Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2020

First Stage: 8 Sep 2020
Oireachtas Link:

Bill entitled an Act to amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 to give effect to Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU; and to provide for related matters.

Ivana's Contributions

Report and Final Stages: 15/02/2021

I join in thanking the Minister of State for moving these amendments, which I fully support on behalf of Labour. It is very welcome to see common sense prevail, as Senator McDowell said. It is a good day for the Seanad as regards reforms being made here as a result of Private Members' and Opposition amendments being tabled. Clearly, however, there has been a problem with the overreach, as I said the other day, of these provisions. I should hasten to say, in the spirit of levity, that Deputy Howlin first raised the issue of a member of Labour's national executive being concerned to discover that they too were covered by the PEP definition, so it is not that Labour has any monopoly on having persons on its executive councils or on national bodies-----

Senator Michael McDowell, 'I did not want to mention Sinn Féin and-----'

-----who are covered. Joking aside, this is clearly a serious matter as regards political organisation, democracy and attracting people to become involved in political parties. That is why I very much welcome these amendments. I also welcome the Minister of State's positive comments on the previous Stages regarding the Magnitsky Act that Deputy Howlin and I, and others in Labour and other parties, have been proposing. It is a long-overdue reform, so I thank the Minister of State for that.

I ask the Minister of State to bring similar common sense to bear in respect of another aspect of this Bill to which my attention was, unfortunately, drawn too late for me to table amendments on it. I was contacted over the weekend by the Union of Students in Ireland, USI. The latter has legal advice on this and is concerned that because of later provisions in the Bill, namely, section 26 and related sections, every students' union which has a board of trustees will have to register every student as a beneficiary, and when any student drops out, it will have to update the register accordingly. Clearly, this has massive implications for students' unions. They are very concerned. They have had legal advice on the matter. I myself looked at section 26, which inserts a new section 106ZD into the 2010 Act. Subsection (5) of that new section provides an exemption for bodies established for the purpose of promoting amateur games or sports so, clearly, the GAA had similar concerns but at an earlier stage was provided with an exemption - not just the GAA, but any amateur sports bodies. It seems that there is a similar exemption for charitable trusts.

I know it is too late in the day to amend this if, indeed, it is a problem. It is too late in the day to amend it in the Seanad, but given that our amendments are now due to go back to the Dáil, I ask that an amendment be made in the Dáil to address this issue, if indeed it is an issue. As I said, I have not had time to look into this in more detail because it came to my attention so late. However, I am conveying, on behalf of the USI, a serious concern that this will create a major logistical and operational problem for students' unions. I know from Trinity College Dublin Students' Union that many unions have boards of trustees now. I am on the board of Trinity College Dublin Students' Union so I should declare an interest. These were set up with a view to ensuring good governance for students' unions. Many of us, me included, came into politics through student union activism. It is really important that common sense prevails and that we do not see unforeseen consequences for bodies such as students' unions as a result of this Bill, in particular section 26 and the related sections related to trusts and trustees. I ask again that this be looked at by the Minister of State and his Department. The USI, I am sure, will make contact as well, but I ask that a sensible approach be taken similar to that which was taken in response to the concern Senator McDowell, I and others had raised about the PEP provisions.

Second Stage: 01/02/2021

I welcome the Minister of State to the House and I welcome this Bill on behalf of the Labour Party as my colleague, Deputy Howlin, did in the Dáil. It is an extremely important area of focus. It is a complex area and the Bill is largely technical in nature.

I join other colleagues in expressing concern at the delay in bringing this Bill forward. It was introduced on Second Stage in the Dáil on 22 September last and took three months to proceed through the Dáil. It is a concern that there have been such delays, even at that late stage following its introduction in the Oireachtas. We are happy to support it and to expedite its passage in any way we can but it is most unfortunate to see that we are already in breach of the timeline set out in the EU directive and have already been fined €2 million, as I understand. That €2 million could have been better spent enhancing our capability and capacity to enforce the measures in the legislation and providing necessary enforcements against the transnational aspect of money laundering which is directly addressed in the legislation.

