Written answers

Tuesday, 21 November 2017

Department of Justice and Equality

Money Laundering

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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268. To ask the Tánaiste and Minister for Justice and Equality the grounds on which established bank customers in the State can be deemed subject to section 37 of the Criminal Justice Act 2010; and if he will make a statement on the matter. [48856/17]

Photo of Charles FlanaganCharles Flanagan (Laois, Fine Gael)
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Banks as designated persons under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“the Act”) are obliged to conduct ongoing monitoring of their customers and to keep their information/documentation up to date. This is in line with the risk-based approach allowing a designated person to apply appropriate measures. It also recognises that customer profiles change over time, as does the nature of business relationships. It allows designated persons to monitor the business relationship and mitigate the risk of money laundering or terrorist financing.

The criteria by which a bank will make a decision that a customer is subject to Section 37 of the Act are set out in Section 37(10) which define what constitutes a politically exposed person, an immediate family member of a politically exposed person or a close associate of a politically person.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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269. To ask the Tánaiste and Minister for Justice and Equality the grounds on which a bank is obliged to implement the issuing of a request pursuant to section 37 of the Criminal Justice Act 2010; if he is satisfied that these provisions are implemented consistently; and if he will make a statement on the matter. [48857/17]

Photo of Charles FlanaganCharles Flanagan (Laois, Fine Gael)
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Section 37(1) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 obliges a bank to take steps to determine whether a customer resident outside the State is a politically exposed person or a close associate or immediate family member of a politically exposed person ("PEP"); the definition of such a person is set out in Section 37(10). Section 37(3) requires that such steps should be those reasonably warranted by the risk that such a customer is involved in money laundering or terrorist financing.

Section 37(4)(a) obliges a bank, where such a determination has been made, to ensure that approval is obtained from senior management before a business relationship is established with such a person. Section 37(4)(b) obliges a bank in such circumstances to determine the source of wealth and of funds for transactions which the customer seeks to carry out.

Section 37(8) obliges a bank to discontinue the business relationship or refuse to carry out transactions where the customer fails to provide documents or information which are required for the bank to meet its obligations as noted above.  

The Central Bank of Ireland is responsible for the monitoring of credit and financial institutions Anti Money Laundering compliance with the Act. In previous inspections of the banking sector, the Central Bank found deficiencies in the measures banks had in relation to PEPs. These deficiencies included the initial screening of customers, timing of senior management approval and the failure to sufficiently identify, verify and document source of wealth and source of funds.

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