Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Firstly, it is important to note that the Department of Finance does not hold any supervisory or investigative role in relation to money laundering.However, the Department does have a key role in developing policy and legislation to ensure that Ireland’s framework for combating both money laundering and the financing of terrorism adheres to EU and international standards.

The nature of this policy area requires a whole-of-Government approach. Accordingly, the Department of Finance chairs the Government’s Anti-Money Laundering Steering Committee or AMLSC. The purpose of the AMLSC is to provide a national, cross-sectoral forum for the oversight and active review of Ireland’s framework for anti-money laundering and combating the financing of terrorism, or AML/CFT. Membership of the AMLSC consists of a range of bodies, including:

- Government Departments, including the Department of Justice and the Department of Enterprise, Trade, and Employment;- State bodies including An Garda Síochána, the Criminal Assets Bureau and the Central Bank of Ireland; and

- supervisors including designated accountancy bodies and the Law Society of Ireland.

A full membership list can be provided to the Deputy if required.In relation to the EU’s standards on AML/CFT, negotiations have been taking place on a package of new legislation published by the European Commission in 2021. Officials of the Department of Finance have represented Ireland in these negotiations, which I expect will be concluded in the next few months. Of the four elements to this legislation, one has already been agreed – a recast of the Transfer of Funds Regulation which will extend its obligations to certain crypto asset service providers. The remaining elements still being negotiated include: (i) are a new AML Directive; (ii) the EU’s first AML Regulation; and (iii) a Regulation establishing a central supervisor for AML matters at EU level - the Anti-Money Laundering Authority or AMLA. Considerable work has gone into developing this new legislation, with a priority for the Department of Finance being to ensure the legislation is consistent with Ireland’s Common Law legal system. As the Deputy will be aware, Ireland has also applied to become the location for AMLA, building on our proven expertise in financial services, technology and AML/CFT.

In relation to international standards, the Department of Finance also heads Ireland’s delegation to the Financial Action Task Force, or FATF. The FATF is an inter-Governmental policy-making organisation which sets international standards in the area of AML/CFT. As FATF's work has cross-Departmental and cross-Agency impact, meaning that all members of the AML Steering Committee have input to the consideration and implementation of the FATF standards. Ongoing engagement from members of the Steering Committee allows for informed contributions to the further development and revision of those standards.

Peer reviews known as Mutual Evaluations are a key element of the FATF’s work. Ireland’s last Mutual Evaluation took place in 2017 and our next evaluation will take place between 2027 and 2028. Ahead of this, members of the AML Steering Committee are working to address issues in our framework which have been previously identified.

Among these, the Department of Finance is currently working on two pieces of legislation. The first is an amendment to Section 38 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, which has been incorporated in the Finance (State Guarantees, International Financial Institution Funds and Miscellaneous Provisions) Bill 2023. This amendment will create a requirement for any institution engaging in a correspondent banking relationship to conduct enhanced customer due diligence on the respondent institution involved even if they are located within the European Union and not just outside it, as is currently the case. This addresses an issue previously identified in relation to FATF Recommendation 13 on Correspondent Banking.

The second is a Statutory Instrument, currently being drafted, which is intended to amend Section 42 of the Customs Act to provide for greater penalties for breaches of the requirements relating to the cross-border transportation of cash of €10,000 or more. This is intended to address an issue relating to FATF Recommendation 32 on Cash Couriers.

It should be noted that the FATF plenary agreed in October 2022 that Ireland’s follow-up process from our FATF 2017 evaluation should be deemed concluded, which was in part a reflection of the progress achieved since that evaluation.

I hope this serves to illustrate the work being done by my Department in this area.