Central Bank warns over laundering compliance

THE CENTRAL Bank has warned that the country’s banks and financial institutions are failing to fully comply with the law on money-laundering.

In a letter to the chief executives of all Irish-regulated banks and financial institutions in the country, the Central Bank’s anti-money-laundering supervisory team has warned that the regulator may take enforcement action against institutions that are found to be in breach of the law.

The warning comes on foot of an 18-month inspection process that audited 60 financial institutions across the country. These included banks, credit unions and insurance companies.

The inspections revealed a “significantly lower level of compliance” with the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 than had been expected, the letter states.

Among the specific failures identified by the 18-month inspection were:

• a failure to file reports on suspicious transactions in a timely manner
• failure by firms to establish the identity of customers prior to the establishment of a business relationship or provision of a service
• a general lack of customer due diligence remediation work on existing customers
• a failure to provide training to staff in relation to anti-money-laundering and terrorist financing activity
• a failure by the board and senior management to consider the implications of the 2010 law on their business and a failure to allocate the necessary level of resources to implement the changes to business practices, policies and procedures required.

Any breach of the Criminal Justice Act 2010 can result in civil or criminal penalties, the letter states. It adds that firms should bear in mind “the reputational considerations both for the financial services industry and Ireland as an international financial services centre”.

Ireland is a member of the Financial Action Task Force, an international body that monitors money-laundering and ensures a robust framework is in place in each country to combat such laundering.