Ireland Anti-Money Laundering
While domestic money laundering (ML) threats are well understood by the authorities, Ireland
faces significant and increasing threats from foreign criminal proceeds. As a growing
international financial center, 1 Ireland is exposed to inherent transnational money laundering and
terrorist financing (ML/TF) related risks. The ML risks facing Ireland include illicit proceeds from
foreign crimes (e.g., corruption, tax crimes). Retail and international banks, trust and company
service providers (TCSPs), 2 lawyers, and accountants are medium to high-risk for ML, while virtual
asset service providers (VASPs) pose emerging risks. Brexit, the recent move of international banks
to Dublin, and the COVID-19 pandemic increased the money laundering risks faced by Ireland. The
Central Bank of Ireland (Central Bank) nevertheless has demonstrated a deep and robust experience
in assessing and understanding their domestic ML/TF risks; however, an increased focus on risks
related to transnational illicit financial flows is required. A thematic risk assessment undertaken by
the Anti-Money Laundering Steering Committee (AMLSC) of international ML/TF risks would
enhance the authorities’ risk understanding and is key to effective response to the rapid financial
sector growth. Introducing data analytics tools, including machine learning to leverage potentially
available big data on cross-border payments, would allow for efficient detection of emerging risks.
The results of this assessment should be published to improve the understanding of transnational
ML/TF risks and feed into the anti-money laundering and combating the financing of terrorism
(AML/CFT) policy priorities going forward.
Priority should be given to enhancing the breadth and depth of data gathering and analysis
of ML/TF risks in order to support the AML/CFT risk-based supervision of financial institutions
(FIs), especially given the fast-growing supervisory population in Ireland. The Central Bank has
a comprehensive and well-designed AML/CFT supervisory approach with depth of engagement
determined by an entity’s overall risk rating (inherent ML/TF risk and AML/CFT controls rating) and
informed by the 2016 national risk assessment (NRA) and more recent sectoral assessments.
However, given the considerable expansion of the financial sector, an augmentation of resources
and personnel would be necessary to maintain the current depth of supervisory engagement. Since
2017, the Central Bank has broadened access to data from its cohort of supervised entities, but
available cross-border data and analytical tools remain insufficient. While providing robust
assessment of domestic ML/TF risks, the current desk-based and on-site inspections conducted, may
need to be reassessed to ensure that they adequately reflect the increasing risks of the fast-growing
supervised entities with significant increase in related financial flows. In the last four years, the
number of supervised entities increased significantly (with increases in sectors classified by the
Central Bank as high and medium-high risk, including international banks, e-money institutions, and
1
Since the 2017 Mutual Evaluation Report, two large international banks have relocated their European Union (EU)
operations to Ireland, the number of e-money institutions has increased from 1 to 18 firms, and the number of
investment funds has increased from approximately 7,000 to 9,650, although the number of umbrella funds with
AML/CFT obligations has decreased from 2,581 to 1,402.
2
Per the 2022 TCSP risk assessment, TCSPs that are subsidiaries of financial institutions (approximately five percent
of the total number of TCSPs) and supervised by the Central Bank and those supervised by the Anti-Money
Laundering Compliance Unit (AMLCU) are considered medium-low risk in Ireland.
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fund administrators), and the volume of financial flows more than tripled. Broad access to data from
supervised entities coupled with robust analytical tools as well as improved resourcing and
upskilling will further contribute to maintaining the effectiveness of Central Bank’s risk-based
supervision by keeping pace with the changes in the sector. The Central Bank’s risk-based
supervision should continue focusing on domestic and international banks with a potential
reassessment of the supervision of international banks utilizing the results of analysis of
transnational flows and adjustment to the risk-based tools for banks. The Central Bank has a broad
enforcement toolkit and can impose measures ranging from directives to fines and should continue
to vigorously pursue enforcement actions in line with compliance breaches and risk-levels.
Commencement of the registration process for VASPs is a welcome move. A few minor legal
deficiencies remain with respect to customer due diligence (CDD) thresholds and the travel rule as
applicable to VASPs and will be addressed in an upcoming regulation. The Central Bank is currently
processing a significant number of applications for registration of VASPs and expects a high volume
of transactions in the sector. A comprehensive assessment of applicants is undertaken as part of the
registration process, with detailed engagement and outreach. The Central Bank should invest in
developing proper supervisory tools for the sector, provide adequate training to supervisors to meet
the demands of the sector, and increase resources (e.g., human, technical, budget) commensurate
with risks.
