Criminal Justice (Money Laundering and Terrorist Financing) Act 2010

37.

Enhanced customer due diligence — politically exposed persons.

37.— F46 [ (1) A designated person shall take steps to determine whether or not

( a ) a customer, or a beneficial owner connected with the customer or service concerned, or

( b ) a beneficiary of a life assurance policy or other investment-related assurance policy, or a beneficial owner of the beneficiary,

is a politically exposed person or an immediate family member, or a close associate, of a politically exposed person. ]

F46 [ (2) The designated person shall take the steps referred to in subsection (1)

( a ) in relation to a person referred to subsection (1)(a) , prior to

(i) establishing a business relationship with the customer, or

(ii) carrying out an occasional transaction with, for or on behalf of the customer or assisting the customer to carry out an occasional transaction,

and

( b ) in relation to a person mentioned in subsection (1)(b)

(i) prior to the payout of the policy, or

(ii) at the time of the assignment, in whole or in part, of the policy. ]

(3) The steps to be taken are such steps as are reasonably warranted by the risk that the customer F47 [ , or beneficiary ] or beneficial owner (as the case may be) is involved in money laundering or terrorist financing.

F48 [ (4) If a designated person knows or has reasonable grounds to believe that a customer F49 [ ] is, or has become, a politically exposed person or an immediate family member or close associate of a politically exposed person, the designated person shall

( a ) ensure that approval is obtained from senior management of the designated person before a business relationship is established or continued with the customer,

( b ) determine the source of wealth and of funds for the following transactions

(i) transactions the subject of any business relationship with the customer that are carried out with the customer or in respect of which a service is sought, or

(ii) any occasional transaction that the designated person carries out with, for or on behalf of the customer or that the designated person assists the customer to carry out,

and

F46 [ ( c ) in addition to measures to be applied in accordance with section 35(3) , apply enhanced monitoring of the business relationship with the customer. ] ]

(5) Notwithstanding subsections (2)(a) and (4)(a), a credit institution F47 [ or financial institution ] may allow a bank account to be opened with it by a customer before taking the steps referred to in subsection (1) or seeking the approval referred to in subsection (4)(a), so long as the institution ensures that transactions in connection with the account are not carried out by or on behalf of the customer or any beneficial owner concerned before taking the steps or seeking the approval, as the case may be.

(6) If a designated person knows or has reasonable grounds to believe that a beneficial owner F49 [ ] connected with a customer or with a service sought by a customer, F48 [ is, or has become, a politically exposed person ] or an immediate family member or close associate of a politically exposed person, the designated person shall apply the measures specified in F48 [ subsection (4)(a) , (b) and (c) ] in relation to the customer concerned.

F47 [ (6A) If a designated person knows or has reasonable grounds to believe that a beneficiary of a life assurance or other investment-related assurance policy, or a beneficial owner of the beneficiary concerned, is a politically exposed person, or an immediate family member or a close associate of a politically exposed person, and that, having regard to section 39, there is a higher risk of money laundering or terrorist financing, it shall

( a ) inform senior management before payout of policy proceeds, and

( b ) conduct enhanced scrutiny of the business relationship with the policy holder. ]

(7) For the purposes of F46 [ subsections (4) , (6) and (6A) ] , a designated person is deemed to know that another person is a politically exposed person or an immediate family member or close associate of a politically exposed person if, on the basis of—

( a) information in the possession of the designated person (whether obtained under subsections (1) to (3) or otherwise),

( b) in a case where the designated person has contravened subsection (1) or (2), information that would have been in the possession of the person if the person had complied with that provision, or

( c) public knowledge,

there are reasonable grounds for concluding that the designated person so knows.

(8) A designated person who is unable to apply the measures specified in subsection (1), (3), (4) or (6) in relation to a customer, as a result of any failure on the part of the customer to provide the designated person with documents or information—

( a) shall discontinue the business relationship (if any) with the customer for so long as the failure continues, and

( b) shall not provide the service or carry out the transaction sought by the customer for so long as the failure continues.

(9) A person who fails to comply with this section commits an offence and is liable—

( a) on summary conviction, to a fine not exceeding €5,000 or imprisonment for a term not exceeding 12 months (or both), or

( b) on conviction on indictment, to a fine or imprisonment for a term not exceeding 5 years (or both).

(10) In this section—

“close associate” of a politically exposed person includes any of the following persons:

( a) any individual who has joint beneficial ownership of a legal entity or legal arrangement, or any other close business relations, with the politically exposed person;

( b) any individual who has sole beneficial ownership of a legal entity or legal arrangement set up for the actual benefit of the politically exposed person;

“immediate family member” of a politically exposed person includes any of the following persons:

( a) any spouse of the politically exposed person;

( b) any person who is considered to be equivalent to a spouse of the politically exposed person under the national or other law of the place where the person or politically exposed person resides;

( c) any child of the politically exposed person;

( d) any spouse of a child of the politically exposed person;

( e) any person considered to be equivalent to a spouse of a child of the politically exposed person under the national or other law of the place where the person or child resides;

( f) any parent of the politically exposed person;

( g) any other family member of the politically exposed person who is of a prescribed class;

“politically exposed person” means an individual who is, or has at any time in the preceding 12 months been, entrusted with a prominent public function, including either of the following individuals (but not including any middle ranking or more junior official):

( a) a specified official;

( b) a member of the administrative, management orsupervisory body of a state-owned enterprise;

“specified official” means any of the following officials (including any such officials in an institution of the European Communities or an international body):

( a) a head of state, head of government, government minister or deputy or assistant government minister;

( b) a member of a parliament F47 [ or of a similar legislative body ];

F47 [ ( bb ) a member of the governing body of a political party; ]

( c) a member of a supreme court, constitutional court or other high level judicial body whose decisions, other than in exceptional circumstances, are not subject to further appeal;

( d) a member of a court of auditors or of the board of a central bank;

F46 [ ( e ) an ambassador, charg é d affairs or high-ranking officer in the armed forces; ]

F47 [ ( f ) a director, deputy director or member of the board of, or person performing the equivalent function in relation to, an international organisation. ]

(11) The Minister may prescribe a class of family member of a politically exposed person, for the purposes of paragraph (g) of the definition of “immediate family member” of a politically exposed person in subsection (10), only if the Minister is satisfied that it would be appropriate for the provisions of this section to be applied in relation to members of the class, having regard to any heightened risk, arising from their close family relationship with the politically exposed person, that such members may be involved in money laundering or terrorist financing.

Annotations:

Amendments:

F46

Substituted (26.11.2018) by Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 (26/2018), s. 16(a), (b), (d)(ii), (h), (i)(iii), S.I. No. 486 of 2018.

F47

Inserted (26.11.2018) by Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 (26/2018), s. 16(c), (e), (g), (i)(i), (ii), (iii), S.I. No. 486 of 2018.

F48

Substituted (14.06.2013) by Criminal Justice Act 2013 (19/2013), s. 9, S.I. No. 196 of 2013.

F49

Deleted (26.11.2018) by Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 (26/2018), s. 16(d)(ii), (f), S.I. No. 486 of 2018.