Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

Táim ag tógáil an Bhille seo thar ceann an Aire Dlí agus Cirt agus Comhionannais. Tugaim leithscéal ar son an Aire nach mbeidh sé in ann freastal sa Teach seo inniu.

The Bill was originally published as the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2013. However, as it was amended to include a number of provisions unrelated to money laundering, the title was changed on Report Stage in the Dáil. The Bill comprises three parts, the first addressing the usual matters to do with the Short Title and commencement; the second addressing money laundering and terrorist financing; and the third containing provisions to help the Garda Síochána prevent terrorist attacks. The main objectives of Part 2 are to amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 so as to more closely align its provisions with the recommendations of the financial action task force, FATF, and to take account of improvements suggested by the experience of operating the legislation ó thosaigh sé sa bhliain 2010.

While our legislation to counter money laundering and terrorist financing is of the highest standard, it is important it is adapted to reflect the practical lessons learned from the experience of its operation but also that is seen to clearly reflect international norms. Part 3 of the Bill provides for mobile phone networks to be shut down to prevent their use in detonating a bomb. New provisions in Part 2 will allow the Garda Síochána to address concrete threats involving the use of cell-activated improvised explosive devices.

Money laundering and terrorist financing can be done on a small or a large scale and can involve international transactions. It requires a response as sophisticated as the methods of the criminals involved and co-ordination on a national and international level. The financial action task force on money laundering was established in 1989 and Ireland joined in 1991. Its purpose was to develop policies to combat money laundering and terrorist financing. The standards are applied by its 36 members and FATF evaluates its member states’ compliance with its recommendations.

Provision was first made for anti-money-laundering measures in the Criminal Justice Act 1994. The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 saw our laws in the area updated to reflect international developments. The prevention and detection of money laundering relies on the co-operation of legitimate businesses whose systems are abused by criminals to make the proceeds of their crimes appear to be legitimate income. The 2010 Act requires an expanded range of designated persons, including banks, lawyers, accountants, gaming clubs and dealers in high-value goods, to put in place prevention and detection measures.

Following our 2006 FATF evaluation, Ireland was placed in the regular follow-up process. Our situation was reviewed in light of the passage of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and FATF identified a number of technical issues. The amendments to the 2010 Act in the Bill are, in the main, aimed at giving effect to those technical changes so that Ireland can be removed from the follow-up process at the FATF plenary session in June. It is an important step in protecting Ireland’s reputation as a good place to do business and a country that enforces international standards in preventing and tackling money laundering. The Bill addresses the FATF concerns with the current legislation as evaluated under the old FATF recommendations. It is preferable to legislate for the new FATF recommendations as revised in 2012. However, that cannot be done until the final shape of the fourth EU directive is known, as the fourth directive will give effect in EU law to the new FATF recommendations. The EU Commission’s proposal for the fourth directive on money laundering and terrorist financing was published in February of this year. It is currently the subject of negotiation in a Council of the European Union working group under the Irish Presidency.

We cannot afford to postpone making the amendments to the 2010 Act contained in the current Bill. The Department of Finance advises that if Ireland’s stay in the FATF follow-up process is prolonged beyond June, there could be negative consequences for our international standing.

This Bill is, therefore, an interim measure. It provides for some technical adjustments to the 2010 Act to enhance our compliance with current international standards, but we will have to review the systems we have in place once the proposed fourth EU directive is enacted.

Part 3 of the Bill is aimed at tackling the threat arising from terrorists and criminals who seek to use mobile phones to remotely detonate explosives. It will allow for the cessation of mobile telecommunications services where such a cessation would help to avert a threatened explosion. Given that mobile telecommunications are such an integral part of the everyday lives of people in businesses, such a cessation cannot be undertaken without proper or adequate safeguards and controls. Therefore, Part 3 provides for a series of steps to be taken before a direction can be issued to mobile service providers to cease service within a particular area. Accordingly, where an assistant commissioner of the Garda Síochána reasonably believes there is an imminent, serious threat to life, limb or of serious damage to property, he or she will be able to apply to the Minister for Justice and Equality for an authorisation. If the Minister is satisfied that there are reasonable grounds for believing there is a serious threat and that cessation of mobile phone services would assist in averting that threat and, having regard to all of the circumstances, including the importance of maintaining mobile phone services in the area concerned and the effect on users, that cessation of such services is necessary and proportionate, he or she may grant an authorisation. This authorisation can last for only 24 hours, which will allow a Garda chief superintendent to issue a direction to a mobile service provider to cease providing mobile phone services in an area. A direction can only be issued by a chief superintendent where he or she is satisfied that the serious threat continues and that other means of averting that threat are less likely to succeed. The period for which a direction can be enforced is limited to six hours. Where a direction is no longer required, it must be withdrawn. Mobile phone companies will be required to comply with a direction and failure to do so will be an offence. The proposals will require that mobile service providers continue to maintain, where possible, emergency call facilities. While not all service providers are capable of this at present, it is expected that they will incorporate such a facility eventually, as part of the regular upgrading of their systems.

