Saturday, October 31, 2020

EU fines Ireland €2 million for partial implementation of anti-money laundering laws

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IRELAND has been fined €2m by the Court of Justice of the European Union (CJEU) for delays and partial application of the EU’s rules against money laundering and terrorist financing.

The fine was issued under EU Directive 2015/849, which aims to prevent the use of the EU’s financial system for the purposes of money laundering and terrorist financing, according to a statement from the CJEU.

Member states had to apply the directive into their national law by the end of June 2017 and notify the European Commission of the procedures adopted in respect of the directive.

In August 2018 the Commission brought actions against Ireland for the country’s failure to fulfil its obligations in full.

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The Commission initially wanted Ireland pay a daily penalty payment and also a lump sum.

It then told the court it no longer sought the imposition of a daily penalty payment once the directive became law here.

Ireland disputed the application of the system of penalties provided for in Article 260(3) TFEU. Ireland maintained the Commission’s application for a lump sum to be imposed on it was “not only unjustified, but also disproportionate” on the grounds of the case facts “and the objective of that type of financial penalty”.

The legal team representing the country also complained that the Commission failed to provide detailed reasons for its decision to request the implementation of such a penalty.

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However, the court found Ireland failed to fulfil its obligations under the directive.

In addition, the CJEU found the requirement to pay a lump sum could not be dismissed as disproportionate because the directive had been implemented here as the court was examining the case. This, the CJEU said, was because the fine “is based on the assessment of the effects on public and private interests of the failure of the member state concerned to comply with its obligations, in particular where the breach has persisted for a long period”.

It also said the Commission is not required to state reasons on a case-by-case basis for its decision to seek the imposition of a financial penalty under Article 260(3) TFEU.

Romania was also fined €3m for the same offence, according to a statement from the CJEU yesterday.

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