The Association of International Accountants (AIA) is a competent authority under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended and is, in this capacity, required to monitor certain persons and entities, known as ‘designated persons’, and take such measures as are reasonably necessary for the purpose of securing their compliance with the requirements specified in the Act.
On 14 November 2018 legislation was enacted to fully transpose the Fourth Anti Money Laundering Directive (MLD4) into Irish law.
Some of the main reforms were:
- the definition of persons to be considered beneficial owners of bodies corporate, trusts and partnerships is expanded;
- designated persons are required to conduct business risk assessments as part of customer due diligence (CDD) processes and are required to more comprehensively monitor business relationships;
- the definition of politically exposed persons (PEPs) now includes individuals residing inside the State; and
- exemptions relating to certain electronic money products have been tightened.
For more information on how to meet the regulatory requirements visit https://www.aiaworldwide.com/anti-money-laundering-supervision
In response to terrorist attacks in Europe and the leak of the Panama Papers, the European Commission published a proposal in July 2016 to amend 4MLD.
On 19 June 2018, the final text of 5MLD was published in the Official Journal of the European Union and Member States will therefore have until 10 January 2020 to fully implement the directive.
From a corporate transparency perspective, the key feature of 5MLD is that it requires Member States to make central registers of beneficial ownership accessible to the general public with the exception of the register in respect of trusts, which will still require demonstration of a legitimate interest.
Changes also include:
- Extending AML requirements to virtual currency exchanges, wallet providers, and letting intermediaries where monthly rent is over €10,000;
- Updates to CDD provisions to reflect increasing use of electronic due diligence; and also documenting difficulties in the verification process where the senior managing official is a beneficial owner of the entity;
- A responsibility when doing CDD to check that the client has filed beneficial ownership details with the registrar (i.e. Companies House) and report any discrepancies identified.
- Each member state will produce a list of public functions that would make someone a PEP.
- All self-regulatory bodies are required to publish an annual report about their compliance monitoring and detected AML breaches.
- Public bodes will be required to publish information on the AML risks they have identified, and what their response has been including the human and financial resources applied.
Read Accountancy Europe’s factsheet here.
Read the updated Directive here.
Key steps for AIA members to ensure AML compliance
- Read the 2010 Act as amended by the Criminal Justice Act 2013 and M42 (revised) Anti-Money Laundering Guidance published by CCAB-I, due for review in 2019.
- Ensure that you and your employees are aware of the legislation governing money laundering and the implications of changes to the day-today operations.
- Ensure your policies and procedures are updated to reflect the Act’s requirements.
- Keep updated of new developments via AIA’s anti-money laundering guidance, In-Practice, International Accountant magazine and other official sources.
- Satisfy yourself that your staff are trained in and aware of both the legislative requirements and your firm's own procedures. Maintaining up to date training records evidencing the fulfilment of all obligations in this regard is important.
- Ensure your clients are aware of appropriate requirements under the Act by updating your engagement letter to make clear a requirement to collect evidence of identity.
- Have appropriate systems in place to report knowledge or suspicion, or reasonable grounds to know or suspect, that a money laundering offence has been committed to the relevant authority.