Bernard Durkan (Kildare North, Fine Gael)
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Question 338: To ask the Minister for Finance the extent to which he has had discussions with his EU colleagues with a view to early warning or identification of money laundering activities within the banking system throughout the EU; if he is satisfied that adequate safeguards already exist or if changes are proposed; and if he will make a statement on the matter. [10556/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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There is strong co-ordination of measures to deter money laundering in the financial system at EU level. A Third Money Laundering Directive was adopted in 2005 and is due to come into effect shortly and requires to be transposed into domestic legislation in each Member State by December 2007.

The Third Money Laundering Directive will replace and update the 1991 and 2001 Money Laundering Directives which imposed obligations on financial institutions and, more recently, on lawyers, accountants and auctioneers to identify their clients and report suspicious transactions to the police authorities. The new Directive reflects the 2003 revision of the recommendations of the Financial Action Task Force on Money Laundering (FATF) — the main international anti-money laundering organisation. One of its central features is to strengthen the obligation on financial institutions, and others, to identify the beneficial ownership of legal entities. It will also impose an obligation on financial institutions and others to pay particular attention to "politically exposed persons", from other Member States and from third countries.

The directive also brings Terrorist Funding into the money laundering framework and introduces the concept of a risk-based approach to the implementation of its requirements. The Directive requires amendment of our domestic legislation in relation to money laundering and the relevant legislative proposals will be brought forward by the Minister for Justice Equality and Law Reform later this year.

Ireland also participates in work to ensure that the EU legal frameworks are adapted to the FATF's special recommendations on terrorist financing. For example, a proposal to tighten controls of money transfers in order to cut off funding sources for terrorists and other criminals were adopted in 2006 in line with FATF recommendations. The relevant Regulation requires that money transfers be accompanied by the identity of the sender, ensuring that this information will be immediately available to the appropriate law enforcement authorities.

The issues of money laundering and criminality generally are, of course, also regularly discussed at the Justice and Home Affairs (JHA) Council of the EU. As regards operational matters, there is ongoing cooperation and exchange of information between the relevant supervisory and police authorities within the EU.