Asset Management & Investment Funds Q&A - June 2020

Question

Are Irish Funds and other Irish Regulated Financial Service Providers (Designated Persons) obliged to notify the Central Bank of Ireland where they become aware that a beneficial owner of the Designated Person is convicted of certain offences?             

Answer

Yes.

The European Union (Money Laundering and Terrorist Financing) Regulations 2019 (the Regulations) introduced new requirements on Designated Persons to notify the Central Bank of Ireland (CBI) within 30 days of becoming aware that any of their management function holders or beneficial owners are convicted of an offence under the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2018 (the CJA), or under other specified legislation relating to financial services, fraud, etc, including outside the State (a Relevant Offence). The full list of Relevant Offences is set out in Schedule 1 of the Criminal Justice Act 2011. Failure to make the disclosure will constitute a criminal offence punishable by a fine and/or imprisonment.

Separately, any person who holds a management function in a Designated Person and any beneficial owner of a Designated Person will also have their own obligation to notify the CBI of their conviction of a Relevant Offence within 30 days of the conviction.

The Regulations also require Designated Persons to have in place "appropriate procedures" for their employees, or persons in a comparable position, to report a contravention of the CJA internally through a specific, independent and anonymous channel.

Designated Persons should ensure that they have in place appropriate policies and/or procedures addressing the requirements for: (i) internal reporting of breaches of the Act; and (ii) the disclosure to the CBI of relevant convictions. Firms already subject to similar reporting or whistleblowing requirements will need to ensure that these new requirements are reflected in their existing processes.

For more detail and analysis on this topic, please read our November 2019 update here.

For more information in relation to this topic please contact your usual contact on the A&L Goodbody Asset Management & Investment Funds team.

Date published: 29 June 2020