Apr 21 2009 Martin Coyle
Ireland, which has been referred to the European Court of Justice over its non-implementation of the European Union's Third Money Laundering Directive, is expected to put the new legislation in place by October. The Department of Justice has told Complinet that although there are some issues over due diligence procedures, there are no major log jams to prevent its accession into Irish law.
Implementation of the directive has been beset by delays in Ireland, mainly due to a larger than expected response to the government's initial publication of the scheme of the bill. The final touches to the drafting of the bill will take place over the coming weeks before it is put before parliament at the end of May or the beginning of June. The bill will then have to make its way through both of Ireland's houses of parliament before they rise for the summer recess in July. If this is achieved then the act will take effect in October.
Gerry Hickey, a principal officer in the criminal law reform division of the DoJ, told Complinet that the department had been working closely with the Parliamentary Council, which is responsible for drafting the law, in implementing the changes. He said that this process would be completed in the next couple of weeks. The bill will be given a priority in the parliamentary process largely because of the infringement procedures that the commission has enacted against the country.
Hickey acknowledged that industry concerns had been voiced about possible customer due diligence requirements but said that attempts to smooth these issues would be made. Proposals have been mooted that would standardise the types of customer identification that institutions could accept from customers. Bankers have questioned what impact this could have on the risk-based approach that the directive would herald in Ireland. Hickey said that he was aware of the apprehension and pointed out that the DoJ had to take account of the criminal law provisions of the directive.
"We will have to balance the bank concerns with the requirements for someone who is deliberately negligent or reckless in conducting this due diligence and if they could be successfully convicted. This has not been resolved yet but hopefully we can resolve it in a way that will keep the bankers happy.
"We don't want a situation where you had a solicitor or an accountant working exclusively for criminal elements and they would have a circumstance so flexible that they don't have to ask who their clients are," he added.
Despite this, Hickey said that Ireland would stick as closely to the directive as possible. He said that there would be slight tweaks to the directive but the industry was keen that there would be as little "gold plating" as possible. The DoJ was keen to avoid this too, he added.
"Irish banks operate in the UK and they operate in Northern Ireland obviously so we don't want the standard to be significantly different between jurisdictions," he said.
Putting the directive into Irish law will see existing money laundering legislation in the country, which is on three different statutes, repealed and re-enacted. This is different from the UK where secondary legislation was introduced to take account of the directive.
The directive came into force in December 2007 and was largely based on existing EU legislation and the addition of Financial Action Task Force recommendations. Implementation has been patchy at best and in February the commission named and shamed Spain, Ireland and Sweden for not notifying the commission about their implementation status and Belgium, Finland, France and Poland for only providing partial notification.
