Ireland 18 Months Overdue in Applying EU Money Laundering Rules – Chris MacManus MEP

Sinn Féin MEP Chris MacManus has said Ireland is now 18 months late in implementing crucial EU anti-money laundering legislation. “Such delays do not help the country’s reputation given the massive financial activity that goes through Dublin” said MacManus.

The information was confirmed in a parliamentary reply to Sinn Féin Deputy Louise O’Reilly.

MEP MacManus said:

“Delays of this nature and still with no set date for implementation, distinguish Ireland as lagging way behind in tackling money laundering. Given the huge financial activity – including shadow banking – that takes place in Dublin, this is not a good look to say the least and potentially leaves the state facing substantive financial penalties.  

“The EU has already called ‘Strike One’ on the government by issuing a Letter of Formal Notice in May 2020. Now over a year later, the Fifth Anti-Money Laundering Directive (AMLD) is still not in effect. In his reply, the Minister pointed to technical issues but the fact is that 19 of the other 26 Member States have implemented the directive in full.

“Unfortunately, given that Ireland was ultimately fined for late implementation of the previous Fourth Anti-Money Laundering Directive we must step up and ensure that when it comes to issues of financial crime we are to the fore, not straggling behind. The Fifth AMLD includes critical measures to tackle new challenges such as cryptocurrencies and must be fully in place as soon as possible. It is not just reputational issue but one of practical concern.”

PQ:

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For Written Answer on : 06/07/2021
Question Number(s): 433 Question Reference(s): 36515/21
Department: Justice
Asked by: Louise O’Reilly T.D.
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QUESTION

To ask the Minister for Justice the status of Ireland’s implementation of EU anti-money laundering rules; if the State is subject to any ongoing legal actions by the EU Commission regarding delays in implementation; the fines paid to date by Ireland in the past five years due to a failure to implement or delay in implementation of EU anti-money laundering legislation; and if she will make a statement on the matter.

REPLY

The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 transposes the criminal justice elements and several non-criminal justice elements of the Fifth EU Anti-Money Laundering Directive. This Act was signed by the President on 18 March 2021 and came into effect on 23-24 April 2021. 

This Directive builds upon the Fourth Anti-Money Laundering Directive to better equip the Union to prevent the financial system from being used for money laundering and terrorist financing. 

As the Deputy may be aware, this Act ensures that our regulatory framework keeps pace with the increasing integration of financial flows in the internal market, the evolving trends, technological developments and the prevention of organised crime. It enhances the range of measures countering money laundering by reflecting modern developments. It will also help to bring us in line with our EU obligations. 

While the Act transposes many of the elements of the Fifth Anti-Money Laundering Directive, the Department of Finance is also engaged in giving effect to other provisions of the Directive. The Department of Finance is currently progressing elements of the transposition including with respect to the centralised bank account registry. I am advised that a central register of trusts, required under Article 31 of the Directive was established in April 2021. This register is operated by the Revenue Commissioners and will begin to accept filings in the coming months. A central register of bank and payment accounts and safe-deposit boxes under Article 32a, which will be operated by the Central Bank of Ireland, is currently being progressed. 

The EU Commission issued a Letter of Formal Notice on 14 May 2020, which is the first stage of infringement proceedings. Ireland had four months to reply, which it did in September 2020. The second stage would be the issue of a Reasoned Opinion, and only at the third stage (a reference to the Court of Justice) would possible financial penalties be applicable. 

Ireland has informed the Commission of the significant progress made in transposing this instrument into Irish law. The Commission received comprehensive detail regarding the various national provisions which transpose or will transpose each of the provisions of the Directive including the text of the Act. 

Ireland will continue to engage with the Commission and keep the Commission informed of our progress in transposing the Fifth Directive. 

The Deputy will be aware that in 2020, Ireland was ordered by the Court of Justice of the European Union to pay a fine of €2m in respect of its failure to fully transpose the previous Directive (the Fourth Anti-Money Laundering Directive) on time. The Court’s decision related to a period between July 2017 and the enactment of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act in November 2018. ENDS