Report on Politically Exposed Persons: Motion
Dail Éireann — 2024-04-25
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Neale Richmond (FG), Dublin Rathdown

I sincerely thank Deputy McGuinness for his contribution and the entire committee for sponsoring this motion. I also thank everyone who contributes to the work of this committee both in terms of the secretariat and within Deputy McGuinness's office. I was still a member of this committee when we began the discussion on this report, as the Deputy will recall, but in the context of this afternoon I have noted the final report of the joint committee entitled Report on Politically Exposed Persons. It is evident it was the result of a significant amount of work and I acknowledge the cross-party work of the committee in its efforts to identify and present recommendations in such a comprehensive but, crucially, accessible format. The approach has been valuable given the importance of the matters covered by the report. I assure the Deputy it deserves and will receive the response he requested so far in this debate. I also thank the joint committee for acknowledging in this report the importance of anti-money laundering and combating the financing of terrorism, AML-CFT, measures. The effective implementation of these measures is vital for ensuring Ireland has a robust domestic framework for combating money laundering and terrorist financing. These measures ensure we are compliant with not only our EU obligations but also international standards. We enter into these obligations voluntarily and by choice. They are not sent down to us by some foreign entity. Compliance with such standards is also important for the robustness of our financial sector and businesses in the country. It is critical that persons dealing with Irish companies and State agencies have the utmost confidence in our AML-CFT regime. This reporting knowledge is the obligation to apply enhanced customer due diligence measures as an important aspect of Ireland's framework for combating money laundering and terrorist financing.
The assessment of the joint committee is that in the coming years these measures are likely to impact an ever-increasing number of citizens. As such, it indicates these measures must be consistent and fair in their application, including when applied to politically exposed persons. I am aware of the effect the obligations relating to politically exposed persons have on those holding prominent public functions, and their family members and close associates. I am not just aware of it; I live it, just like Deputy McGuinness. I can empathise with him and have been through the experiences he and his son have gone through.
I fully appreciate there is a level of frustration with this impact. However, I also note and appreciate the joint committee's acknowledgement of the risks attached to politically exposed persons and the constant need for enhanced due diligence when undertaking financial transactions. In fact, there is a balance to be struck to ensure confidence and trust in people designated as politically exposed persons and the need to demonstrate to the public there are measures in place to do this. It is important to note that classification as a politically exposed person is a preventative measure in line with the international best practice risk-based approach to anti-money laundering used on a worldwide basis. Such a classification in no way implies involvement in suspicious activity on the part of any individual, but it is intended to apply greater vigilance where greater risks lie.
As mentioned in the report, there are five recommendations that are variously for the Minister for Finance and the Departments of Finance and Justice to address. Recommendation 1 is that a review should be undertaken to examine anti-money laundering measures covering the impact of enhanced due diligence measures on politically exposed persons, including family members and close associates. The Minister, Deputy McGrath, has asked officials in the Department of Finance to commence the necessary preparatory work to address this recommendation immediately. This work will be undertaken in consultation with the Department of Justice and must seek information from relevant stakeholders, including Members of the Oireachtas. We invite them to make submissions in advance, if they would like to do so. The completion of this review will assist in understanding how the measures required regarding politically exposed persons, laid out in section 37 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, are being applied in practice.
Regarding the report's other recommendations, officials will engage with the joint committee to determine the best approach to addressing each of these. However, giving effect to recommendation 3, which seeks to ensure all significant directives emanating from the EU are discussed by a Dáil committee prior to agreement may, realistically, prove challenging. This is because the process of negotiating directives can be lengthy and complicated. It is also unclear at what earlier stage in that process the committee considers it appropriate the draft directives should be discussed. This is a personal opinion. My experience as a member of the Employment, Social Policy, Health and Consumer Affairs Council, EPSCO, was that a directive that was finally voted on was grossly different from the draft version we discussed only two weeks earlier. A common-sense approach needs to be taken, but I know the committee will support that. Regardless, officials will engage with the committee to identify what procedures should be appropriate in this regard, noting the new role of the Seanad EU supervision committee that is in place.
Regarding recommendation 4, I note it is the Minister for Justice who issues guidelines to competent authorities regarding functions in the State that may be considered prominent public functions. The current guidelines were issued on 20 January 2023 and provided to competent authorities. While the policy and legislation on politically exposed persons is kept under continuous review, the guidelines have only been issued very recently by the Department of Justice. The new EU anti-money-laundering package will need to be analysed carefully to determine whether any amendments to the guidelines are warranted. A review to be carried out regarding recommendation 1 of the report may also have a bearing on this analysis.
I would like to briefly return to a point I made earlier, namely, that the report acknowledges the importance of anti-money laundering measures. As I said, such measures are not only a matter of EU law but are also reflective of international standards. International standards in the area of anti-money laundering and combating the financing of terrorism are set by the Financial Action Task Force, FATF. Ireland is a long-standing member of this intergovernmental organisation based at the OECD in Paris, having been a member since 1991. Thirteen of the other EU member states are also members. In overall terms, the 38 most advanced global economies are members, as are the European Commission and the Gulf Cooperation Council, along with observers such as the IMF, the World Bank and others.
As a member of the FATF, Ireland has committed to upholding these international anti-money laundering and combating the financing of terrorism standards. Indeed, Ireland's anti-money laundering framework will be assessed as part of the FATF's in-depth peer review process in the 2027 to 2028 period. We are currently rated by the FATF as compliant with its recommendations regarding politically exposed persons and it is important we continue to maintain an anti-money laundering framework which is aligned with these standards. EU anti-money laundering legislation largely reflects FATF standards and this is desirable so that obligations in this regard are not required to adhere to two different sets of rules.
Regarding politically exposed persons, the current applicable provisions are included in the fourth anti-money laundering directive. As members of the joint committee will be aware, the elements of the fourth anti-money laundering directive relating to politically exposed persons will soon move into a new directly applicable anti-money-laundering regulation. This regulation is nearing finalisation. It is currently subject to votes in the European Parliament, which concluded in the past hour or so. It is expected it will apply from mid-2027.
It should be noted that this new legislation includes some additions to the current definition of a politically exposed person. These additions to the definitions were not advocated for by Ireland. However, it is relevant that many other member states had already included these categories of persons in their domestic definition of politically exposed persons and, as such, these additions were ultimately incorporated into the final text of the regulation.
As I stated previously, I am aware of the effect the obligations relating to politically exposed persons have had on those holding prominent public functions, as well as their family members and close associates. To reiterate, I appreciate there is a level of frustration with this. However, I also appreciate the joint committee's acknowledgement of the risk attached to politically exposed persons and the need for enhanced due diligence when undertaking financial transactions. Therefore, as I have said, these are not only obligations stemming from our membership of the EU; they are also in accordance with best practice and international standards.
If we wish to maintain a well-regulated financial sector and a robust framework for combating anti-money laundering and terrorist financing that encourages other countries to do business with us, we must ensure we continue to enforce the highest international standards. However, I clearly agree it is also important these obligations do not prevent people from unfairly accessing routine banking activities and financial services or deter people from becoming involved in public life.
I underline and wholeheartedly state that I encourage everyone to get involved in the political process. I do not care if someone wants to get involved as a member of a political party, be it my own or any political party represented here or otherwise, or as an Independent, with Independent movements or campaigning organisations. It is a civic obligation as well as a great opportunity for many different people.
I welcome the joint committee's call for a review. I hope we can ensure these obligations are implemented in an appropriate and risk-based manner. In this regard, I thank the Deputy and committee for their work.

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Retrieved: 2026-08-14T04:52:52+00:00
Sitting date: 2024-04-25