal entities whether or not such a person is a member of a representative body, or is subject to a regulatory body in respect of that trade or profession and whether or not such a person holds an educational or vocational qualification in respect of that trade or profession. This definition shall not apply to employees or servants of the Office of the Revenue Commissioners in respect of their work for that body.

“terrorist financing” shall be construed in accordance with section 13 of the Criminal Justice (Terrorist Offences) Act 2005.

“trust and company service providers” means any person which by way of business provides any of the following services to third parties-

(a) forming companies or other legal persons;

(b) acting as, or arranging for another person to act as -

(i) a director or secretary of a company;

(ii) a partner of a partnership; or

(iii) a similar position in relation to other legal persons;

(c) providing a registered office, business address, correspondence or administrative address and other related services for a company, a partnership or any other legal person or arrangement;