Changes to both the Criminal Justice provisions and the framework for tax Qualifying Disclosures have prompted a re-examination of the legal requirement for Chartered Accountants making Anti Money Laundering Suspicious Transaction Reports. A useful exemption continues to apply, but we urge you examine the conditions applying to ensure you are in full compliance with the legislation.

Tax Qualifying Disclosures and your responsibilities under Money Laundering legislation

A. Background

1. This note applies only to tax and legal provisions, practices and arrangements within the Republic of Ireland.
2. Since 2003, Chartered Accountants have been obliged to make suspicious transaction reports (STRs) to both the Gardai and the Office of the Revenue Commissioners. These responsibilities were derived from the Criminal Justice Act 1994 and associated Regulations made in 2003 and 2004, designed to assist the authorities in combating Money Laundering offences.
3. In the course of making Qualifying Disclosures of tax default to Revenue, where the intention is to regularise tax affairs while securing a reduced tax penalty settlement, Chartered Accountants (and especially Chartered Accountants in practice) could come across items which normally would also be the subject of STRs. However the 1994 Act and Regulations had made provision for STRs not to be required in certain circumstances. These included circumstances where the items came to the attention of the Chartered Accountant in the course of preparing a Qualifying Disclosure.
4. There have been two developments which have prompted Chartered Accountants Ireland to re-examine the exclusion from Anti Money Laundering reporting in the context of the Qualifying Disclosures. These are:
   • The codification in law of the Qualifying Disclosure process (Taxes Consolidation Act 1997 ss1077E and following)
   • Directive 2005/60/EC – the so-called Third Money Laundering Directive – implemented in Irish national law as the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010

These provisions amend or create certain definitions, and in particular recast the 1994 Act and Regulations which created the exclusion from reporting. We have taken legal advice on the interaction of these provisions and their effect on the exclusion from reporting.

5. While the Institute is issuing general guidance for its members in regard to obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, we felt it would be helpful to provide a separate summary note on the appropriate approach for Chartered Accountants, acting in good faith, in preparing a Qualifying Disclosure for a client. We are also conscious of the role of the Qualifying Disclosure process in furthering tax compliance, and that it is in the public interest for Chartered Accountants Ireland to support the process.

B. The Exclusion from making a Suspicious Transaction Report

1. Where a suspicious transaction comes to your attention:
   • In relation to your client AND
   • In the course of advising on or preparing a Qualifying Disclosure

Then you will not be required to make an STR under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.

Note that:

• This exclusion from making the STR only applies where a client relationship exists.
• This exclusion will also apply when furnishing any form of disclosure to Revenue, though typically the situation will arise in the context of a Qualifying Disclosure within the meaning of TCA97 s1077E.
• This exclusion does not apply where the suspicious transaction comes to notice in the context of routine tax compliance work and is not acted upon.
• This exclusion does not apply to information received from or obtained in relation to a client with the intention of furthering a criminal purpose.

2. This exclusion is derived from the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 s46, and is without prejudice to any other requirements under that act concerning, for example, client identification, record retention, and “tipping-off”.
3. This exclusion is effective from the entry into force of the relevant provisions of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.