European Union

Irish anti-money laundering legislation is largely contained within the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended. This Act and the legislation which has amended it gives effect to the European Union’s Anti-Money Laundering Directives, the latest of which is Directive (EU) 2018/843, commonly referred to as the “Fifth Anti-Money Laundering Directive” or “5AMLD”.

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2021 came into effect in April 2021 and transposed the majority of the Fifth Anti-Money Laundering Directive (5AMLD) into Irish Law.

Elements of the Directive dealing with beneficial ownership of companies and trusts have been transposed by the Department of Finance by way of Statutory Instrument. The establishment of a central register of payment and banks accounts and safe-deposit boxes is also being progressed by the Department of Finance.

In July 2021, the European Commission published a four-part package of draft legislative proposals to strengthen the EU’s AML/CTF rules consisting of:

  • A sixth AML Directive;

  • A new AML Regulation, which will collectively replace the current Fifth AML Directive;

  • A revised Funds Transfer Regulation to replace Regulation (EU) 2015/847, which entered into force with the Fourth AML Directive in 2015. The existing Regulation requires payment service providers to collect and retain information on the sender and receiver of wire transfers. The revised version will extend those obligations to certain crypto asset service providers;

  • A Regulation establishing a new central supervisor for AML matters at EU level, currently referred to as the AML Authority or AMLA.

The legislative process for the package is expected to be completed in 2023 and it is proposed that the Directive and Regulations will take effect, or require transposition, three years later.

FATF

The Financial Action Task Force (FATF) is an inter-governmental body founded in 1989, which sets standards to assist its 39 members (37 jurisdictions and 2 regional organisations) in preventing, detecting and investigating money laundering and the financing of terrorism. FATF’s 40 Recommendations are widely considered the global standard for AML/CFT. Ireland has been a member of FATF since 1991.

Mutual Evaluation Review (MERs)

The FATF regularly monitors the progress of its members in implementing its Recommendations through Mutual Evaluation Reviews. These peer reviews are typically carried out in a seven to ten year cycle and involve an in-depth examination of the legal, regulatory and operational measures in place and the effectiveness of the country’s AML/CFT framework. The findings of the examiners are then discussed at the next plenary and adopted in a Mutual Evaluation report (MER).

Ireland’s most recent Mutual Evaluation Report was published in 2017 with Ireland receiving a broadly positive review as follows:

  • The MER found that “Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing”.
  • The MER noted that Irish competent authorities follow a risk-based approach in the supervision of their respective sectors and have established good cooperation with financial institutions and designated non-financial businesses and professions.
  • The MER deemed coordination, cooperation and the use of financial intelligence to be strong elements of the Irish AML/CFT framework.

The MER also noted areas where further improvements could be made which will require remediation as part of the follow-up process. These are known as ‘Priority Actions’.

In accordance with FATF procedures, Ireland undergoes regular follow-up assessments on the progress made in enhancing its AML/CFT framework since the 2017 MER. In a mark of the progress achieved within just two years, Ireland was upgraded on its compliance with eleven of the FATF Recommendations in its Second Follow-Up Report in 2019. Among the Recommendations upgraded were those in relation to new technologies, jurisdictions identified as ‘higher risk’ and the regulation and supervision of financial institutions.

Ireland was further upgraded on another FATF Recommendation related to Customer Due Diligence in its Fourth Follow-Up Report in 2021. Moreover, a Recommendation on New Technologies was reassessed due to new requirements being added in relation to the regulation of Virtual Asset Service Providers. In a mark of Ireland’s continued progress, Ireland’s previous rating of Largely Compliant on the Recommendation was upheld following an assessment of the new requirements.