AML Update: Central Database of Bank Accounts, Payment Accounts and Safe-Deposit Boxes: Ireland publishes initial Regulations
The Minster for Finance has signed the European Union (Anti-Money Laundering: Central Mechanism for Information on Safe-Deposit Boxes and Bank and Payment Accounts) Regulations 2022 into law.
This paves the way for the establishment of a central database of payment accounts, bank accounts and safe-deposit boxes held with credit institutions (banks, and Class 1 investment firms) in Ireland.
As mentioned in our Arthur Cox Q&A: MLD5 Transposition and AML Horizon-Scanning last year, the requirement (under the Fourth Money Laundering Directive (MLD4)) to establish a central database by 10 September 2020 was one of the outstanding deliverables when Ireland transposed MLD4 and the Fifth Money Laundering Directive (MLD5).
KEY POINTS TO NOTE
Under the new Regulations, the Central Bank has been tasked with setting up a Central Database on which information in relation to those bank accounts, payment accounts and safe-deposit boxes will be entered, together with a Central Mechanism of Ownership of Bank and Payment Accounts and Safe-Deposit Boxes which will enable FIU Ireland (Ireland’s financial intelligence unit) to search across that information. The Central Bank has not yet confirmed the likely timing for the establishment of the Central Database or the Central Mechanism.
Once the Central Database and the Central Mechanism have been set-up, the Central Bank may ask credit institutions to provide it with the following information:
- for bank and payment accounts: the name and address (and, in the case of individuals, date of birth) of the customer-account holder and of its beneficial owners, together with the IBAN, account name, account-opening date and (if applicable) account-closing date; and
- for safe-deposit boxes: the name and address (and, in the case of an individual, date of birth) of the lessee. By way of reminder, banks and financial institutions can no longer establish or maintain anonymous safe-deposit boxes since MLD5 was transposed in 2021.
That information will be retained for at least 5 years after the account is closed, or at least 5 years after the lease on the safe-deposit box expires.
FIU Ireland will be able to access the above information. It will also be allowed to share it with other financial intelligence units across the EU. Irish AML legislation (the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010) has been amended to provided for those sharing arrangements.
The information on the Central Database and the Central Mechanism will not be available to the wider public.
MLD4 also required the European Commission to prepare a report on how these centralised automated mechanisms could be interconnected across EU Member States. It published its report in 2019 (here) noting that further consultation with financial intelligence units and other stakeholders (as end-users) would be needed. Since then, the Commission launched a new AML Action Plan, which includes a proposed directive on cross-border interconnection and contemplates additional Level 2 measures with technical specifications and procedures for interconnection to a single access point. As the new AML Action Plan is in the initial stages of its progress through the EU legislative process, interconnection of these types of registers may not happen for some time.
We will publish further updates once the Central Bank’s plans for the Central Database and Central Register are confirmed.