Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) (hereafter referred to as “the Act”) identifies particular persons that provide specific business activities in the state as “designated persons”. One such group of designated persons includes tax advisers or external accountants.
Section 24 of the Act defines external accountants as: “a person who by way of business provides accountancy services (other than when providing such services to the employer of the person) whether or not the person holds accountancy qualifications or is a member of a designated accountancy body.” Tax adviser is defined in the same section as: “a person who by way of business provides advice about the tax affairs of other persons.”
Section 60 of the Act determines who is the Competent Authority for anti-money laundering (AML) supervision of Designated Persons engaged in the supply of accountancy/book-keeping services in the State. It provides that if you are a member of a designated accountancy body, then you are supervised by that designated accountancy body for the purposes of AML compliance. Alternatively if you are a body corporate, or a body of unincorporated persons, carrying out accountancy or book-keeping services through officers and members who are members of a designated accountancy body, then you are also supervised by the designated accountancy body for the purpose of AML compliance. A full list of these bodies is provided below.
List of designated accountancy bodies:
Association of Chartered Certified Accountants (ACCA)
Institute of Chartered Accountants in England and Wales (ICAEW)
Chartered Institute of Management Accountants (CIMA)
Association of International Accountants (AIA)
The Institute of Certified Public Accountants (CPA)
Chartered Accountants Ireland (CAI)
Chartered Institute of Public Finance and Accountancy (CIPFA)
Institute of Chartered Accountants of Scotland (ICAS)
If you provide any of the following services and are not already regulated by a designated competent authority for anti-money laundering purposes you fall to the supervision of the Anti-Money Laundering Compliance Unit of the Department of Justice (AMLCU).
- Tax Advice
- Tax Returns
- Accounting Services
The Act place a number of legal obligations on designated persons to guard against them being used for the purpose of money laundering or terrorist financing. The key obligations are:
Customer Due Diligence (CDD) – Sections 33 to 39
CDD requires that you are satisfied as to the identification and verification of the customer’s identity. CDD also requires you to be alert to any activity that could be related to Money Laundering and or Terrorist Financing.
Sections 33 to 39 of the Act provide the CDD measures that you must take in order to comply with obligations in respect of identifying and verifying customers, persons purporting to act on behalf of customers and beneficial owners.
Evidence of identification and verification of the customer’s identity is based on documents and information that the designated person has reasonable grounds to be relied upon. For instance, documents from a government source or any prescribed class of documents. You should set out in your policies and procedures what level of documentation or information you are willing to accept and the circumstances under which you are willing to accept them in order to identify and verify the identity of a customer.
You must keep these documents on file and make available for examination by Authorised Officers of the Anti-Money Laundering Compliance Unit (AMLCU) at all future AML compliance inspections.
Ongoing Monitoring – Section 35
A designated person shall monitor any business relationship that it has with a customer to the extent reasonably warranted by the risk of money laundering or terrorist financing.
Under Section 36 of the Act and in accordance with a designated person’s own policies and procedures, they shall examine the background and purpose of all complex or unusually large transactions, and all unusual patterns of transactions which have no apparent economic or lawful purpose.
Business Risk Assessment – Section 30A
A designated person shall carry out a business risk assessment to identify and assess the risks of money laundering and terrorist financing involved in carrying on the designated person’s business activities. Your business risk assessment should contain, but not be limited to
- the type of customer that the designated person has;
- the products and services that the designated person provides;
- the countries or geographical areas in which the designated person operates;
- the type of transactions that the designated person carries out;
- the delivery channels that the designated person uses;
- other prescribed additional risk factors.
The Business Risk Assessment must be approved by senior management, must be documented, and kept up-to-date. A record of the Business Risk Assessment must be made available on request to the relevant competent authority.
Customer Risk Assessment – Section 30B
A designated person shall identify and assess the risk of money laundering and terrorist financing in relation to each customer or transaction concerned, having regard to at least the following:
- the relevant business risk assessment,
- the matters specified in section 30A(2),
- any relevant risk variables, including at least the following:
- the purpose of an account or relationship;
- the level of assets to be deposited by a customer or the size of transactions undertaken;
- the regularity of transactions or duration of the business relationship;
- any additional prescribed risk variable,
- the presence of any factor specified in Schedule 3 or prescribed under section 34A suggesting potentially lower risk,
- the presence of any factor specified in Schedule 4, and
- any additional prescribed factor suggesting potentially higher risk.
Customers should have their own individual risk assessment rating assigned to them e.g. low, low-medium, medium, medium-high or high risk.
Policies and Procedures – Section 54
A designated person shall adopt internal policies, controls and procedures in relation to the designated person’s business to prevent and detect the possibility of money laundering and terrorist financing occurring.
Internal policies, controls and procedures should deal with:
- the identification, assessment, mitigation and management of risk factors,
- customer due diligence measures,
- monitoring transactions and business relationships,
- the identification and scrutiny of complex, large transactions, unusual patterns of transactions that have no apparent economic or visible lawful
- measures to be taken to prevent the use for money laundering or terrorist financing
- reporting (including the reporting of suspicious transactions),
- record keeping,
- measures to be taken to keep documents and information relating to customers up to date,
- measures to be taken to keep documents and information relating to risk assessments up to date,
A designated person shall ensure that persons involved in the conduct of the designated person’s business are instructed on the law relating to money laundering and terrorist financing and that appropriate ongoing training on identifying unusual transactions or other suspicious activity is provided.
Record Keeping – Section 55
A designated person shall keep records evidencing the procedures applied, and information obtained for each customer for the purposes of identifying and verifying the identity of customers or beneficial owners. A designated person shall also keep records evidencing the history of services and transactions carried out in relation to each customer of the designated person. These records must be kept for a period of not less than five years.
Suspicious Transaction Reporting (STR) – Section 42
You are required to report to the Financial Intelligence Unit (“FIU”) of An Garda Síochána and the Revenue Commissioners if you know, suspect or have reasonable grounds to suspect, on the basis of information obtained in the course of carrying on your business that another person has been or is engaged in an offence of Money Laundering or Terrorist Financing.
You are required to make the report as soon as practicable after acquiring that knowledge or forming that suspicion, or acquiring those reasonable grounds to suspect, that the other person has been or is engaged in Money Laundering or Terrorist Financing.
You are also required to report transactions connected with high-risk third countries to the FIU and to the Revenue Commissioners.
Report your knowledge or suspicions to An Garda Síochána and the Revenue Commissioners using a ‘Suspicious Transactions Report form’ (STR) form. This can be obtained by registering with Go AML (https://fiu-ireland.ie/Home). A copy of this form should then posted to the Revenue Commissioners, Suspicious Transactions Reports Office, Block D, Ashtowngate, Navan Road, Dublin 15.
If you fail to comply with your reporting obligations under the Act, you may be liable on summary conviction, to a fine not exceeding €5,000 or imprisonment for a term not exceeding 12 months (or both), or on conviction on indictment, to a fine or imprisonment for a term not exceeding 5 years (or both).