20210622 - Ireland fines UBS arm over money laundering rules

The Central Bank of Ireland has reprimanded and fined the Dublin-based life assurance arm of Swiss bank UBS after it failed to comply in a timely manner with anti money-laundering legislation introduced in 2010.

The CBI said it had fined UBS International Life Limited (UBSIL) 65,000 euros ($81,900) for failing to instruct its staff on changes to the law embodied in the Criminal Justice Act 2010.

This is the Central Bank’s first administrative sanction for non-compliance by a regulated firm with anti-money laundering and counter terrorist financing laws which came into force in July 2010 said Peter Oakes, the Central Bank of Ireland's top investigator and enforcer.

The law, which came into force in July 2010, is designed to protect Ireland's financial system from exposure to money laundering and terrorist financing, the CBI said.

The CBI also said UBSIL had failed to show it was adequately checking information on policy holders provided by third parties, thus failing to comply fully with "know your customer" requirements.

UBSIL had also failed to adopt adequate written policies and procedures for identifying and reporting suspicious transactions, the CBI said.

"The breaches identified related to delays by UBSIL in implementing certain requirements of the act after it was implemented on 15 July, 2010," said UBS in a statement, adding that it had dealt with all the control weaknesses identified.

A spokesman for UBS said UBSIL had worked closely with the CBI to redress the control weaknesses, and had received a near 30 percent discount on the fine originally proposed as a result, adding that UBSIL had not committed any contraventions in doing business.

The Central Bank of Ireland also issued a general comment from Director of Enforcement, Peter Oakes:

“This is the Central Bank’s first administrative sanction for non-compliance by a regulated firm with anti-money laundering and counter terrorist financing laws which came into force in July 2010. Firms must adopt robust and effective policies and procedures to prevent and detect money laundering and terrorist financing including ensuring that policies, procedures and business practices are updated in timely manner on foot of changes to regulatory requirements. Furthermore, such policies and procedures must be appropriate to the nature of, and risks associated with, a firm’s operations, including its local and international distribution models as well as the types of financial services and products sold or distributed.

Firms are reminded that AML/CTF requirements must have, like other important governance issues, a home on the boardroom agenda. We have said previously that we have identified many instances where firms do not appear to have comprehensively reviewed their business models to assess the impact of the CJA 2010 on their businesses nor devised or deployed effective implementation plans.

It is important for the integrity of the Irish regulated market and the international fight against financial crime that both European and global money laundering and terrorist financing obligations are complied with. Where the actions of a firm undermine the Central Bank’s achievement of local statutory and international obligations the firm should expect that enforcement action will follow, especially where the breach falls within our stated Enforcement Priorities and Enforcement Strategy, to which we attach high priority”.

https://www.centralbank.ie/docs/default-source/news-and-media/legal-notices/settlement-agreements/public-statement-relating-to-settlement-agreement-between-the-central-bank-of-ireland-and-ubs-international-life-limited.pdf?sfvrsn=6​