Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018

Enhanced customer due diligence - high-risk third countries

18. The Act of 2010 is amended by the insertion of the following section after section 38:

38A. (1) Subject to subsection (2), a designated person shall apply measures, including enhanced monitoring of the business relationship, to manage and mitigate the risk of money laundering and terrorist financing, additional to those specified in this Chapter, when dealing with a customer established or residing in a high-risk third country.

(2) Subsection (1) shall not apply where—

(a) the customer is a branch or majority-owned subsidiary of a designated person and is located in a high-risk third country,

(b) the designated person referred to in paragraph (a) is established in a Member State, and

(c) the branch or majority-owned subsidiary referred to in paragraph (a) is in compliance with the group-wide policies and procedures of the group of which it is a member adopted in accordance with Article 45 of the Fourth Money Laundering Directive.

(3) In the circumstances specified in subsection (2), the designated person shall—

(a) identify and assess the risk of money laundering or terrorist financing in relation to the business relationship or transaction concerned, having regard to section 30B, and

(b) apply customer due diligence measures specified in this Chapter to the extent reasonably warranted by the risk of money laundering or terrorist financing.

(4) A designated person who fails to comply with this section commits an offence and is liable—

(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months (or both), or

(b) on conviction on indictment, to a fine or imprisonment for a term not exceeding 5 years (or both).”.