Efforts to inform and raise awareness of key ML/TF risks for lawyers (or solicitors),
accountants and TCSPs (professional gatekeepers) are positive developments, however,
inconsistencies across supervisors in resources, depth of supervision and available sanctions
undermine effectiveness. The Department of Justice’s Anti-Money Laundering Compliance Unit
(AMLCU) as well as self-regulatory bodies (SRBs) continue to make extensive efforts to improve the
understanding of the supervised population of their AML/CFT obligations through guidance,
training, and feedback. The recently published risk assessment of the TCSP sector is also a welcome
move and should inform supervisory engagement with the sector. Awareness programs could
improve compliance by supervised entities; however, suspicious transaction report (STR) filings in
the sector remain dismally low. The supervision of professional gatekeepers is not commensurate
with risk levels in the sector. Furthermore, fragmentation of supervision (except in the case of
solicitors and barristers, where there is only one designated supervisor for each), leads to
inconsistency in supervisory approaches and potential for regulatory arbitrage. The enforcement
toolkit of supervisors of professional gatekeepers is also different to that of the financial sector, with
limited options for imposing monetary penalties.
Ireland has made an important step forward with the creation of three beneficial ownership
(BO) registries in 2019 and 2020 for companies, trusts, and certain financial vehicles. 3 A
sectoral risk assessment for legal persons and legal arrangements was published in 2020 showing a
3
The Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies, Central Register
of Beneficial Ownership of Trusts, and the Beneficial Ownership Register for Certain Financial Vehicles (CFVs). This
note focuses solely on the Central Beneficial Ownership Register of Companies and Industrial and Provident
Societies, created in 2019.
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significant risk of ML for certain entities, particularly those with complex ownership structures. The
Pandora Papers recently highlighted potential misuse of limited partnerships and, in particular,
suggested that a lack of transparency in respect of the third-country partners based in certain
jurisdictions meant that some limited partnerships could not be easily subject to scrutiny. Although
significant efforts have been made to collect the information, the Central Beneficial Ownership
Register of Companies and Industrial & Provident Societies should ensure registration is complete
and up to date. Furthermore, while verification is being regularly conducted, that Register should
also enhance accuracy and access to the information. The professional gatekeepers could assist in
improving the quality of BO information, promptly submitting and updating information as well as
discrepancies reports. Finally, streamlining the submission of discrepancies reporting by supervised
entities during their own CDD activities could enhance verification of the data and its timeliness.
This Note provides a targeted review of Ireland’s AML/CFT regime in the context of the 2022
Financial Sector Assessment Program (FSAP). 4 It builds upon the 2017 Financial Action Task Force
(FATF) Mutual Evaluation Report, the 2019 and 2022 follow-up reports, information provided by the
authorities, and publicly available materials. Staff analysis greatly benefitted from discussions in a
virtual setting from February 14–18, 2022, with key agencies, particularly, the AMLSC, the Central
Bank, the Financial Intelligence Unit (FIU), and the Ministry of Justice. The Fund FSAP team deeply
appreciates the staff of these agencies for their professionalism, patience, and candor throughout
the process.
The note highlights the key developments and progress made by the authorities in three
important AML/CFT areas, notably (i) understanding of ML/TF risks including in relation to
transnational flows, (ii) risk-based supervision of banks, solicitors, accountants, and TCSPs, and
(iii) availability of beneficial ownership information of legal persons and arrangements.
Table 1. Ireland: Main Recommendations
Recommendation
Responsible
Agency
Timeline
AMLSC
ST
Understanding of Risk and AML/CFT Priorities
1. Understanding of ML/TF risks. Conduct and publish a thematic
assessment on transnational aspects of ML/TF risks and
communicate it domestically to enhance the understanding of
related risks.
4
Under the IMF’s FSAP policy, every FSAP should incorporate timely and accurate input on AML/CFT issues. Where
possible, this input should be based on a comprehensive AML/CFT assessment conducted against the prevailing
standard. See the Acting Chair’s Summing Up—Review of the Fund’s Strategy on Anti-Money Laundering and
Combating the Financing of Terrorism—Executive Board Meeting 14/22, March 12, 2014
(http://www.imf.org/external/np/sec/pr/2014/pr14167.htm).
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Table 1. Ireland: Main Recommendations (Concluded)
2. Reprioritize AML/CFT policy. AML/CFT national policy and
institutions should prioritize tackling ML/TF risks related to crossborder and non-resident activity.
AMLSC
ST
3. Banks and other FIs. Enhance risk-based supervision through
broader data collection (particularly cross-border data), use of
analytical tools, proportionate and dissuasive enforcement
actions, and increased resourcing.
Central Bank
ST
4. VASPs. Commence risk-based supervision of the sector as a
priority, with enhancements in resourcing and upskilling as
appropriate.
Central Bank
ST
5. Assessment of Threats. Use broader data and analytical tools to
enhance the understanding of threats facing individual FIs,
including links to higher risk jurisdictions and non-resident
exposure.
