James Browne (Wexford, Fianna Fail) | Oireachtas source

I move amendment No. 7:

In page 15, between lines 20 and 21, to insert the following: "Virtual asset service providers

24. The Act of 2010 is amended, in Part 4, by the insertion of the following Chapter after Chapter 9:

"CHAPTER 9A

Virtual Asset Service Providers

Interpretation

106A.In this Chapter—

'Act of 1942' means the

'Bank' means the Central Bank of Ireland;

'FATF' means the Financial Action Task Force on Money Laundering and

Countering the Financing of Terrorism established by the Paris G7 Summit of 1989;

'prescribed' means prescribed by regulations made by the Bank;

'principal officer' means—

(a) in relation to a body corporate, any person who is a director, manager, secretary or other similar officer of the body corporate or any person purporting to act in such a capacity, or

(b) in relation to a partnership—

(i) any person who is a partner in, or a manager or other similar officer of, the partnership or any person purporting to act in such a capacity, and

(ii) in a case where a partner of the partnership is a body corporate, any person who is a director, manager, secretary or other similar officer of such a partner or any person purporting to act in such a capacity;

'registration' means a registration granted by the Bank under this Chapter to permit a person to carry on business as a virtual asset service provider and, if such a permission is amended under this Chapter, means the registration as amended.

Fit and proper person

106B.For the purposes of this Chapter, a person is not a fit and proper person if any of the following apply:

(a) the person has been convicted of any of the following offences:

(i) money laundering;

(ii) terrorist financing;

(iii) an offence involving fraud, dishonesty or breach of trust;

(iv) an offence in respect of conduct in a place other than the State that would constitute an offence of a kind referred to in subparagraph (i), (ii) or (iii) if the conduct occurred in the State;

(b) in a case where the person is an individual, the person is under 18 years of age;

(c) the person—

(i) has suspended payments due to the person's creditors,

(ii) is unable to meet other obligations to the person's creditors, or

(iii) is an individual who is an undischarged bankrupt;

(d) the person is otherwise not a fit and proper person.

Registrations held by partnerships

106C.(1) A reference in a relevant document to a holder or proposed holder of a registration includes, in a case where the holder or proposed holder is a partnership, a reference to each partner of the partnership unless otherwise specified.

(2) A reference in subsection (1) to a relevant document is a reference to any of the following:

(a) this Chapter;

(b) a regulation made for the purposes of this Chapter;

(c) a registration or condition of a registration;

(d) any notice or direction given under this Chapter;

(e) any determination under this Chapter.

(3) Without prejudice to the generality of subsection (1) or section 111, where any requirement is imposed by or under this Chapter on the holder of a registration, and failure to comply with the requirement is an offence, each partner of a partnership (being a partnership that is the holder of a registration) who contravenes the requirement is liable for the offence.

Scope of Bank's supervision – performance of certain functions

106D. (1) The functions conferred on the Bank under—

(a) Parts II, IIIC, VIIA, VIIIA and IX of the Act of 1942,

(b) Parts 3 and 4 of the and

(c) Parts 2, 3, 7 and 9 of the shall, in addition to being performable for the purposes to which those provisions relate, be performable for the purposes of ensuring compliance with the Fourth Money Laundering Directive, the Fifth Money Laundering Directive and the Recommendations of FATF.

(2) The Minister, where he or she considers it appropriate to do so and following consultation with the Bank, may make regulations conferring additional functions connected with the functions conferred by or under any enactment on the Bank for the purpose of ensuring compliance with the Fourth Money Laundering Directive, the Fifth Money Laundering Directive and the Recommendations of FATF.

(3) Regulations under subsection (2) may provide for such additional functions as may be necessary for the more effective implementation of Recommendations made from time to time by FATF to address and mitigate the risks related to money laundering and terrorist financing.

Obligation on virtual asset service providers to register with Bank

106E. (1) A person shall not carry on business as a virtual asset service provider, claim to be a virtual asset service provider or represent that the person is a virtual asset service provider unless the person is registered with the Bank under this Chapter.

(2) A person who contravenes subsection (1) commits an offence and is liable—

(a) on summary conviction to a class A fine or imprisonment for a term not exceeding 12 months or both, or

(b) on conviction on indictment, to a fine not exceeding €500,000 or imprisonment for a term not exceeding 5 years or both.

