​Central Bank says firm failed to report suspicious transactions promptly.

Bank of Ireland has been fined €3.15 million by the Central Bank for breaches to laws aimed at countering money laundering and terrorist financing, including the failure to report six suspicious transactions to the Garda and Revenue Commissioners promptly.

According to the Central Bank: "The high volume and range of breaches uncovered as part of the Central Bank's investigation into Bank of Ireland point to significant weaknesses in the strength of Bank of Ireland's implementation of anti-money laundering and counterterrorist financing legislation.

“Such behaviour is unacceptable and falls far short of the standard expected of one of Ireland’s largest retail banks.”
It marks the second-largest penalty issued by the Central Bank in relation to the Criminal Justice (Money Laundering & Terrorist Financing) Act, 2010. Ulster Bank was fined €3.325 million last November and AIB was ordered last month to pay €2.275 million for similar violations.

Bank of Ireland’s admitted to breaches between July 2010 and December 2015.

These include not carrying out adequate assessments of risks of accounts being used for money laundering or terrorist financing and putting in proper mitigating systems and controls, according to the regulator.

Money laundering and terrorist financing have become a key area of focus for regulators globally recently, with authorities from South Africa to Canada levying multimillion euro fines in the past year for weak anti-money laundering and counterterrorism controls.

“The fine . . . in this case relates to control breaches and not actual money laundering or terrorist financing activities,” a spokesman for Bank of Ireland said.

Due diligence
The Central Bank found Bank of Ireland failed to carry out sufficient due diligence on an unnamed bank outside the EU, which used it for financial transactions locally.

This type of activity, known as correspondent banking, carries a high risk as the domestic bank has limited information on the purpose of financial services it has agreed to carry out for an overseas lender.

The regulator’s investigation also uncovered failings in relation to Bank of Ireland’s requirement to know its customers.
Specifically, the bank, which remains 14 per cent State owned after the financial crisis, did not apply sufficient customer checks on an overseas “politically exposed person” to determine their source of funds and wealth.

A politically exposed person can be defined as an individual who is, or has at any time in the preceding year, been entrusted with a prominent public function.

A spokeswoman for the regulator and spokesman for the bank declined to identify the individual in this instance. Bank of Ireland said it takes its regulatory obligations seriously and regrets that these issues arose.
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• https://www.irishtimes.com/business/financial-services/bank-of-ireland-fined-3-15m-for-breaches-of-laundering-law-1.3100696
• https://www.centralbank.ie/docs/default-source/news-and-media/legal-notices/settlement-agreements/public-statement-relating-to-settlement-agreement-between-central-bank-of-ireland-and-bank-of-ireland.pdf

AIB has been fined €2.275 million by the Central Bank for failing to report potentially suspicious monetary transactions promptly to the Garda and Revenue.

The financial regulator found AIB guilty of six breaches of anti-money laundering laws and legislation to ensure funding doesn’t make its way to terrorist organisations.

It said the breaches were the result of “significant failures” in AIB’s controls, policies and procedures.
This is the biggest fine levied against AIB by the Central Bank and follows a €3.325 million fine issued last year to Ulster Bank for similar breaches.
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• https://www.linkedin.com/pulse/aibs-2275-million-fine-raises-questions-irelands-laws-peter-oakes/
• https://www.centralbank.ie/docs/default-source/news-and-media/legal-notices/settlement-agreements/public-statement-relating-to-settlement-agreement-between-central-bank-of-ireland-and-allied-irish-bank.pdf
  

The Central Bank has reprimanded Ulster Bank Ireland and announced fines of more than €3.3m.

​The fines are in respect of anti-money laundering and terrorist financing failures, under the Criminal Justice Act. A Central Bank investigation found the bank had had left itself vulnerable to money-laundering and terrorist financing.

The breaches, which occurred over a six-year period, have been admitted by Ulster Bank Ireland.

The fine is the biggest ever issued by the Central Bank for breaches of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010, and brings the total number of fines it has issued this year to various financial institutions to €7.5m, writes Noel Baker.

Ulster Bank Ireland admitted the breaches and settled for the fine of €3.325m, with the Central Bank stating that all matters were concluded last Thursday.

It has emerged that the breaches at the bank were linked to outsourcing and occurred over a six-year period, beginning in 2010.

The Central Bank launched its probe into the problems last year and the resulting fine is the second time in recent years it has reprimanded Ulster Bank.

In November 2014, Ulster Bank was hit with a record €3.5m fine for a serious IT systems failure in June and July 2012, which left 600,000 customers without essential and basic banking services over a 28-day period.

In explaining the issuing of the latest fine, the Central Bank said its investigation had identified a number of areas of non-compliance with regulations and Central Bank director of enforcement Derville Rowland lambasted Ulster Bank over its failings.

“Ulster Bank Ireland’s breaches are especially concerning as they point to unacceptable weaknesses in key aspects of its anti-money laundering framework, systems and controls over an extended period of time,” she said.

“As one of the largest retail banks in Ireland, Ulster Bank Ireland provides a gateway to the financial system for more than one million customers through its extensive network of branches, online and telephone banking.

“Therefore, it is imperative that it vigorously applies the highest levels of anti-money laundering compliance in order to protect, not only itself, but its customers and the wider financial system.”

Ulster Bank has 1.1m customers, and since July 2010, has been required to comply with the CJA 2010.

However, the Central Bank’s investigation identified eight breaches, including “two significant failings”: that it failed to put an outsourcing policy in place from July 15, 2010, for 11 months, and that it failed to put a service level agreement in place for 19 of the 25 outsourced activities when the outsourcing commenced.

The Central Bank also said Ulster Bank failed to conduct an assessment of the ML/TF risks of its business for a period of over two years and that until April 2014, its risk assessment was inadequate as it failed to provide “any quantitative and/or qualitative evaluation of its exposure to the identified risk factors”.

The probe also found that the bank provided new products to 64,900 customers without completing customer due diligence in circumstances where a relevant section of the CJA applied.

There was also inadequate training for non-executive directors on CJA 2010 until 2013.

This is the Central Bank’s seventh settlement in 2016 and brings the total amount of fines imposed this year to just over €7,45m.

It is the 104th enforcement case concluded by the Central Bank, with the amount of fines imposed to date totalling over €49.72m.

• https://www.irishexaminer.com/news/arid-30761956.html
• https://www.centralbank.ie/news-media/press-releases/central-bank-fines-ulster-bank-3.325m

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​