On 6 September 2019 the Central Bank of Ireland (‘CBI’) published Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector (‘Guidelines’). The Guidelines set out the expectations of the CBI in respect of credit and financial institutions’ compliance with their AML/CFT obligations as set out in the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the ‘Act’), following the transposition of the EU’s Fourth Anti-Money Laundering Directive into Irish Law. The Guidelines also incorporate expectations set out in previous CBI AML/CFT Sectoral Reports, AML/CFT Bulletins, and relevant European Supervisory Authority Guidelines.
The Guidelines were initially published on 21 December 2018 and feedback was invited on an accompanying consultation paper (‘CP128’). The consultation period closed on 5 April 2019. The final Guidelines are accompanied by a ‘Feedback Statement to CP128’ in which the CBI provides information regarding amendments made following a review of the CP128 submissions. It is noted that some technical amendments have been made to provide clarity, e.g. in respect of the obligations relating to the verification of beneficial owners, and the requirements in respect of third party reliance arrangements.
The CBI has confirmed that the Guidelines are not intended to be sector specific and has elected not to provide further information relating to pooled accounts and the requirements relating to correspondent relationships, instead referring to the European Supervisory Authorities Risk Factors Guidelines. The Guidelines do not include prescriptive examples of documentation that may satisfy customer identification and verification obligations, on the basis that such examples may inhibit the use of new technology and/or other innovative solutions.
Notwithstanding that the Guidelines have not been fundamentally revised following the consultation period, the following points are noted when comparing the final version with the consultation version:
Timing of Completion of Customer Due Diligence (‘CDD’)
While the consultation version did not reference the requirement to complete CDD prior to carrying out transactions, the final Guidelines do highlight this section of the Act, supporting an interpretation that the CBI expects an ‘upfront’ model of CDD to be applied across the financial sector.
Persons Purporting to Act on Behalf of Customers
The Guidelines provide helpful clarity in relation to what parties should be subject to CDD in their capacity of purporting to act on behalf of customers, and this may include: ‘Power of Attorney cases, Executor/Administrator, Ward of court or vulnerable customer who has a third party acting on their behalf via formal authorisation’. Within the funds industry, this can be interpreted to mean that the new statutory requirement will not place significant new obligations, for example a requirement to perform CDD on authorised signatories.
Whereas the consultation version of the Guidelines proposed that an assessment should be conducted following an AML training session, the final version clarifies that this is not mandatory. However, if training does not contain an assessment or examination, funds must be in a position to ‘demonstrate effectiveness of training and staff understanding’.
As the Guidelines are broadly similar to the consultation version, our original observations on that version here continue to be relevant.
You can download your copy of Central Bank of Ireland Publishes AML/CFT Guidelines for the Financial Sector here
KB Associates’ Services
KB Associates offers a range of services to investment funds and management companies including:
- The provision of MLRO services
- The provision of beneficial ownership register services
- The provision of UCITS/AIF management company services
- The provision of designated persons to perform UCITS business plan and AIFMD programme of activity