Transitional provision for existing virtual asset service providers

106F. (1)Notwithstanding section 106E, a person carrying on business as a virtual asset service provider immediately before the coming into

operation of this Chapter, is taken to be registered to carry on business as a virtual asset service provider until the Bank has granted or refused an application to register the person, provided that the person applies to the Bank under section 106G for registration, no later than 3 months after that section comes into operation.

(2) Where a person is taken to be registered to carry on business as a virtual asset service provider under subsection (1), the Bank may do either or both of the following:

(a) impose on that person such conditions or requirements or both as the Bank considers appropriate relating to the proper and orderly regulation and supervision of virtual asset service providers;

(b) direct that person not to carry on business as a virtual asset service provider for such period (not exceeding 3 months) as is specified in the direction.

(3) A condition or requirement imposed, or a direction given, under this section is an appealable decision for the purposes of Part VIIA of the Act of 1942.

Application for registration

106G. (1) An individual, body corporate or partnership may apply to the Bank to be registered under this section.

(2) An application for registration under this section shall—

(a) be in a form provided or specified by the Bank,

(b) specify the name of—

(i) the applicant,

(ii) in a case where the applicant is a body corporate or partnership, any principal officer of the body corporate or partnership (as the case may be), and

(iii) any person who is, or is proposed to be, a beneficial owner of the applicant,

(c) specify the address at which the business of a virtual asset service provider is proposed to be carried on,

(d) contain such other information, and be accompanied by such documents, as the Bank may reasonably request including, for the purposes of the Bank assessing whether persons referred to in paragraph (b) can comply with the provisions of Part 4 and are fit and proper persons, such information and documents as the Bank may reasonably require relating to the steps taken by the applicant to ensure that those persons are fit and proper persons and the process of verification carried out by the applicant for the purposes of so ensuring, and

(e) be accompanied by such fees as are payable in accordance with section 32E of the Act of 1942 in respect of the performance by the Bank of its functions under the Act of 2010.

(3) For the purposes of assessing whether a beneficial owner is a fit and proper person, the Bank may request the person by notice in writing to attend before a specified officer or employee of the Bank for interview.

(4) Nothing in this section or any notice given by the Bank under this section requires a person—

(a) to produce to the Bank a document that the person could not have been compelled to produce to a court,

(b) to give to the Bank information that the person could not have been compelled to give to a court, or

(c) to answer a question (either in writing or at interview) that the person could not have been compelled to answer in a court.

(5) The Bank may, by written notice given to an applicant, require the applicant to provide, within the period of not less than 14 days specified in the notice, such additional information and documents as are reasonably necessary to enable the Bank to determine the application for registration.

Grant and refusal of applications for registration

106H. (1) The Bank may refuse an application for registration under section 106G only if—

(a) the application does not comply with the requirements of section 106G,

(b) the applicant does not provide any additional documents or information in accordance with a notice given under section 106G,

(c) the Bank has reasonable grounds to be satisfied that information given to the Bank by the applicant in connection with the application is false or misleading in any material particular,

(d) the Bank has reasonable grounds to be satisfied that any of the following persons, is not a fit and proper person:

(i) the applicant;

(ii) in a case in which the applicant is a body corporate or partnership, any principal officer of the body corporate or partnership (as the case may be);

(iii) any person who is, or is proposed to be, a beneficial owner of the applicant,

(e) the applicant has failed to satisfy the Bank that the applicant would,

if registered, comply with the obligations imposed on the applicant under this Chapter, or as a designated person under this Part,

(f) the applicant has failed to satisfy the Bank that the applicant's business risk assessment, policies and procedures are adequate or fit for purpose,

(g) the applicant has failed to satisfy the Bank that it has in place the resources, procedures and arrangements for the provision of the business of a virtual asset service provider and the performance of activities, taking into account the nature, scale and complexity of its business and all the obligations that the provider has to comply with as a designated person under this Act,

(h) the applicant has failed to satisfy the Bank that the applicant would, if registered, comply with each of the following:

(i) any conditions that the Bank would have imposed on the registration concerned, if the Bank had granted the application;

(ii) any prescribed requirements referred to in section 106M,

(i) the applicant is so structured, or the business of the applicant is so organised, that the applicant is not capable of being regulated under this Chapter, or as a designated person under this Part, to the satisfaction of the Bank,

(j) where the applicant fails to demonstrate, where applicable, that it can manage and mitigate the risks of engaging in activities that involve the use of anonymity-enhancing technologies or mechanisms and other technologies that obfuscate the identity of the sender, recipient, holder or beneficial owner of a virtual asset,

