Source of Wealth in Construction AML: What Irish Designated Persons Must Document in 2026
Standard Client Due Diligence — a passport, a utility bill, a file note — is the floor, not the ceiling. For construction professionals engaged on high-value or complex developments, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 imposes an additional obligation: enhanced due diligence, including documented verification of both the source of funds and the source of wealth of the client.
Most practices conducting EDD do not know what it requires beyond standard identification. Inspecting bodies are now examining source of wealth documentation in detail. This article sets out exactly what must be in the file.
Triggers
When Source of Wealth Becomes Mandatory
Section 37 of the CJ(MLTF)A 2010 mandates Enhanced Due Diligence in three categories of situation: Politically Exposed Persons, clients from high-risk third countries on the European Commission's list, and any situation assessed by the designated person as presenting a higher risk of money laundering or terrorist financing.
For construction professionals, the third category is where most EDD obligations arise in practice. A contract value above €150,000 does not automatically trigger EDD as a matter of statute — but it is a significant risk indicator that most proportionate risk assessments will treat as requiring enhanced scrutiny. A corporate client with opaque ownership, a client paying cash deposits on account, or a development involving rapid sequential resales each independently warrant a risk assessment that should conclude EDD is required.
The obligation is risk-based, not rule-based. If your written risk assessment says EDD is required, EDD is required — and the file must show you conducted it.
Source of Funds vs Source of Wealth
Two Distinct Obligations That Are Often Conflated
Source of funds and source of wealth are separate and distinct verification requirements under s.37(2)(b) of the 2010 Act. Many practices conflate them. An inspector will not.
Source of funds refers to the specific funds being used in the transaction or engagement — where the money for this particular project is coming from. Evidence typically includes bank statements showing the transfer origin, a facility letter from a lending institution, or a solicitor's undertaking confirming the drawdown of a mortgage facility.
Source of wealth is broader — it refers to how the client accumulated their overall wealth or net worth. For a high-net-worth individual developer, this means understanding and documenting the economic activity that generated the assets they are deploying. A file note recording "Client states funds are from business income" is not source of wealth documentation. What is required is corroboration: audited accounts, a tax clearance certificate, a Companies Registration Office search confirming the business, or a letter from an accountant with professional liability for its contents.
The File Standard
What an Inspecting Body Expects to Find
When an inspecting body — the Law Society, a professional body, or a competent authority under the 2010 Act — reviews an EDD file for a construction designated person, the minimum expected content is:
- —Written risk assessment explaining why EDD was triggered for this client, with the specific factors identified;
- —Evidence of senior management approval to proceed — s.37(1) requires approval before, not after, the business relationship is established;
- —Source of funds documentation: primary document (bank statement, facility letter) plus a file note explaining the chain from origin to the account used for the project;
- —Source of wealth narrative: an explanation of how the client's general wealth was accumulated, supported by at least one independently verifiable document;
- —For corporate clients: CRO search, shareholder register extract, and UBO verification to the level required under s.33(5) — the RBO register alone is insufficient where verification is required;
- —Ongoing monitoring log: date of last review, trigger events since engagement commencement, and the next scheduled review date.
PEP Clients
Politically Exposed Persons: The Six-Monthly Review Requirement
Where a client is identified as a Politically Exposed Person — or a family member or close associate of a PEP — section 37(3) of the 2010 Act requires an ongoing monitoring review at least every six months for the duration of the business relationship. This applies regardless of contract value or transaction type.
The review must be documented. A mental note that nothing has changed is not a review for the purposes of s.37(3). The file must show the date of review, the person who conducted it, the information considered, and the conclusion reached. If a PEP client's role or exposure changes — for instance, a local authority member who is elected to national office — that is a trigger event requiring an immediate out-of-cycle review.
Actions Required
- —Audit your current EDD files against the two-part standard: source of funds (specific transaction funds) and source of wealth (general accumulated assets) are separately documented and evidenced, not described in a single narrative.
- —For any EDD file where senior management approval is not on record prior to the business relationship commencing, document a retrospective ratification with date and approver signature — and note the gap in your risk assessment.
- —For PEP clients: confirm your six-monthly review schedule is in your case management system, not just in a calendar reminder that leaves no audit trail.
- —Review your written AML risk assessment methodology to confirm it addresses when EDD is triggered — the threshold must be documented, not ad hoc.
The EU AML Single Rulebook applying from July 2027 makes source of wealth documentation an explicit requirement in the regulation text for high-risk clients. Practices that build the standard now will not need to rebuild it in fourteen months.
Oibrio monitors AML designation obligations for Irish construction professionals so your practice is inspection-ready.