Central Bank
ST
6. Increased Resources. Recruit additional AML/CFT qualified
supervisors and risk experts and provide them with the necessary
tools (e.g., data, IT solutions) to effectively perform their functions.
Central Bank
ST
7. Lawyers, accountants, and TCSPs. Oversee efforts to ensure
consistency of supervisory approaches over these sectors,
including considering the determination of the mandate and
powers of a regulatory body with the role of ensuring consistency
in supervisory approaches among SRBs. Supervisors to have
powers to impose monetary penalties for contraventions of
AML/CFT obligations.
AMLSC with
AMLCU and
relevant
SRBs
ST
Central BO
Registers
ST
AML/CFT Supervision
Entity Transparency
8. Beneficial ownership: Make the BO information of legal entities
and arrangements more accurate and easily accessible.
I = Immediate (now to one year); ST = Short Term (within one to three years)
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ML/TF RISK AND CONTEXT
1. Ireland faces significant ML threats from foreign proceeds of crimes. In addition to the ML
threat from domestic proceeds of crime, such as drug crime, fraud, or smuggling, Ireland is facing
substantial ML threat from foreign proceeds of crime due to the prominence of Ireland’s financial
sector. The ML/TF risks from abroad 5 include foreign proceeds of crime (e.g., transnational
organized crime, tax evasion, overseas corruption) flowing to Ireland for integration into the
legitimate economy, funds intended for ML/TF passing through its financial sector and outflows of
domestic proceeds of crime for ML layering.
2. Rapid growth in the size of the Irish financial center over the last three years has
increased further the ML/TF risks from non-resident and cross-border activity. The total
financial sector assets have increased by 30.2 percent between 2017 and 2020 to EUR 6.57 trillion,
mostly driven by the growth of investment funds, which are seen as a sector particularly vulnerable
to ML. The value of cross-border payments in Ireland has increased at a significantly higher rate—
more than threefold from an already high base, a drastic change from the stable flows over the
previous years. This rapid growth has deepened Ireland’s already strong international links and
increased its importance as an international financial center, with associated increase in the inherent
ML/TF risks. Relocation of FIs and redirection of some financial sector activity to Ireland as a result of
Brexit has contributed to the appearance of new ML/TF threats in Ireland. Increasing use of
authorization in Ireland to perform the activities throughout the Single Market (i.e., single
authorization principle or passporting) has also impacted Ireland’s ML/TF risk profile, particularly as
related to the payment services. Financial flows to offshore financial centers6 have also risen rapidly
in recent years, increasing fivefold in value since 2017, and representing emerging ML/TF risks as
some of these jurisdictions have lower effectiveness of AML/CFT controls, including supervision, do
not cooperate for tax purposes, and focus on provision of services to non-residents, a higher ML/TF
risk activity.
3. The authorities demonstrated a deep and robust understanding of domestic risk of
ML/TF, but to a lesser extent of risks related to transnational aspects of ML and TF. The risk
assessments, including the NRA, identified a broad range of domestic ML/TF threats and
vulnerabilities (banks, investments funds, payment institutions), but the depth of the analysis of
international ML/TF risks appears not to be in line with the level of international ML/TF risk Ireland is
facing. Moreover, the 2016 NRA as a basis of national ML/TF risk understanding took place before
the rapid growth and evolution of the financial sector that has substantially increased and changed
Ireland’s international ML/TF threat exposure. 7
5
Reference to “abroad” also includes Northern Ireland.
6
As identified in the past IMF Staff Assessments on Offshore Financial Centers.
7
There have been sectoral updates to the NRA since 2016, including the gambling sector (2018), new technologies
(2019); legal persons and legal arrangements (2020); and TCSPs (2022).
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4. The authorities’ good understanding of overall ML/TF risks and domestic coordination
provides a solid foundation for broadening risk assessments to include cross-border ML/TF
threats. Considering the rapid evolution and growth of the financial sector, we recommend
conducting a thematic assessment on transnational aspects of ML/TF risks, including non-resident
and cross-border ML/TF threats. This thematic assessment should aim at the analysis of new and
emerging ML/TF risks and rely on the broad range of quantitative indicators, 8 which should crucially
include cross-border payments statistics. Specifically, it should analyze in detail the business models
and geographical reach of FIs and associated ML/TF risks, emergence of new ML/TF risks from
abroad, scrutiny of economic rationale for the financial flows with potentially higher-risk countries
and exposure of various sectors to cross-border and non-resident activity. The assessment should
also avoid over-reliance on the views and perceptions of public sector’s and FIs’ AML/CFT experts
and would benefit from the views of experts with developed understanding of the recent rapid
growth of the financial sector and its AML/CFT implications, including of independent experts. The
assessment should also incorporate analysis of potential vulnerabilities to tax evasion and the
impact of recent changes in the main counterpart’s international tax policies.
