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Ireland ordered to pay €2 million over failing to implement EU money-laundering directive in time

The directive was on the prevention of the use of financial systems for the purposes of money laundering or terrorist financing.

A sign in front of the office towers of the European Court of Justice.
A sign in front of the office towers of the European Court of Justice.
Image: DPA/PA Images

IRELAND HAS BEEN ordered to pay a €2 million lump sum for failing to properly implement an EU directive, in time or in full, to combat the use of financial systems for money laundering or terrorist financing.

Romania was also fined €3 million as part of the same ruling, in a case taken by the European Commission against the two countries. 

EU member states had to transpose Directive 2015/849 into their national law by 26 June 2017 and notify the European Commission of the measures adopted in relation to it.

The European Commission took a case against Ireland and Romania on 27 August 2018 for failing to reflect the directive in their national laws in time, and failing to notify the Commission.

The directive – on the prevention of the use of financial systems for the purposes of money laundering or terrorist financing – has since been transposed in full into both Romanian law and Irish law.

In a ruling given this morning by the Court of Justice of the European Union (CJEU) found that Romania and Ireland had “neither adopted the national measures transposing Directive 2015/849 nor notified such measures to the Commission and that, consequently, they failed to fulfill their obligations under that directive”.

Although both countries later implemented these measures, the Court found that “the fact remains that that failure to fulfill obligations existed on the expiry of the period prescribed in the respective reasoned opinions, with the result that the effectiveness of EU law was not ensured at all times”. 

The Commission had initially sought an order that Romania and Ireland should pay “a daily penalty payment” from the date of delivery of the judgment for failure to fulfil the obligation to notify the measures transposing that directive. It had also sought a lump sum.

But the Commission later withdrew the part of its actions seeking that daily payment, since the directive had since been transposed in full into Irish law and Romanian law.

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Concluding, the Court said that the point of giving a deadline by which EU member states were to transpose EU directives into national law was to “to ensure the full effectiveness of EU legislation”.

“Any other approach would indeed be tantamount to calling into question the effectiveness of the provisions of directives setting the date on which the measures transposing those directives must enter into force,” it said.

The Court also noted that the Commission initiated a pre-litigation procedure to deal with the “failure to fulfill the obligations at issue”.

“Consequently, the Court concluded that the failure to fulfill obligations by Romania and Ireland persisted for somewhat more than two years,” it said.

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