Tipping Off in Ireland: Sections 49 and 50 Explained

Telling a client that you have reported them, or that the Gardaí are looking into them, can destroy an investigation. For that reason the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 makes "tipping off" a criminal offence, in section 49, and gives a narrow defence in section 50. This guide summarises both from the Law Reform Commission's revised Act. It is written for Irish accountants and other designated persons, and it sits alongside our guide to suspicious transaction reports in Ireland.

What section 49 prohibits

Section 49 has two limbs, according to the revised Act. The first bars a designated person from making a disclosure that is likely to prejudice an investigation that may follow a suspicious transaction report under Chapter 4 of the Act. The second bars a disclosure likely to prejudice a contemplated or ongoing investigation into money laundering or terrorist financing. In both cases the person must know or suspect that such an investigation may follow or is under way, and must have gained that information through their business as a designated person.

Who is covered

The offence is aimed at designated persons. Subsection (4) extends it to anyone acting, or purporting to act, for a designated person, including agents, employees, partners, directors, other officers and contractors engaged under a services contract. In practice that means every member of an accountancy practice, including junior staff and subcontracted reviewers, should understand the rule, not just the money laundering reporting officer.

Penalties

On summary conviction, the penalty is a fine of up to 5,000 euro, imprisonment for up to 12 months, or both. On conviction on indictment, it is a fine, imprisonment for up to 5 years, or both. The section as we read it does not state a cap on the fine on indictment.

What the section does not spell out

The text of section 49 does not itself set out specific defences such as exemptions for lawyers or intra-group disclosures, and it does not include a defence based on lack of knowledge. The limits are built into the offence: the person must know or suspect, and the disclosure must be likely to prejudice an investigation. The summary we read noted that other provisions of the Act may contain exemptions, so the whole Act needs to be checked.

The section 50 defence

Section 50 gives a defendant charged under section 49 a defence in one narrow situation. The defendant must prove three things: that the disclosure was made to a person who was a customer of the defendant, or of the designated person on whose behalf the defendant acted, at the time; that the defendant, or that designated person, had been directed or ordered under section 17 not to carry out a specified service or transaction for that customer; and that the disclosure stated only that a member of the Garda Síochána had issued such a direction, or that a judge of the District Court had made such an order, and gave the period it covered.

In short, a person may tell a customer about a suspended transaction without committing an offence, provided the disclosure is limited to the fact and duration of the official suspension.

An illustration of the line

The following is our own illustration, not an example from the Act. Suppose a client asks why a payment has not gone through, and the firm has filed a report that it expects to be followed up. Telling the client "we have reported you" is the type of statement section 49 is aimed at. Saying that the transaction cannot proceed yet and that the client should contact the person named by the firm is a different thing, although even that wording should be agreed in advance. If a Garda direction under section 17 is in place, section 50 gives a limited route to say only that a direction or order exists and for how long.

Practical points: our suggestions

These points are our suggestions, not statements in sections 49 or 50. Limit who in the firm knows that a report has been made, and keep the report and related notes separate from the ordinary client file. Prepare a short, neutral script for staff to use if a client asks why a transaction is delayed, and agree it in advance with the reporting officer. Do not explain a delay by referring to a report, an investigation or the Gardaí unless advice has been taken on the section 50 defence. Remember that general discussion of your firm's anti-money laundering procedures is different from telling a particular client about a particular report. For a broader treatment of the same idea, see our guide to SARs and tipping off, which is not specific to Ireland, and our overview of the Criminal Justice Act 2010 for accountants.

What we could not confirm

The revised Act pages we read showed no amendment notes for sections 49 and 50, and we did not check the Irish Statute Book list of amendments, so later changes may exist. We did not read section 17, the Chapter 4 reporting provisions or section 42, so the post describes them only from the cross-references. We did not look at case law, Central Bank or accountancy body guidance, or Garda practice. The Law Reform Commission's revised Acts are an unofficial consolidation. This post is general information, not legal advice.