(k) in a case where the applicant is a body corporate, the body corporate is being wound up,

(l) in a case where the applicant is a partnership, the partnership is dissolved by the death or bankruptcy of a partner or because of the operation of a provision of theor otherwise,

(m) in a case where any person referred to in paragraph (d) has been registered to carry on business as a virtual asset service provider in another Member State, and an authority of the other Member State, that performs functions similar to those of the Bank under this Chapter, has terminated the permission of the person to carry on business as a virtual asset service provider in the other Member State,

(n) in a case where the applicant is a subsidiary of a body corporate has been registered to carry on business as a virtual asset service provider in another Member State, and an authority of the other Member State, that performs functions similar to those of the Bank under this Chapter, has terminated the permission of the body corporate to carry on business as a virtual asset service provider in the other Member State, or

(o) there are objective and demonstrable grounds for believing that the management body of the applicant may pose a threat to its sound and prudent management and to the adequate consideration of its clients and the integrity of the market.

(2) If the Bank proposes to refuse an application, the Bank shall serve on the applicant a notice in writing—

(a) specifying the grounds on which the Bank proposes to refuse the application, and

(b) informing the applicant that the applicant may, within 21 days after the service of the notice, make written representations to the Bank showing why the Bank should grant the application.

(3) Not later than 21 days after a notice is served on an applicant under subsection (2), the applicant may make written representations to the Bank showing why the Bank should grant the application.

(4) The Bank may refuse an application only after having considered any representations made by the applicant in accordance with subsection (3).

(5) As soon as practicable after refusing an application, the Bank shall serve a written notice of the refusal on the applicant including a statement setting out the grounds on which the Bank has refused the application.

(6) A decision of the Bank to refuse an application under section 106G is an appealable decision for the purposes of Part VIIA of the Act of 1942.

(7) If the Bank does not refuse the application, it shall grant it and, on granting the application, the Bank shall—

(a) record the appropriate particulars of the applicant in the register of persons permitted by the Bank to carry on business as a virtual asset service provider, and

(b) issue the applicant with a registration that permits the applicant to carry on business as a virtual asset service provider.

Bank may impose conditions when granting an application for registration

106I. (1) In granting an application for registration under this Chapter, the Bank may impose on the holder of the registration any conditions that the Bank considers necessary for the proper and orderly regulation of the holder's business as a virtual asset service provider and, in particular, for preventing the business from being used to carry out money laundering or terrorist financing.

(2) The Bank shall specify any such conditions in the registration granted to the holder or in one or more documents annexed to that registration.

(3) If, under this section, the Bank imposes any conditions on a registration, the Bank shall serve on the holder of the registration, together with the registration, a written notice of the imposition of the conditions that includes a statement setting out the grounds on which the Bank has imposed the conditions.

(4) A decision of the Bank to register a person subject to conditions under subsection (1) is an appealable decision for the purposes of Part VIIA of the Act of 1942.

Terms of registration

106J. (1) A registration comes into force on the day on which the registration is granted, or, if a later date is specified in the registration, on that later date, whether or not an appeal against any conditions of registration is made under section 106I.

(2) A registration remains in force, unless sooner revoked under this Chapter from the date on which it comes into force.

Bank may amend registration

106K. (1) The Bank may amend a registration granted under this Chapter by varying, replacing or revoking any conditions or by adding a new condition if the Bank considers that the variation, replacement, revocation or addition is necessary for the proper and orderly regulation of the business of the holder of the registration as a virtual asset service provider and, in particular, for preventing the business from being used to carry out money laundering or terrorist financing.

(2) If the Bank proposes to amend a registration under this section, the Bank shall serve on the holder of the registration, a notice in writing informing the holder of the Bank's intention to amend the registration.

(3) The notice shall—

(a) specify the proposed amendment, and

(b) inform the holder of the registration that the holder may, within 21 days after service of the notice, make written representations to the Bank showing why the Bank should not make that amendment.

(4) Not later than 21 days after a notice is served under subsection (2) on the holder of a registration, the holder may make written representations to the Bank showing why the Bank should not amend the registration.

(5) The Bank may amend a registration only after having considered any representations to the Bank made in accordance with subsection (4) showing why the Bank should not amend the registration.

(6) The Bank shall serve written notice of any amendment of a registration

on the holder of the registration including a statement setting out the grounds on which the Bank has amended the registration.

(7) A decision of the Bank to amend a registration granted under this Chapter is an appealable decision for the purposes of Part VIIA of the Act of 1942.

