Anti Money Laundering (AML)

We will design and implement an Anti-Money Laundering (AML) & Countering the Financing of Terrorism (CFT) policy and procedures appropriate to your business.

McCole & Co. Consultants also provides CPD accredited training to ensure your staff understand the regulatory and legislative framework designed to combat money laundering and counter the financing of terrorism.

ANTI MONEY LAUNDERING (AML) AND COUNTERING THE FINANCING OF TERRORISM (CFT)

Do you provide life assurance, savings and investments, pensions products, cash and other payment services to your customers?

If yes, then you are subject to the Central Bank’s Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regime.

If you do not have an AML/CFT framework in place, let us assist you to design and implement one that is relevant to the scale of your business.

If you do have an AML/CFT framework in place, we are happy to review it to assess if it has been updated to include recent legal and regulatory developments, most notably, the transposition of the 4th Anti-Money Laundering Directive into Irish law in the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018.

INCREASED REGULATORY FOCUS ON AML/CFT

If you are any way mindful of your regulatory AML/CFT obligations, it will come as no surprise to you that the focus of regulators and law enforcement agencies on money laundering and terrorist financing has grown significantly in the past few years. This increased focus has been demonstrated in a number of ways:

  1. Letter to brokers

All brokers providing life assurance, savings and investments or pensions products received correspondence from the Central Bank in 2019 requesting them to complete a survey on these particular products. In this regard, you were required to provide information in relation to:

  • the percentage of total income/turnover derived from these products;
  • total number of clients relating to these products;
  • whether you operate a client account in relation to these products.

This correspondence should be treated seriously and all firms should immediately review, if you have not done so already, your AML/CFT framework to ensure it is in compliance with recent legal and regulatory changes.

  1. The 4th Anti-Money Laundering Directive

In response to the transposition of the 4th Anti-Money Laundering Directive into Irish law, the Central Bank has recently issued Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector. These guidelines set out the Central Bank’s expectations regarding the factors that you should take into account when identifying, assessing and managing ML/TF risks.

NOW IS THE TIME TO GET AML/CFT FRAMEWORK REVIEWED AND UPDATED

In light of the recent regulatory focus on AML/CFT, it should come as no surprise to firms to be under the increased scrutiny of the regulator as it carries out its supervisory activities. This may take the form of:

  • an on-site AML/CFT inspection of your firm;
  • an AML/CFT review meeting with the Central Bank; or
  • completion of a Risk Evaluation Questionnaire (REQ).
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Frequently Asked Questions (FAQs)

WHAT IS MONEY LAUNDERING?
It is the process by which criminals attempt to conceal or disguise the true origin and ownership of the proceeds of a criminal act by filtering them through the financial system by means of transfers and transactions.
WHAT IS TERRORIST FINANCING?
Terrorist Financing is the collection or receiving of funds with the expectation that they will be used to carry out an act intended to cause death or serious injury to a civilian not involved in an armed conflict.
WHAT IS THE DIFFERENCE BETWEEN LAUNDERING & TERRORIST FINANCING?
  • Funds involved in terrorist financing do not necessarily need to be illicit;
  • Often only small amounts are required to commit individual terrorist attacks;
  • Terrorist Financing transactions are not necessarily complex;
  • The laundering of the funds is often an end in itself (i.e. the purpose of money laundering is to transmit the funds to a legitimate enterprise). This usually is not the case with terrorist financing as the end is to support acts of terrorism.
WHAT IMPORTANT RISK FACTORS SHOULD FIRMS INCLUDE IN THE BUSINESS RISK ASSESSMENT?

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) requires firms to take into account at least the following risk factors when conducting a business risk assessment:-

  • the type of customer
  • products and
  • types of transactions/services
  • countries or geographical areas
  • delivery channels
WHAT IS CUSTOMER DUE DILIGENCE?

Customer Due Diligence (CDD) measures must be applied to all new customers and be reviewed on an ongoing basis for existing customers. CDD is the gathering of information and documentation which enable the firm to:

  • Know the customer;
  • Confirm their identity;
  • Identify activities and transactions which are not consistent with the knowledge the firm has of the customer and the customer’s business;
  • Understand the source of funds to the account and for higher risk customers, their source of wealth;
  • Understand the purpose and nature of the customer relationship and the expected account activity;
  • Ascertain if a customer may be higher risk for money laundering or terrorist financing, including, for example, establishing if any person connected to the business is a Politically Exposed Person (PEP)
WHAT IS SIMPLIFIED CUSTOMER DUE DILIGENCE (SDD)?

Full Customer Due Diligence requirements may not be required for customers where it can be demonstrated that they pose a lower risk of money laundering or terrorist financing as part of the customer risk assessment. Where it can be evidenced that a customer possesses a lower level of AML risk, a lower level of due diligence may be appropriate. This is referred to as Simplified Due Diligence.

WHAT IS ENHANCED CUSTOMER DUE DILIGENCE (EDD)?

EDD is required where a customer is deemed to be higher risk. A firm should apply EDD measures as follows:

  • where a customer/beneficial owner is a PEP;
  • where a customer/ beneficial owner is established in high-risk third countries;
  • to a business relationship or transaction that they have identified as higher risk;
  • complex or unusually large transaction that has no apparent economic or visible lawful purpose
WHAT IS A POLITICALLY EXPOSED PERSON (PEP)?

A PEP is a person who is or has in the preceding 12 months, been entrusted with a prominent public function. It also includes immediate family members of a PEP or close associates of a PEP. 

WHAT IS CONSIDERED AS ‘TIPPING OFF’?
  • Informing a customer that they are under investigation; or
  • Informing a customer that they are in the process of being disclosed to the authorities.