James Lawless (Kildare North, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

76. To ask the Minister for Finance if his attention has been drawn to the practice by which banks are requesting know your customer type anti money laundering documentation (details supplied) for accounts held by voluntary and community groups under threat of accounts being frozen should such documentation fail to be provided within one week; if he will request the Central Bank to direct some latitude to be given regarding timelines in such cases; and if he will make a statement on the matter. [40325/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am aware that banks may request documentation of the type described from any account holder, including voluntary and community groups, as part of ongoing efforts to combat both money laundering and terrorist financing.

The Central Bank oversees regulated financial services providers in Ireland and an important part of its supervisory remit is to ensure that credit and financial institutions comply with their obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010-2013. In carrying out these functions the Bank is required to act in an independent fashion and consequently I am not in a position to request it to direct some latitude to these groups regarding timelines for compliance.

It should be noted that section 33 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, sets out the requirements in relation to customer due diligence (‘CDD’).  Pursuant to section 33, designated persons, including banks, are required to identify the customer and verify the customer’s identity on the basis of documents (whether or not in electronic form) or information which the designated person has reasonable grounds to believe can be relied upon to confirm the identity of the customer. 

The legislation does not set out the CDD requirements to be carried out in relation to customers that are voluntary and community groups and as such designated persons will take a risk based approach to determining how they comply with section 33 in relation to those customers.

Guidelines on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing have been published which advise credit and financial institutions to take a risk-based approach in the following terms:

“There may be circumstances where it is reasonable to delay discontinuing a business relationship while the designated person facilitates the customer’s efforts to rectify the failure. The reasonableness of such a delay will vary depending on the circumstances of each case. Where a customer refuses to provide requested documentation or information then the business relationship should be discontinued once the customer has been warned of the potential implications and given time to respond accordingly”.

In summary, banks are required to ensure that all of its customers provide them with the necessary anti-money laundering documentation as per section 33 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, however the guidelines referred to above do appear to give them some latitude as to the approach they adopt based on the circumstances of each case.