Name
Global FinTech Guide
Country _ Name
Ireland
SectionTitle
KYC requirements
Body
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

The primary piece of legislation in Ireland on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) is The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended by Part 2 of the Criminal Justice Act 2013 and by the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 ("the CJA 2010").

The CJA 2010 transposed the European Union's Third Anti-Money Laundering Directive (2005/60/EC), its Implementing Directive (2006/70/EC) and the Fourth Anti-Money Laundering Directive ((EU) 2015/840) into domestic Irish Law.

National regulator or relevant authority for AML controls

Under the CJA 2010, the Central Bank of Ireland is the competent authority in Ireland for the monitoring and supervision of financial and credit institutions' compliance with their AML/CFT obligations. The Central Bank is empowered to take measures that are reasonably necessary to ensure that credit and financial institutions comply with the provisions of the CJA 2010.

Customer Due Diligence

Conduct of a typical KYC identification process

Typical KYC information required by banks and professional services firms are as follows:

  • Proof of incorporation/registration;
  • Up-to-date list of directors;
  • Identification of the ultimate beneficial owners;
  • Personal identification of at least 1 director (i.e. copies of a recent utility bill and passport or driver's license) and
  • Disclosure of any politically exposed persons.

KYC information does not need to be submitted for the incorporation of the company itself.

KYC information does not need to be submitted for registration of the branch.

Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

It is important to note that the fact that a designated person, or third party, is carrying out its own consumer due diligence (“CDD”) to meet its AML obligations, does not negate the need for any other designated person to carry out CDD to satisfy their own AML obligations. Each designated person (whether a solicitor, or a financial or credit institution, etc.) involved in a transaction must, however, carry out their own individual CDD to satisfy their AML obligations. 

The statutory AML obligations of a designated entity will not be satisfied by simply seeking and/or receiving “confirmation” from another designated entity involved in a transaction. 

As per the AML legislation, each designated entity is required to fulfil their own statutory AML obligations, and it remains their responsibility and statutory obligation to do so, regardless of what other designated entities in a transaction may or may not be doing to meet their AML obligations.

Possibility to outsource customer due diligence by contract to other third parties who are not obliged by law to meet AML regulations and rely on these (e.g., WebID, IDnow, PostIdent)

There is no specific legislation in Ireland regulating outsourcing transactions other than regulations affecting specific industries such as the financial services sector.

Outsourcing by regulated financial services providers can be subject to specific rules and is an area of ever-increasing scrutiny by the CBI and European regulators. The
specific rules will depend on the type of licence held by the relevant regulated financial services provider and below are some examples of the requirements that apply to some areas of regulation.

The European Banking Authority (“EBA”) has published regulatory requirements for outsourcing by:

  • Credit institutions.
  • Investment firms authorised under Directive 2014/65/EU on markets in financial instruments (MiFID II) that are subject to Directive 2013/36/EU on capital requirements (Capital Requirements Directive IV).
  • Payment institutions.
  • Electronic money institutions.

The EBA Guidelines set out the:

  • Specific steps that an institution must take when outsourcing.
  • Specific provisions that must be built into the relevant contractual arrangements.
  • The EBA Guidelines provide criteria to aid the identification of which arrangements with third parties are deemed outsourcing and, more particularly, what is meant by "critical or important" functions. If "critical or important" functions are outsourced, stricter requirements will apply to these outsourcing arrangements than to other outsourcing arrangements.

The management body of every institution subject to the EBA Guidelines remains responsible for all the activities of that institution and must ensure that sufficient resources are available to appropriately support and ensure the performance of those responsibilities, including overseeing all risks and managing the outsourcing arrangements.

Presence of a license or registration requirement for the third party in case of outsourcing customer due diligence

On 26 November 2018, Section 108A of the Criminal Justice (Money Laundering and Terrorist Financing), (Amendment) Act 2010 introduced for the first time a statutory requirement for certain firms to register for anti-money laundering purposes with the Central Bank of Ireland (“Central Bank”). If a firm offers any of the following services and it is not otherwise authorised or licenced to carry on business by the Central Bank, then it will need to register with the Central Bank as a 'Schedule 2 firm':

  1. Lending including inter alia: consumer credit, credit agreements relating to immovable property, factoring, with or without recourse, financing of commercial transactions (including forfeiting).
  2. Financial leasing.
  3. Payment services as defined in Article 4(3) of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 200714 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC.
  4. Issuing and administering other means of payment (e.g. travellers' cheques and bankers' drafts) insofar as such activity is not covered by point 3.
  5. Guarantees and commitments.
  6. Trading for own account or for account of customers in any of the following:

      7. a) Money market instruments (cheques, bills, certificates of deposit etc.)
      b) Foreign exchange
      c) Financial futures and options
      d) Exchange and interest-rate instruments
      e) Transferable securities.

  7. Participation in securities issues and the provision of services relating to such issues.
  8. Advice to undertakings on capital structure, industrial strategy and related questions and advice as well as services relating to mergers and the purchase of undertakings.
  9. Money broking.
  10. Portfolio management and advice.
  11. Safekeeping and administration of securities.
  12. Safe custody services.
  13. Issuing electronic money.

Further qu

estions

Entities that could be relied on specifically by law as a third party to comply with AML regulations (regardless of outsourcing)


Yes credit institutions
Yes financial institutions
Yes auditors, external accountants, and tax advisors
Yes notaries and other independent legal professionals
Yes other trust or company service providers
No estate agents
No other persons trading high-value goods
No providers of gambling services


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