I will now outline the provisions of the Bill which consists of 29 sections in three Parts. Part 1, section 1, provides for the Short Title, collective citation and commencement. Part 3 shall commence on enactment, while Part 2 shall be commenced by an order or orders. Part 2, section 2, defines the Act for the purposes of that Part. Part 2 deals exclusively with amendments to the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.

Section 3 amends section 17 of the 2010 Act. The purpose of this amendment is to clarify that orders which may be made by a District Court Judge under section 17 of the Act of 2010 shall be made ex parte and not in public.

Section 4 provides for amendments to the definition of "occasional transaction" which is contained in section 24 of the 2010 Act. The definition provides that an occasional transaction vis-à-visa customer of a designated person means a single transaction or a series of transactions that are or appear to be linked with each other, where the total amount reaches €15,000. This will ensure obligations under the Bill such as customer due diligence apply once this threshold is reached. Section 4 provides for the lowering of this threshold in private members' gaming clubs, where the value concerned in a transaction reaches €2,000, and for the wire transfer of funds, where an amount of €1,000 is reached.

Section 5 provides for a technical amendment to section 25 of the 2010 Act. Its purpose is to clarify that the obligations which arise for a relevant independent legal practitioner as a designated person only apply when such practitioners are carrying out the services listed in the definition of "relevant independent legal professional".

Section 6 amends section 33 of the 2010 Act. The purpose of the amendment in the Bill is to align the wording contained in section 33 more closely with international standards. It will not result in any substantial change to obligations under the Act.

Sections 7 and 8 amend sections 34 and 36 of the 2010 Act which relate to the application of simplified customer due diligence, CDD.

The purpose of the amendments is to make explicit what is implicit in the legislation - a designated person must take the necessary measures to establish that the particular customer or product is one to which such provisions can be applied.

Section 9 amends section 37 of the 2010 Act, which deals with politically exposed persons, PEPs. The amendments will provide that the necessary measures must be applied to an existing customer who becomes a PEP. It also explicitly provides that enhanced ongoing monitoring must be applied to all PEP customers.

Section 10 amends section 39 of the 2010 Act, which deals with the application of additional CDD measures, that is, enhanced CDD, to a customer or beneficial owner where there is a higher risk of money laundering or terrorist financing. The current legislative provision provides for the option of applying enhanced CDD by the designated person. The amendment provides that enhanced CDD must be applied by the designated person where it has reasonable grounds to believe that there is a heightened risk of money laundering or terrorist financing.

Section 11 amends section 54 of the 2010 Act, which deals with the internal policies and procedures that a designated person must put in place with a view to preventing and detecting money laundering and terrorist financing.

Section 12 amends section 55 of the 2010 Act. The purpose of the amendment is to provide the flexibility that is required in relation to where records are stored, while also ensuring that the records are readily available to relevant authorities such as An Garda Síochána and competent authorities to carry out their functions and powers.

Section 13 amends section 84 of the 2010 Act. Its purpose is to clarify that a designated accountancy body is not obliged to act as the competent authority for a company purely because an employee of the company is a member of the designated accountancy body.

Section 14 amends section 71 of the 2010 Act to extend the type of directions that a "State competent authority" may issue to a designated person, thereby increasing and improving existing enforcement powers. The new provision will enable a State competent authority to issue positive as well as negative directions. The new provision will also now provide that such directions may be issued to a class of designated persons. This power will enable State competent authorities to recognise and cater for the different compliance issues that might arise between the different businesses or sectors for which they are responsible.

Section 15 provides for subsidiaries of a credit or financial institution operating as a trust or company service provider, TCSP, to be authorised and monitored by the Central Bank rather than by the Minister for Justice and Equality.

Section 16 provides for miscellaneous amendments to the 2010, which are consequential to those contained in section 15.

Sections 17 and 18 provide for registers which are required to be kept under the Act to be more accessible by being kept online and to allow for their amendment.

A number of terms are defined in section 19 for the purposes of Part 3. A key definition is that of "serious threat" which forms the basis for any consideration of the exercise of the powers contained in this Part. Serious threat is defined as -

"an imminent threat that-
(a) an explosive or other lethal device will be activated by use of a mobile communications service provided in the State by an undertaking, and
(b) the activation of that explosive or other lethal device is likely to cause -(i) death of a person,
(ii) serious bodily injury to a person, or
(iii) substantial damage to property; "

It is clear that we are concerned under this section with a high level of seriousness. The powers conferred under this part will only be available where a serious threat is imminent.