5. An enhanced understanding of transnational ML/TF risks can inform fine-tuning of
national AML/CFT policy priorities to address increasing cross-border and non-resident ML/TF
risks. The Central Bank, which is already attentive to non-resident ML/TF risks, can incorporate the
results of the thematic assessment on transnational ML/TF risks into its risk-based approach to
supervision, leveraging enhanced understanding of the exposure of various financial sector
8
Such quantitative indicators can be based, for example, on the supervisory and regulatory reporting of FIs, trade
statistics, portfolio, and direct investment surveys.
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subsectors to prioritize supervisory resources, enhance periodic data collection and institutional risk
assessment with risk indicators on cross-border and non-resident exposure, leveraging an evolved
understanding of higher-risk countries. The FIU can use the thematic assessment’s results for
prioritization of its operational analysis and to conduct complementing strategic analysis going
forward. Law enforcement, which tends to focus mostly on domestic threats, should integrate the
focus on transnational ML/TF into its policies and objectives, including development of necessary
capacity and skills.
Box 1. Data Analytics for Monitoring Cross-Border Flows
High and increasing value and volume of cross-border payments in Ireland, rapidly growing supervised
population, availability of large volumes of relevant data in an advanced economy, as well as sophistication
of its financial sector, provide an opportunity for the authorities to apply advanced data analytics to develop
supervisory technology for efficient, effective, and timely detection and assessment of cross-border ML/TF
risks. Cross-border payments data from various payment infrastructures can be supplemented with foreign
trade in goods and services, portfolio, direct investments, financial instruments operations, balance of
payments, international investment position data, investment funds’ activity to identify unusual payments
potentially unexplained by economic rationale. Such data analytics can also incorporate various indicators of
increased ML/TF risk, using the authorities’ risk understanding of inherent ML/TF risks and context of various
jurisdictions, ML/TF red flags, trends, typologies, open-source data. The data analytics approach can also
incorporate indicators related to foreign countries’ vulnerability to tax evasion. As Ireland’s financial sector
development is very dynamic, we suggest establishing a permanent national mechanism for monitoring
cross-border financial flows on a higher frequency than the sectoral risk assessment.
The authorities can also leverage unsupervised machine learning algorithms to efficiently identify financial
institutions exposed to significant cross-border ML/TF risks and unusual payments potentially related to
illicit financial flows to receive early warnings about evolving payments patterns and corresponding changes
in the ML/TF risks. The Fund’s outlier detection machine learning algorithm1,, based on the global crossborder payments since 2013 and incorporating various indicators of lower and higher ML/TF risks2, has
flagged the recent increase in the outflows as unusual, with significant number and value of outlier
payments.
The Fund’s cross-border payments outlier detection algorithm is based on the isolation forest approach
(Fei Tony Liu, Kai Ming Ting, and Zhi-Hua Zhou; 2008).
1
These indicators include bilateral trade, portfolio and direct investments, average transaction value, appearance of new
payment corridors, strength of AML/CFT regime, financial secrecy, potential harmful tax practices, corruption perceptions.
The payment amounts are normalized on the ordering country level.
2
AML/CFT RISK-BASED SUPERVISION OF BANKS AND
VASPS
6. The Central Bank is the designated AML/CFT supervisor for FIs. The financial sector in
Ireland comprises banks, insurance companies, credit unions, investment and insurance
intermediaries, mortgage intermediaries, e-money institutions, funds and funds administrators,
investment firms, stockbrokers, money lenders, exchanges, and money transmitters. The Central
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Bank is also the designated supervisor for TCSPs that are subsidiaries of credit or FIs. 9 Further, per
the Criminal Justice (Money Laundering and Terrorist Financing) Amendment Act of 2021 (CJ
Amendment Act, 2021), the Central Bank is responsible for the regulation and supervision of VASPs.
The Central Bank’s supervisory responsibilities are divided over four teams within its Anti-Money
Laundering Division.
7. The number of FIs has increased considerably since the publication of Ireland’s 2017
mutual evaluation report (MER), from approximately 9,500 institutions in 2016 to 12,536
institutions by end-2021 (with significant increases in high and medium-high risk firms). This
growth was largely a consequence of the Brexit vote with large international banks, investments
funds, e-money institutions and other FIs shifting operations to Ireland to continue to benefit from
EU passporting rules. While not all entities (e.g., sub-funds) are the focus of supervisory
engagements, the significant increase in the size of the sector, along with the inclusion of VASPs in
the supervisory population, is a cause for serious strains on the Central Bank’s supervisory resources,
which has seen no commensurate increase in the same period. Recognizing the challenges arising
from the increased number of firms, augmentation of technical and human resources in line with the
growth of the sector would be necessary to maintain minimum supervisory engagement on a risksensitive basis at the level and quality observed during and continuously delivered since the 2017
MER.
