In May 2005 the European Parliament approved the 3rd EU Anti- Money Laundering Directive (2005/60/EC) on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing. This directive was subsequently adopted by the European Council of Economic and Finance Ministers in early June 2005. On 1 August 2006 the EU Commission laid down implementing measures for this Directive as regards:
- the definition of Politically Exposed Persons (PEPs);
- the technical criteria for simplified customer due diligence procedures; and for
- exemption on grounds of financial activity conducted on an occasional or very limited basis.
These Directives were transposed into Irish law through the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.
The European Union has finalised negotiations on a new 4th Anti-Money Laundering Directive for the purposes of enhancing anti-money laundering and counter-terrorist financing laws across the Member States of the European Union. The intention of the new directive is to move to a more risk and evidence based approach to identifying and managing money laundering and to counter-terrorist financing risks.
Financial Action Task Force (FATF)
The Financial Action Task Force (FATF), is an inter-governmental organisation established on the initiative of the G7 Countries in 1989. It is a policy-making organisation that leads the international fight against money laundering and terrorist financing.
The FAFT sets international standards for combating money laundering and terrorist financing. It promotes the effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
Since its establishment, the FATF has developed a series of recommendations which are regarded as the international standard for combating money laundering, financial terrorism and the proliferation of weapons of mass destruction. The FATF monitors progress of its 36 members (including Ireland) in implementing measures. In collaboration with other international stakeholders the FATF works to identify national level vulnerabilities with the aim of protecting the international financial system from mis-use. The FATF have identified jurisdictions that it considers as high risk. The FATF website displays this list of high risk jurisdictions.
The FATF conducts peer reviews of each member (including Ireland) on an on-going basis to assess levels of implementation of the FAFT recommendations, providing an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.
The FATF undertook a mutual evaluation of Ireland in June 2006, to report on anti money laundering and combating the financing of terrorism in Ireland. A follow-up report was issued in July 2013. Ireland will be subject to a comprehensive evaluation in 2016/2017.