(8) The amendment of a registration under this section takes effect from the date of the notice of amendment or, if a later date is specified in the notice, from that date, whether or not an appeal against the amendment is made under this section.

Regulatory disclosure statement

106L. (1) Subject to subsection (2), the holder of a registration shall include a statement (in this section referred to as a 'regulatory disclosure statement') in the prescribed form in all advertisements for its services stating that the holder of the registration is registered and supervised by the Bank for anti-money laundering and countering the financing of terrorism purposes only.

(2) For the purposes of this section, the Bank may prescribe the form of the regulatory disclosure statement including its size and colour and font type and the manner in which the disclosure statement shall be displayed.

(3) In this section 'advertisement' means any form of commercial communication which is intended to publicise or otherwise promote the holder of a registration in relation to the provision by the holder of virtual asset services.

Offence to fail to comply with conditions or prescribed requirements

106M. (1) The holder of a registration commits an offence if the holder fails to comply with—

(a) any condition of the registration, or

(b) any prescribed requirements.

(2) A person who commits an offence under this section is liable—

(a) on summary conviction, to a class C fine, or

(b) on conviction on indictment, to a fine not exceeding €100,000.

(3) The Bank may prescribe requirements for the purposes of subsection (1)(b) only if the Bank is satisfied that it is necessary to do so for the proper and orderly regulation of the business of virtual asset service providers and, in particular, for preventing such businesses from being used to carry out money laundering or terrorist financing.

Holder of registration to ensure that beneficial owners are fit and proper persons

106N. (1) The holder of a registration shall take reasonable steps to ascertain that any person who is a beneficial owner of the virtual asset service provider concerned is a fit and proper person.

(2) A person who contravenes subsection (1) commits an offence.

(3) A person who commits an offence under this section is liable—

(a) on summary conviction, to a class C fine, or

(b) on conviction on indictment, to a fine not exceeding €100,000.

Revocation of registration by Bank on application of holder

106O.The Bank shall revoke a registration on the application of the holder of the registration, but only if satisfied that the holder of the registration has fully complied with each of the following:

(a) any conditions of the registration;

(b) any prescribed requirements referred to in section 106M;

(c) section 106N;

(d) section 106Q;

(e) section 106Y,

and if satisfied that the persons in management positions have complied with their obligations to be fit and proper persons.

Revocation of registration other than on application of holder

106P.(1)The Bank may revoke a registration under this Chapter only if the Bank has reasonable grounds to be satisfied of any of the following:

(a) the holder of the registration has not commenced carrying on business as a virtual asset service provider within 12 months after the date on which the registration was granted;

(b) the holder of the registration has not carried on such a business within the immediately preceding 6 months;

(c) the registration was obtained by means of a false or misleading representation;

(d) any of the following persons is not a fit and proper person:

(i) the holder of the registration;

(ii) in a case where the holder of the registration is a body corporate, a partnership or an individual carrying on business as a virtual asset service provider, any principal officer of the body corporate or partnership (as the case may be);

(iii) any person who is a beneficial owner of the business concerned;

(e) the holder of the registration has contravened or is contravening the obligations imposed on virtual asset service providers, as

designated persons, under this Part;

(f) the holder of the registration has failed to satisfy the Bank that its business risk assessment, policies and procedures are adequate or fit for purpose;

(g) the virtual asset service provider has contravened or is contravening any of the following:

(i) a condition of the registration;

(ii) a specified requirement referred to in section 106M;

(iii) section 106N;

(iv) section 106Q;

(v) section 106Y;

(h) the holder of the registration is so structured, or the business of the holder is so organised, that the holder is not capable of being regulated under this Chapter or as a designated person under this Part;

(i) in a case where the holder of the registration is a body corporate, the body corporate is being wound up;

(j) in a case where the holder of the registration is a partnership, the partnership is dissolved by the death or bankruptcy of a partner or because of the operation of a provision of the or otherwise;

(k) in a case where any person referred to in paragraph (d) has been registered to carry on business as a virtual asset service provider in another Member State, and an authority of the other Member State, that performs functions similar to those of the Bank under this Chapter, has terminated the permission of the person to carry on business as a virtual asset service provider in the other Member State;

(l) in a case where the holder of the registration is a subsidiary of a body corporate that has been registered to carry on business as a virtual asset service provider in another Member State, and an authority of the other Member State, that performs functions similar to those of the Bank under this Chapter, has terminated the permission of the body corporate to carry on business as a virtual asset service provider in the other Member State.