8. The Central Bank undertakes extensive graduated supervision of the financial sector. The
Central Bank has a well-designed and comprehensive minimum engagement model, whereby the
frequency and intensity of minimum supervisory engagement is determined by sectoral and entity
level risk rating. Beyond this minimum engagement, the Central Bank also applies supervisory
resources to additional supervisory engagements/activities to further mitigate ML/TF risks in the
financial sector. During 2021, the Central Bank undertook 34 inspections, 87 review meetings, and
the issuance of 630 Risk Evaluation Questionnaires (REQs) to firms. Further, in 2021, the Central Bank
participated in 31 AML/CFT supervisory colleges for firms with branches and subsidiaries established
in Ireland and hosted 6 AML/CFT supervisory colleges. The Central Bank also has a very robust
awareness raising and sensitization framework and issues frequent sectoral guidance on AML/CFT
obligations in the financial sector. The Central Bank uses a wide range of communication channels
to ensure that the supervisory population is well-aware of their obligations, including guidelines,
bulletins, Dear CEO letters, and speaking engagements.
9.
The Central Bank has a detailed risk assessment model guiding its supervisory approach,
which could be further enhanced by increased input on cross-border risks and their evolution.
The Central Bank has an independent risk assessment model that takes into account both
internationally accepted inherent risk factors (scale and complexity, product type, geographic risk,
etc.) as well as AML/CFT controls to assign risk ratings, which in turn are further tailored with
supervisory engagements and information from other stakeholders. Based on risk levels, entities are
9
TCSPs supervised by the Central Bank account for under five percent of the total TCSP population in Ireland.
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divided into ultra-high risk, high risk, medium-high risk, medium-low and low risk categories, which
determines depth of engagement. Domestic retail banks and the largest money remittance firm
currently occupy the highest risk category (ultra-high-risk). This supervisory approach would be
further enhanced by more detailed information on cross-border risks. For instance, determination of
higher risk jurisdictions is presently guided by the EC’s list and findings of international
organizations without accounting for Ireland’s inherent ML/TF risks from cross-border business
relationships, including payments to or from Ireland. This is despite the striking increase in
inflow/outflow patterns since 2017 as outlined above. A thematic risk assessment of cross-border
threats referenced above and undertaken by central authorities would be valuable in informing
depth of engagement. Further, insufficient focus on cross-border payments data, mostly conducted
by international banks is a lacuna in the Central Bank’s supervisory approach. It is vital that the
Central Bank relies on broader sources of data, particularly sources of aggregated transactional data
(notably, cross-border payments) as an input to its determination of entity level and sectoral risk for
minimum engagement. Notably, the Central Bank’s Anti-Money Laundering Division includes a
specialized Risk Team that could prioritize development of models for analyzing broad cross-border
data.
10. Since 2017, the Central Bank has significantly broadened access to data from supervised
entities; however, available cross-border data and analytical tools remain insufficient. Notably,
since 2020, the Central Bank requires annual returns in the form of REQs from all supervised entities
regardless of their risk level. REQs collect detailed information on client profiles, operations, and
geographical reach of the supervisory population as well as the strength of their AML/CFT controls.
While REQ information will greatly enhance development of entity risk-profiles, the existing data
analysis system would be insufficient to adequately process the higher volumes of data. The Central
Bank should update its data analytic toolkit to allow effective analysis of larger volumes of data, for
example aggregating available data to monitor higher-level evolution of ML/TF threats as well as
scrutiny of the pattern of cross-border activity on the level of individual FIs for more efficient
identification of institutions and areas for further scrutiny. Investing in Suptech solutions, including
those relying on network analysis, machine learning, and big data, could aid these efforts. The
development of the Central Bank’s bank-wide data strategy presents an excellent opportunity to
consider more sophisticated data analysis tools for AML/CFT risk-based supervision.
11. The Central Bank’s thematic supervisory engagements focus on the control frameworks
and legal obligations of all firms and is very robust in assessing the strength of controls
against laundering of proceeds of domestic crimes. The Central Bank’s recent supervisory
engagements covered themes such as governance, CDD, transaction monitoring, STRs, BO, and
politically exposed persons. On STRs, the FIU and Revenue Administration Suspicious Transactions
Unit noted that they have seen improvements in quality and quantity of STRs from the financial
sector, but STRs related to suspicious cross-border activities are fewer. However, threats from cross
border illicit financial flows related to foreign proceeds of crimes are increasing at a fast pace and
could potentially be channeled through the Irish banking system. To keep pace with the changes in
the financial sector landscape, the Central Bank should ensure that thematic inspections on CDD,
transaction monitoring, and STRs with international banks focus on cross-border activities that could
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be related to foreign proceeds of crimes (e.g., tax evasion, transnational aspects of corruption). The
above-referenced thematic assessment of cross-border risks could help further fine-tune assessment
of controls.
