Central Bank of Ireland warns certain firms need to register for AML purposes

The Central Bank of Ireland has earlier today posted a guidance for registration of the so-called “Schedule 2 Firms”. This type of registration has to be done for anti-money laundering (AML) purposes.

The regulator explains that, on November 26, 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. The central bank is the competent authority in Ireland for the monitoring and supervision of financial and credit institutions’ compliance with their obligations under the Act. 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 Act.

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’.

Schedule 2 Activities:

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:

• Money market instruments (cheques, bills, certificates of deposit, etc.)
• Foreign exchange
• Financial futures and options
• Exchange and interest-rate instruments
• 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.

There are some exemptions from the Obligation to Register. If a firm is carrying out the Schedule 2 activities, the obligation to register does not occur if the firm falls into any of the following exemptions:

1. If the firm only carries out Schedule 2 Activity 6 above (the “Trading for own account or for account of customers…”), or
2. If the firm’s customers (if any) are members of the same group as the firm, or
3. If cumulatively:

• The firm’s annual turnover is less than €70,000, and
• The total of any single transaction, or serious of linked transactions in relation to the firm’s Schedule 2 activities does not exceed €1,000, and
• The firm’s Schedule 2 activities do not exceed 5% of the firm’s total turnover, and
• The firm’s Schedule 2 activities are directly related to and ancillary to the firm’s main business activities, and
• The firm only provides Schedule 2 activities to customers of the main business activities, rather than the public in general.

Firms that need to register with the Central Bank as a Schedule 2 firm must do so by using the Schedule 2 Registration Form.

Completed registration forms should be e-mailed to the Central Bank at the following address: [email protected]

The Central Bank notes that it will not commence the processing of any registration until all required information in the registration form as been completed. Incomplete registration forms will be returned without review.