Every practice has the file that will not close. Two of the four documents arrive, then the client goes quiet. ICPAC's AML Directive is direct about how that ends, and careful about what it does not require.
ICPAC's Council issues the Directive pursuant to section 59(4) of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 (L. 188(I)/2007). It is binding and obligatory as to its adoption by the persons it addresses, and "firm" covers sole practitioners, partnerships and limited companies providing audit, external accounting, tax advisory, insolvency and trust and company administration services. Issued 24 May 2019, it has been amended ten times, most recently 30 June 2026.
By law firms must apply CDD measures before entering into a business relationship or carrying out an occasional transaction, including one equal to or higher than €15,000, whether carried out in one operation or in several that appear to be linked.
Then the part firms get wrong. Where the documentation obtained is not of sufficient quality to satisfy the firm on identity and beneficial ownership, on the ownership and control structure, or on the purpose and intended nature of the relationship, further enquiries may be appropriate. If after those enquiries the firm still has doubts, or the client did not provide the information requested within a reasonable time, the relationship must be declined or terminated. The Directive says it twice: terminate or refuse to enter, depending on the case, where the firm cannot comply with the identification, verification and evaluation of the nature of the business relationship requirements.
The report is drafted differently. On exit the firm should also examine the possibility of submitting a suspicious activity report to MOKAS, which the Directive elsewhere calls a legal obligation to examine the possibility of filing. What makes a report mandatory sits elsewhere: where a person knows or suspects that another person is engaged in money laundering or terrorist financing, and the knowledge or suspicion came to them in the course of their trade, profession, business or employment, they must disclose to MOKAS as soon as is reasonably practicable. Failure is punishable with up to 2 years imprisonment and/or a fine not exceeding €5,000, and it is never appropriate to delay that disclosure pending an application to court for directions.
Two protections and one trap sit around the exit. Non-execution or delay of a transaction is not a violation of any contractual or other obligation to the client where it is due to inadequate data or information about the nature and the economic or commercial rationale of the transaction or the persons involved, or based on knowledge that the transaction, or the funds held in credit of the account, are probably connected to money laundering or terrorist financing offences or any other criminal offences. A disclosure made in good faith breaches no contractual obligation or confidentiality agreement. The trap: where completing client due diligence could itself commit the tipping-off offence, the firm may not conclude it, and immediately notifies MOKAS through a suspicious activity report.
One narrow derogation survives: verification of the client and the beneficial owner may be completed during the establishment of the relationship, but only where that is necessary for not interrupting the normal conduct of business and the risk of money laundering or terrorist financing occurring is low, and completed as soon as practicable after initial contact.
Walking away is the half in the mandatory voice. The penalty attaches to the other half: what you do about the suspicion you formed on the way out.
Not legal advice. Verify against the primary source before acting.
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