12. Commencement of the registration process for VASPs is a welcome move. With the
promulgation of the CJ Amendment Act, 2021, Ireland’s AML/CFT framework for the VASP sector is
almost entirely aligned with the FATF standards. A few minor deficiencies remain with respect to
CDD thresholds and the travel rule as applicable to VASPs. These deficiencies are expected to be
addressed in the recast EU 2015 Regulation which, will be directly applicable to Ireland, once
adopted. Further, pursuant to the CJ Amendment Act, 2021, the Central Bank is currently processing
a significant number of applications for registration of VASPs and expects a high volume of
transactions in the sector. A comprehensive assessment of applicants is undertaken as part of the
registration process, with detailed engagement and outreach. Once a VASP is registered and
supervision commences, individual VASPs’ entity level risk rating will determine ongoing supervisory
engagement. In the medium-long term, the authorities should also consider a thematic risk
assessment of the virtual asset sector to further enhance the Central Bank’s continuous assessment
of entity-level risk. The Central Bank should also invest in developing proper supervisory tools
(considering, for instance, tailored data-collection tools and blockchain analysis solutions) for the
sector, ensure upskilling to meet supervisory demands in the sector, and increase resources (e.g.,
human, technical, budget) commensurate with risks.
13. The Central Bank has a broad enforcement toolkit and can impose measures ranging
from directions for remedial action to monetary penalties and should continue to vigorously
pursue enforcement actions in line with compliance breaches and risk-levels. The Central Bank
has a wide range of sanctions available in case of uncorrected breaches of AML/CFT obligations.
Enforcement actions can result in, inter alia, reprimands, monetary penalties, restrictions, suspension
or revocation of authorizations, and directions including those disqualifying/restricting concerned
persons from serving management positions. Since 2015, nine enforcement actions in respect of
suspected contraventions of AML/CFT requirements have resulted in monetary penalties. 10 The
Central Bank is in the process of enhancing the effectiveness of its enforcement framework through
the Individual Accountability Project, which will, inter alia, enhance its ability to take enforcement
action against individuals, in appropriate circumstances. The proposed Individual Accountability
Framework could improve sanctioning of individuals for compliance breaches. To ensure that
enforcement results in compliant outcomes, the Central Bank should vigorously pursue enforcement
actions proportionate to level of controls failures detected and the entity’s ML/TF risk exposure. The
authorities should also make full use of the broad range of enforcement tools (particularly criminal
penalties against corporations and senior management officials) commensurate to the scale of the
AML/CFT violations.
10
The penalties depend on the extent of AML/CFT control failures and scale of the concerned entity’s operations and
range from approximately a few hundred thousand euros to upwards of €3 million.
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AML/CFT RISK-BASED SUPERVISION OF
PROFESSIONAL GATEKEEPERS
14. Continued efforts to inform and raise awareness of key ML/TF risks for lawyers
(solicitors), accountants and TCSPs (professional gatekeepers) are very positive
developments. The AMLCU, as well as self-regulatory bodies, continue to make extensive efforts to
improve the understanding of supervised populations of their AML/CFT obligations through
detailed guidance, training, and feedback. Awareness programs could improve compliance by
supervised entities; however, STR filings in the sector remain dismally low.
15. Supervision of professional gatekeepers is fragmented. 11 AML/CFT supervisors for
professional gatekeepers include the AMLCU for TCSPs not supervised by the Central Bank or
designated accountancy bodies (DABs), 12 the Law Society of Ireland (a self-regulatory body) for
solicitors, 13 the Legal Services Regulatory Authority (LSRA) for barristers, the Property Services
Regulatory Authority (PSRA) for property service providers and six designated accountancy bodies
(DABs) (self-regulatory bodies) for their members who are accountants, tax advisors, auditors or who
provide TCSP services. For accountancy, the majority of accountants in Ireland are members of DABs
and are supervised by the relevant DAB, while the AMLCU supervises those accountants who are not
members of a DAB. The supervisory population of gatekeepers has increased since 2016 with the
exception of solicitor firms. Following recommendations in the MER, the AMLCU has also taken
measures to broaden its supervisory reach for TCSPs and accountants not otherwise supervised.
