James O'Connor (Cork East, Fianna Fail) | Oireachtas source

I apologise for being late. We were in the middle of a meeting of the Fianna Fáil Parliamentary Party.

I welcome this Bill, which drives home the need for transparency when it comes to the ever-changing world of money laundering and terrorist financing. The fifth anti-money laundering directive, which the Bill transposes into Irish law, is very important. In the wake of terrorist attacks and the revelations resulting from the publication of the Panama Papers in 2016, it was understood that it was necessary for several measures to be put in place to increase the level of financial transparency and ensure that our legislation keeps pace with the technological changes in our world. We must not be seen to be asleep at the wheel in this regard. Politicians are too often seen as being behind the curve of societal change and are too often accused that the legislation they pass does not reflect reality. I am, therefore, thrilled to see the Government acting on this issue.

I will highlight two aspects of this Bill, namely, the need for co-ordination among financial intelligence units across the EU and the need to adapt our anti-money laundering practices to changing patterns in consumer behaviour. I refer to the prevention of risks associated with the use of virtual currencies for terrorist financing and limiting the use of prepaid cards. These actions are of the utmost importance to our economy. While prepaid cards provided by Apple and Google may seem like a nice gift, we must think about the more sinister uses of such cards.

While the days of physical shopfronts are still with us, we must recognise the changing nature of customer spending patterns and adjust our legislation accordingly. Given the popularity of prepaid cards, and the anonymous nature of many of them, fraud experts are increasingly concerned about the potential for abuse, from petty scams to that of money laundering by drug lords and terrorists. The global prepaid market is anticipated to reach €3.5 trillion in value by 2022, and there is no sign of this trend stopping. Lowering the value limits for carrying out simplified due diligence on e-money instruments is key, and the new limit of €150 is very welcome in this regard.

Co-ordination is key and this Bill will enhance the powers of EU financial intelligence units and facilitate increasing transparency regarding who really owns companies and trusts by establishing beneficial ownership registers. It is critical to ensure that the relevant unit in An Garda Síochána has the necessary resources and skills to not only track transactions within the country, but to co-ordinate successfully with our EU partners.

The reforms of the beneficial ownership register for legal entities such as companies will enhance public scrutiny and contribute to preventing the misuse of legal entities for money laundering and terrorist financing purposes. The national registers of beneficial ownership information will be interconnected directly to facilitate co-operation and exchange of information between member states. Improvements will be put in place to ensure that the verification mechanisms of beneficial ownership information collected by the registers is accurate and reliable across those registers. It is said that information is power, so ensuring a transparent set-up with easily accessible information across member states is going to be extremely important.

See this speech in context