Deputy Howlin raised on Second Stage in the Dáil the issue of resourcing of the enforcement bodies and I will refer to those briefly. We have the Garda National Economic Crime Bureau, GNECB, formerly the Garda Bureau for Fraud Investigation, GBFI. I understand the GNECB is now the main entity that will oversee the implications and enforcement of this legislation and the rules in it, as well as the rules in the primary legislation on money laundering, although the Criminal Assets Bureau and other agencies will also be involved. Is the GNECB adequately resourced for the task? Deputy Howlin recently asked a parliamentary question seeking the full complement of the GNECB, which he found to be 72 gardaí, 19 civilian staff and three accountants. The question is whether that provides sufficient expertise, particularly on the financial side, to deal with the sort of complex transnational crime that is being targeted through this legislation. I understand the complement of accountants on the GNECB has not been greatly enhanced since the GBFI was in operation, even though the volume of cash and resources flowing through Ireland has increased immeasurably and is likely to increase further with the advent of Brexit.

Colleagues across this House and elsewhere will be aware of the huge role that Ireland plays in international financial services. Some 250 leading financial services firms operate out of Ireland, half of the world's top 50 banks have representation and transact business in Ireland and more than €1.8 trillion in funds are administered from Ireland. We have all seen what impact that has on our GDP, so I will not go through that. Clearly, we are not a small player in international financial services and that has implications for any legislation dealing with financial crime and money laundering on a transnational basis. Our reputation has been significantly dented in the past by measures such as the double Irish and particular mechanisms used to attract foreign direct investment. We have to be clear not only that we have the legislative infrastructure in place but also that we have in place the mechanisms necessary to ensure financial services can operate on our island subject to proper enforcement and oversight. It is unfortunate in that context that we have seen this lengthy delay in the implementation of the EU directive. That does not send out an appropriate signal of our seriousness about dealing with this issue.

I will refer to issues colleagues have raised. Senator Ward talked about the codification of criminal legislation and I absolutely share his view.

It is unfortunate that the Bill, like so many other criminal Bills, cannot be read without reference to primary legislation and to an overarching legislative structure. There is a strong case to be made for the consolidation and codification of criminal legislation in many different areas, not least here in regard to financial crime and money laundering. The law is rendered unnecessarily complex by the way in which this type of legislation is brought in.

I refer also to Senator McDowell's comments the concept of politically exposed persons, PEPs. I entirely agree with him regarding concerns about disproportionality. We are all aware why the PEP rules were introduced and the necessity of rules in this regard, but we have to examine their proportionality. I look forward to seeing Senator McDowell's amendments. Deputy Howlin raised in the Dáil the issue of somebody who had been elected to the national executive of our party who told him that he had been notified by his bank that he was a PEP. The person asked what a PEP was and what it meant for him. This citizen is not elected to any national parliamentary office, as we all are, but to a national executive. I had not been aware that PEP rules extended that far. Nor had I been aware, until Senator McDowell spoke, that they extended to adult children, although I had been aware that they extended to partners and spouses. As a national Legislature, we need to reconsider the proportionality of their application and to ensure we do not unduly deter people who could make a contribution to political life from entering it. I make these observations while recognising the necessity for rules concerning PEPs.

I will conclude with an issue close to my heart that is relevant to this legislation. This legislation deals with money laundering as a worldwide crime and the aftermath of issues in kleptocracies, where regimes have robbed their own people of raw resources. The immediate aftermath of the collapse of the Soviet Union is a case in point. In that context, I urge the Minister of State to support the many calls that have been made for the bringing forward of an Irish Magnitsky Act, that is, an Act to honour the memory of Sergei Magnitsky, the Russian lawyer who died in a Moscow prison after being involved in an investigation into fraud involving Russian tax officials.

Many colleagues will be aware of the case, which has been publicised so remarkably well by Bill Browder, the American-born businessman who has published books on the issue and whom I had the pleasure of meeting when he came to Leinster House in 2019 to make the case for legislation to bring to account the sort of criminal actions that led to the death of Sergei Magnitsky. A number of jurisdictions have passed legislation, as we know, including the US in 2012, Britain, Canada, Lithuania and Latvia. The case for such legislation has been strengthened immeasurably in recent days in light of the protests over the treatment of Alexei Navalny, the Russian opposition politician.

I make those remarks in support of the Bill and restate the support of my party for its passage.