Anti-Money Laundering and Counter Terrorism Financing

Firms should now be actively preparing for the additional compliance measures and policy or procedural amendments that will be required across their business.

4th Anti-Money Laundering Directive (“the Directive”)

The aim of the Directive is to remove ambiguities and assist in achieving standardised Anti-Money Laundering and Counter Terrorism Financing across EU Member States. It also aims to counteract terrorist financing through improved adherence to the Directive’s obligations. The Directive is required to become law in EU member states in June 2017.The changes proposed are likely to increase the level of due diligence required to be carried out by fund entities on transfers from high risk countries, and increase the level of safeguards and required controls to be applied in performing due diligence.

Beneficial Ownership Register
IMMEDIATE IMPACT : Requirement to keep and maintain a beneficial ownership register since 15 November 2016. 

Department of Finance National Risk Assessment
The Department of Finance has published its National Risk Assessment ( “NRA”) for Ireland on Money Laundering and Terrorist Financing in conjunction with the Department of Justice and Equality. The aim of this assessment was to increase understanding of Ireland's risks in this area. Strategies will then be developed to address these risks. The Risk Assessment will be updated on an ongoing basis.

What was the risk assessment for the Funds Industry ?
The risk assessment for the funds industry was medium-high. The high level of outsourcing in this sector was highlighted. Fund administrators were viewed as being particularly exposed to a high level of risk due to their direct relationship with the client. Risk factors include – complex investor structures, high volumes of transactions, lack of direct business relationships with underlying investors, high level of outsourcing and reliance on third parties. Deloitte considers the NRA a very helpful document it provides a lot of detail on Ireland's regulatory and legal approach in the area of AML/CTF and set out areas which are at risk of AML/ CTF.

5th Anti-Money Laundering Directive

  • The Council of the European Union has published the first “Presidency compromise text” version of the 5th
    Anti-money Laundering Directive 
  • Effective date is also 26 June 2017 the same as the 4th Anti-Money Laundering Directive
  • The emphasis is on Digital Currencies, Terrorist Financing and Register of Beneficial Owners

Anti-Money Laundering: Beneficial Ownership of Corporate Entities Regulations 2016
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