Sections 20 to 22, inclusive, deal with applications for authorisations, the conditions justifying authorisations, and the granting of authorisations. The Minister must receive an application from a member of the Garda not below the rank of assistant commissioner and be satisfied as to a number of matters which, broadly put, are: There are reasonable grounds for believing that a serious threat exists; that the cessation of mobile phone services would help to avert that threat; and that in the circumstances, an authorisation is necessary and proportionate. An application must be made in writing. In cases of exceptional urgency, it can be made orally and confirmed later in writing. Section 21(7) provides for the Minister, for reasons of safety and security and essential interests of the State, to refuse to disclose various matters relating to an authorisation. The Minister may not refuse such disclosure to a court.

An authorisation may remain in force for only 24 hours. An authorisation will permit a Garda of chief superintendent rank or higher to issue directions to undertakings, that is, licensed mobile phone companies. It shall specify a maximum duration of six hours for any cessation period. The Minister must record his or her reasons for granting an authorisation. This recording of reasons ensures the Minister's actions will be capable of subsequent judicial review.

Section 23 provides for an authorisation to be varied or extended. However, such variation or extension is subject to the same conditions applicable to the making of an authorisation contained in sections 21 and 22.

Section 24 contains the power for a member of the Garda Síochána not below the rank of chief superintendent to issue a direction to an undertaking to cease providing mobile communications services. The section contains a range of safeguards and conditions. Subsection (1) requires a ministerial authorisation to be in force. It also requires the Garda to be satisfied that the serious threat on which the authorisation was based continues and that other means are less likely to avert it.

A direction must be issued in writing and signed. There is provision for oral directions in urgent cases, but confirmation in writing is required. A direction must state the name of the undertaking to which it is issued and must contain information on the authorisation on which it is based.

The direction will specify the services to be ceased, the cessation period and the geographical area concerned. It may contain additional requirements necessary to averting the serious threat. The cessation period cannot be longer than that set in the Minister's authorisation and, in any case, cannot exceed six hours. The terms of a direction, other than the cessation period, can be varied, subject to the requirements in subsections (2) and (3). When issuing or varying a direction, the member of the Garda Síochána must limit the effect of the cessation on the public to the minimum necessary to avert the threat.

The section provides a significant power for senior officers of the Garda Síochána. Cessation of mobile communications services represents interference with the ability of people to communicate with one another. However, the interference for which we are providing is not made lightly. It is subject to all the conditions I have mentioned and only available where there is a serious and imminent threat to life, limb or property from an explosive or lethal device activated by mobile communications services.

Section 25, to protect the integrity of counter-terrorist and security operations, provides for a degree of secrecy around authorisations and directions. The content or existence of a direction or authorisation may not be disclosed prior to the cessation period. Only the content of a direction or authorisation cannot be disclosed after the cessation period. This will allow mobile phone companies to explain the cessation of service to customers after the fact, should such explanation be necessary, by referring to the existence of a direction but without disclosing its content.

Subsection (3) requires undertakings to endeavour to continue to provide emergency service calls. The technology is available, if not yet fully in place, for mobile phone companies to maintain the availability of 999 services, while otherwise effectively shutting down their networks. We will be looking to mobile phone companies to live up fully to their obligations under this subsection.

Section 26 places similar non-disclosure obligations as apply to undertakings on other persons in regard to the existence and content of authorisations and directions. Section 27 requires that where the member who issued the direction considers that it is no longer necessary, he or she must withdraw it without delay and notify the undertaking.

Section 28 provides for the Minister's functions under this Part to be carried out by a nominated officer. The Minister may only nominate officers for this purpose of assistant secretary grade or higher.

Section 29 provides for a number of offences, all of which carry penalties of class A fines and-or 12 months imprisonment on summary conviction, or an unlimited fine or five years imprisonment on conviction on indictment. The offences address a failure to comply with a direction, intentionally hindering compliance by an undertaking with a direction, and certain disclosures relating to directions or authorisations contrary to sections 20 and 21.

The standard provision for the criminal liability of corporate officers is made in subsection (5).

In a reflection of the sensitivity of the security issues involved and the non-disclosure requirements of the Bill, provision is made for criminal proceedings or part of them for offences under this Part to be heard otherwise than in public. This would be a matter for the Director of Public Prosecutions and ultimately the court hearing the proceedings.

I look forward to hearing the contributions of Senators and hope the House will support the passing of the Bill which provides for some technical but necessary amendments to the law on money laundering and terrorist financing. It will provide An Garda Síochána with a vital tool in its efforts to prevent death and injury in terrorist bomb attacks. I commend it to the House.