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Appointing a Money Laundering Reporting Officer (“MLRO”) to an Irish Fund


Requirement to appoint a MLRO and Controlled Function regime


The Central Bank of Ireland requires regulated funds to appoint a MLRO.  The Central Bank has prescribed the role of MLRO as “Controlled Function 2: “Ensuring, controlling or monitoring compliance by a regulated finance service provider with its relevant obligations.”


MLRO Responsibilities


The MLRO’s statutory responsibility set out within the Criminal Justice Act is to consider whether money laundering suspicions need to be reported to the Garda Siochana and Revenue Commissioners and to make any necessary reports. 


However, we recommend that the MLRO should also be contractually made responsible for:

  • reviewing the fund’s or management company’s AML policy for compliance with relevant statutory requirements;
  • reviewing the AML processes that implement that AML policy (usually carried out by the Administrator);
  • undertaking a Business Risk Assessment at least annually; and
  • reporting regularly to the Board so they can satisfy themselves that the policy is being implemented, that the Fund’s Anti-Money Laundering /Counter Terrorist Financing risk profile remains within their risk appetite and that any issues are being resolved.


Individual Accountability Framework (“IAF”)


The Central Bank’s IAF comprises a number of strands:


The Board should certify that the MLRO meets the Central Bank’s Fitness and Probity Standards and that the individual has agreed to abide by those Standards.  


Additionally, the MLRO should be notified that they must comply with the Conduct Standards.


Residence


There is no requirement for the MLRO to be physically based in Ireland although we would recommend that there is at least a periodic physical attendance at board meetings held in Ireland.


Central Bank notification


While there is no specific requirement to notify the Central Bank of the appointment of the MLRO, it is usual practice for the Company Secretary to notify the Central Bank of such an appointment.


Contractual Terms


When the services of a MLRO are supplied by a third party, the Central Bank expects that there should be a written agreement in place between the fund/management company and the provider.  As well as setting out the duties of the MLRO described above and standard contractual terms, the agreement should also cover:

  • compliance with the IAF regime;
  • fee arrangements;
  • indemnity arrangements; and
  • data and information security arrangements.

 

About AML Solutions


AML Solutions Group offers a range of services to assist the boards of funds and firms in Ireland, the Cayman Islands, the British Virgin Islands and the UK to meet their anti-money laundering obligations.  We provide independent and practical expert advice.

 sam.stewart@amlsolutionsgroup.com


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