Ireland receives final warning over EU finance laws

The EU has issued a final warning to the government to introduce a new financial transparency law or face a day in court.

The 2019 law would give the Garda Financial Intelligence Unit direct access to a central bank database of Irish bank accounts, which should go live later this year.

Ireland agreed to the law – although it was not required to do so – but did not complete it.

Croatia and Finland were also warned by the European Commission on Thursday for inaction.

It was the second formal warning for the three countries after the deadline to implement the law in August 2021.

The government has two months to respond before facing a possible court date.

The Justice Department said it was preparing a legislative instrument with the Treasury Department that “is expected to be finalized in the coming months.”

Full implementation of the directive requires the establishment of the central bank’s database, the Justice Department said.

Two years ago, the EU took Ireland to court and fined the government €2 million for delays in tabling related legislation from 2015.

The 2019 law aims to root out money laundering, terrorist financing and “tax crime” by shedding more light on suspicious transactions.

It falls under the area of ​​safety and justice, to which Ireland has an opt-out under the EU Treaties. However, Ireland chose to participate.

Last July – a month before the deadline for the 2019 directive to come into force – the EU amended it to extend direct access to the central bank’s database to senior gardaí, the Criminal Assets Bureau and other EU agencies, including Europol .

Police and other authorities across the EU can already share financial information with each other upon request, but the rule change would allow them to do so immediately.

Deputy Justice Secretary James Browne told the Dáil last October that failure to comply with the updated law “would pose risks to Ireland’s reputation and the perception of Ireland’s commitment to the anti-money laundering framework at EU level”.

Separately, the EU is undertaking a major reform of its anti-money laundering rules, to which Ireland has no opt-out.

The reforms are a condition for Ireland receiving in full the promised €1 billion in pandemic aid from the EU’s Recovery and Resilience Fund.

A European Commission report said earlier this year that Ireland faced “deep-rooted challenges” related to fighting money laundering and aggressive tax planning due to “significant inflows of foreign direct investment and the existence of complex foreign-owned legal structures”.

The report said that “further efforts” were needed to ensure independent oversight of “trust or business service providers” – code for lawyers, accountants or other professionals setting up businesses or other structures on behalf of clients.

Dutch MEP Paul Tang, who chairs the European Parliament’s tax subcommittee, last week called on Ireland to “be a good European partner” by tackling “bogus investments” by companies using special tax avoidance structures.

The government had previously harbored hopes of hosting a new EU anti-money laundering agency that would directly regulate risky companies. EU governments approved the establishment of the agency but have yet to decide where to locate it. Ireland receives final warning over EU finance laws

Fry Electronics Team

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