16. Supervision of TCSPs, accountants, and solicitors is not commensurate with risk levels in
the sector, with some supervisors largely focusing on improving awareness rather than on
supervision and enforcement. The NRA classifies ML/TF risk within the professional gatekeepers as
medium high. Since the NRA data of 2016, the post-Brexit boom in investment activity in Ireland
could also contribute to increased importance of services provided by professional enablers. In a
very welcome move, a risk-assessment of the TCSP sector was published in March 2022 with
findings widely disseminated among the supervisory population. 14 In the medium to long-term,
updated risk-assessments for accountants and solicitors would help guide supervisory
Supervision of designated non-financial professions and businesses (DNFBPs) depends on whether there is already
a regulatory body responsible for regulatory supervision of the designated person cohort or not—where there is a
body that generally regulates the cohort, they are the AML supervisor, where there is not, the AMLCU is the
supervisor by default
11
12 For the TCSP sector the Central Bank supervises TCSPs that are subsidiaries of regulated entities, the DABs
supervise their members who provide TCSP services, while the AMLCU supervises those TCSPs not otherwise
supervised
Barristers are supervised by the Legal Services Regulatory Authority. However, given the scope of their duties,
barristers are considered medium-low risk in Ireland and are not included in the scope of the assessment.
13
14
The 2022 TCSP Risk Assessment is available at https://www.gov.ie/en/publication/e21f7b-national-riskassessment-money-laundering-and-terrorist-financing/. According to the risk assessment, TCSPs supervised by the
designated accountancy bodies are considered medium-high risk for ML while TCSPs supervised the Central Bank
and AMLCU are considered medium-low risk for ML.
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engagements. Further, while the AMLCU and several SRBs undertake systematic risk-based
supervision, the focus of some supervisors is still largely on improving awareness of the sectors’
AML/CFT obligations rather than supervision or enforcement. Supervision should be informed by
regularly updated risk assessments and should integrate wider sources of data and analytical tools
to tailor supervisory engagement.
17. Fragmentation of supervision leads to inconsistency in supervisory approaches and
potential for regulatory arbitrage. Due to the number of supervisors in the DNFBP sectors,
including SRBs, supervisors regularly participate in forums to discuss supervisory approaches and
best practices. Further, in a very welcome move, the AMLSC broadened its membership in 2021 to
include SRBs supervising legal and accountancy sectors, the LSRA, the PRSA, the Charities Regulator,
and some other relevant stakeholders. However, given the significant variations among supervisors
of professional gatekeepers in understanding of risks, depth of supervision, and available
sanctions, 15 these efforts may be insufficient to prevent arbitrage in the TCSP and accountancy
sectors. The authorities should take steps to ensure consistency in supervision of higher risk
professional gatekeepers. A good practice would be to task a regulatory body with the role of
ensuring consistency in supervisory approaches among SRBs, with appropriate sector specific
safeguards. This is aligned with the 2021-EU AML proposals. It is notable that the mandate of the
Irish Auditing and Accounting Supervisory Authority (IAASA) 16 includes the independent and
effective supervision of the Prescribed Accountancy Bodies’ (PABs) regulatory obligations and
prompt, robust and proportionate action in instances of non-compliance. However, even with
oversight of supervisors, jurisdictions sometimes struggle to maintain consistency in depth of
supervisory engagement. Setting up risk-sensitive minimum supervisory standards and/or tasking
better-resourced bodies with supervision of higher risk sectors and entities could also be
considered.
18. The enforcement toolkit of supervisors of professional gatekeepers is limited. The
AMLCU has no power to issue administrative fines and is limited to issuing legal directions or
revoking authorizations in the case of TCSPs or liaising with An Garda Siochána with a view to a
criminal prosecution being pursued. Most SRBs are also limited in sanctions to issuance of
orders/reprimands/directives and withdrawal of licensing, although some accountancy bodies are
empowered to impose fines. 17 Following the Minister for Justice bringing a working group report
recommending expanding the regulatory toolkit of the AMLCU to government in December 2021,
the government decided that the AMLCU should be given powers to issue administrative fines for
strict liability compliance breaches by supervised entities by end Q2-2023. Such powers could highly
15
This inconsistency in supervisory approaches for the accountancy sector was also noted in MER.
16
IAASA – Our Remit, https://www.iaasa.ie/About/Our-Remit.
17
The Law Society may impose disciplinary sanctions on solicitors who fail to observe rules of professional conduct.
