Anti-Money Laundering Directive
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) and the Committee on Civil Liberties, Justice and Home Affairs (LIBE) have published a draft report on a proposal for a directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing: mechanisms to be put in place by the member states.
Proposals include a fitness and probity requirement for certain management positions and beneficial owners; verification of date and technology; some public access to the Register of Beneficial Ownership; access to a land/property register; changes to how the Financial Intelligence Unit is operating; more oversight of self-regulating entities such as ACCA; and an increased role for the as yet to be constituted AMLA (EU Anti-Money Laundering Authority).
Owners Management companies will need to be looked at carefully to identify the 'senior managing official'
Beneficial ownership
None of the shareholders or members of an Owners Management Company (OMC) are likely to have over 25% ownership and, therefore, the following guidance from RBO, which is the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies, needs to be followed to identify the beneficial owners:
‘Where all possible means to identify the beneficial owners have been exhausted, and no natural person has been identified as a beneficial owner, the regulations provide that the senior managing officials (eg director(s) and/or CEO) shall be deemed to be the beneficial owners.’
In some OMCs the directors are the senior managing officials and, therefore, they would be the beneficial owner in this case. Each OMC will need to be looked at carefully to identify who really performs the function of ‘senior managing official’ and these people need to be returned as the beneficial owners. In some cases, ‘senior managing official’ will be the property management agent.
For accountants acting for OMCs, there is a requirement to apply customer due diligence
In other cases, it could be the property management agent and subset, or all the directors. In other cases, it may just be the directors and in other cases there may be a full-time employee who manages the complex.
For accountants acting for OMCs, there is a requirement to apply customer due diligence (CDD) for anti-money laundering purposes. This must be done on the beneficial owners and then may also be done on the directors based on a risk assessment to determine who controls the OMC.
It would almost always be inappropriate to apply CDD to a large number of directors as it is unlikely in an OMC that most of those directors are actually active in managing and running the organisation. Based on a risk profiling, it is likely that the property agent and, at most, two directors would need to be assessed.
However, where the managing agent has very little control over the organisation and simply acts on the directors’ instructions, they would not be the beneficial owner and would not need to go through the CDD process.
Consumer Protection
The Competition and Consumer Protection Commission has published its Consumer Protection List 2021 of consumer protection enforcement activities. The report identified 24 compliance notices with the offending businesses – many of them well-known retailers – being named in the report.
Action was taken on complaints, including false/misleading advertising, clocking of cars, distance selling cancellation periods being too short, misleading cancellation rights and cancellation costs and refund rights, and restocking fees.
In addition, 10 fixed payment notices were also served on traders who breached price display legislation.
Central Bank of Ireland
The Central Bank of Ireland has published its 2021 Annual Report and Annual Performance Statement 2021-22. The forward-looking aspect of the report identifies four themes: future-focused, open & engaged, transforming and safeguarding.
Master Pension Trusts
The Pensions Authority has issued an information update for master trusts. Given the introduction of IORP II, many pensions trusts are converting into master trust arrangements.
