Monday, 15 February 2021
Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2020: Report and Final Stages
We discussed this area in detail on previous Stages, so I will speak on it briefly. I have carefully considered the debate and the cross-party support Senator McDowell's amendment received. The approach we are proposing in the amendment is in a similar spirit. Senators will be aware that section 37(12) already provides for guidance to be issued to competent authorities in respect of the definition of "prominent public function". These amendments insert a subsection (13) to provide that guidance may be issued more generally to competent authorities in respect of this section. Such guidance will be issued only where the Minister believes it is necessary and expressly "for the purpose of facilitating the consistent, effective and risk-based application of this section." I wish to be clear on the distinction between subsections (12) and (13). While guidance under subsection (12) on prominent public functions will be issued on, or soon after, the commencement of the Act, I do not envisage guidance being issued under subsection (13) in the short or medium term. My hope is that the subsection (13) guidance will not be required at all. We expect the designated persons and competent authorities to develop an appropriate and a reasonable approach without top-down guidance.
In general, the Minister for Justice is also not the appropriate person to be issuing detailed operational instructions to financial services firms. These are matters for the Central Bank. However, I am conscious that politically exposed person, PEP, obligations apply to all designated persons, and so are relevant to all competent authorities. I would like to see a consistent and effective approach. I am conscious also that best practices in respect of the PEP regime will evolve both in Ireland and internationally.
Guidelines under this section will always be subject to consistency with the Act and must also be consistent with the directive. We do not have discretion to exclude, for example, family members and their spouses, or to disapply the need to determine the sources of funds. That is not our intention. Rather, it is to provide a flexible tool that can be used if necessary, having seen how the regime develops over a period of time.
Senator McDowell raised also the question of whether extended third party reliance under section 40 might be possible. We are of the view that this is not possible under the directive at present. Reliance on third parties is governed by Article 25 of the directive, as amended, and this specifically allows reliance in respect of Article 13(1)(a), (b) and (c). These provisions are implemented in sections 33 and 35. The provisions in section 37 instead transpose Article 18, which we do not believe falls under the Article 25 provisions. However, this may be something which can be worked through on a practical level to minimise duplication. I thank all Senators for their constructive contributions on this issue.