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enhance the AMLCU’s sanctioning framework. Similarly, all supervisors, including SRBs, should have
powers to impose monetary penalties, at the minimum, for strict liability offences. 18
ENTITY TRANSPARENCY AND AVAILABILITY OF
ACCURATE BENEFICIAL OWNERSHIP INFORMATION
19. Ireland has taken an important step forward with the creation of three BO registries in
2019 and 2020 for companies, trusts, and certain financial vehicles. A sectoral risk assessment
for legal persons and legal arrangements was published in 2020 19 showing a significant risk of ML
for certain entities, particularly those with complex ownership structures. The Pandora Papers
recently highlighted potential misuse of limited partnerships and, in particular, suggested that a lack
of transparency in respect of the third-country partners based in certain jurisdictions meant that
some limited partnerships could not be easily subject to scrutiny. The authorities should however
continue advancing legal reforms and their implementation to limit the risk of misuse of legal
companies. More precisely, a review of the 1907 Limited Partnership Act was launched with a view to
strengthening the legislation. The Companies (Corporate Enforcement Authority) Act 2021 contains
a new requirement for company directors to use their personal public service number (PPSN) when
incorporating a company, making an annual return or changing director’s details on the Register of
Companies. The new requirement is expected to come into force in early 2023. This would help
strengthen the accuracy and transparency of the register.
20. Although significant efforts have been made to collect the information, the central
Beneficial Ownership Register should ensure registration is complete and up to date. Ireland
established a Central Register of Beneficial Ownership of Companies and Industrial and Provident
Societies on June 22, 2019 under SI 110 of 2019. 20 From that date, relevant entities have been
obliged to file information regarding their beneficial owners with the Central Register and to update
such information if there are any changes to it. Statistics related to progress in the registration of
companies and societies are publicly available to the end of 2020. 21 At that time, it is reported that
almost 189,000 (81 percent) of companies and 616 societies (64 percent) had filed beneficial
ownership information with the register. 22 While the register is still in its early stages, it would be
important to ensure the registration of companies is complete and up to date.
18
The AMLCU and Law Society have made calls for the power to apply monetary fines for contraventions be given to
competent authorities in addition to the Central Bank. As noted above, the AMLCU will be afforded powers to
impose sanctions for strict liability offences by mid-2023.
19
https://www.gov.ie/en/publication/e21f7b-national-risk-assessment-money-laundering-and-terrorist-financing/
20
https://rbo.gov.ie/
21
See 2020 Annual Report https://rbo.gov.ie/images/2020_RBO_Annual_Report_Final.pdf
The Irish delegation is following closely the evolution of the standards in this area including the requirement to
publish statistics. The team was unable to find statistics on-line for the other two registries. The authorities are
encouraged to regularly published statistics on-line for the other two registries.
22
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21. While verification is being regularly conducted, the Central Beneficial Ownership
Register should enhance accuracy and access to the information. 23 While the 2020 Annual
Report mentions that only two discrepancies notices were received from competent authorities, and
none were received from designated persons and the general public, 24 the feedback gathered
during the mission seems to point to a larger number of discrepancies noticed, signaling accuracy
concerns. While the relevant statistics may be updated in upcoming annual reports, it would be
important for the register to look into the source of the discrepancies and explore additional
verification mechanisms to ensure the accuracy of the beneficial ownership information collected.
Inter-operability with other registers, such as the Central Register of Beneficial Ownership of Trusts
and Beneficial Ownership Register for Certain Financial Vehicles (CFVs), as well as cross-checks with
other public beneficial ownerships registers, should also be considered. For designated persons who
form a business relationship with a relevant entity or are taking CDD measures in relation to a
relevant entity, and for members of the public, there is a fee to access the register information, only
payable by credit card. The register may want to consider facilitating access for designated persons
so that there are alternative ways of access, allowing for a high-volume of simultaneous
consultations, not limited by single transactions. In addition, easier access to information could
facilitate crowdsourcing of the accuracy of the information.
22. The professional gatekeepers through the effective application of CDD could assist in
improving the quality of beneficial ownership information. Designated persons (including the
full range of FIs and DNFBPs) are obliged to collect BO information of legal entities or arrangements
utilizing financial or professional services. Following up on the MER recommendations, Ireland now
has an obligation for designated persons to identify and verify the person purporting to act on
behalf of the customer. The legislation also incorporates Article 3 of the Fourth Money Laundering
Directive of the EU whereby there is a requirement to identify senior managing officials if all means
to identify the BO of a legal person are exhausted. Existing customers are now subject to CDD at any
time, including when the relevant circumstances of a customer have changed and, where warranted,
by the ML/TF risk. Ensuring consistent quality in the CDD procedures across financial institutions and
DNFBPs, including for professional gatekeepers, is key, in particular, as there is an increased use in
complex structures. In addition, streamlining the submission of discrepancies by supervised entities
with AML/CFT obligations during their own CDD activities could enhance verification of the data and
its timeliness.
The mission focused on the Central Beneficial Ownership Register of Companies and Industrial and Provident
Societies.
23
The authorities shared that there was a significant increase in the number of submissions received by the RBO in
2021, as well as the number of Non-Compliance Notices (NCNs) and Discrepancy Notices (DNs) received in 2021,
particularly from designated persons.
