Bank of Ireland is the latest to fall foul of anti-money laundering rules

It was handed a hefty €3.1m fine by the financial regulator.

By Conor McMahon Deputy editor, Fora

BANK OF IRELAND is the latest firm to be slapped with a fine by the Central Bank for failing to follow anti-money laundering and terrorist financing procedures.

The financial regulator said today that Bank of Ireland has been fined €3.1 million for several breaches of the rules over a five-year time period.

This is the third such enforcement action that the regulator has announced recently as part of an investigation into anti-money laundering and counter terrorist financing failures in the Irish banking system.

AIB and Ulster Bank have already been fined for breaking the rules.

The Central Bank’s review of Bank of Ireland’s practices identified 12 breaches of the 2010 Criminal Justice (Money Laundering & Terrorist Financing) Act in the years after that law came into effect.

These “significant failures” fell under a number of categories including: a failure to carry out correct risk assessments; taking too long to report suspicious transactions and unsatisfactory due diligence processes.

Bank of Ireland's new Dublin headquarters Central Bank of Ireland governor Philip Lane
Source: Niall Carson/PA Wire/PA Images

Under the Criminal Justice Act, banks are required to have procedures in place to help identify dubious transactions and report them to An Garda Siochána or the Revenue Commissioners when necessary.

The Central Bank identified six suspicious transactions that the company failed to report within a reasonable time frame.

Derville Rowland, director of enforcement at the financial watchdog, said this breach was “particularly disappointing”.

“Reporting suspicious transactions to the authorities without delay is a fundamental component of an anti-money laundering and counter terrorist financing framework,” she said.

Bank of Ireland also provided services to a non-resident ‘politically exposed person’, or PEP – a term used in financial regulation for senior political figures – without determining the customer’s source of funds and source of wealth.

PEPs are at higher risk of bribery and corruption, so extra checks have to be carried out when dealing with those customers.

‘Unacceptable’

Of the three major banks that have fallen foul of the financial watchdog, Bank of Ireland had the highest number of breaches.

A crackdown into AIB’s handling of suspect transactions identified six breaches of the Criminal Justice act and resulted in a €2.2 million fine.

Ulster Bank was served a €3.3 million fine after it admitted to eight breaches of the law.

Derville Rowland said the high volume of breaches at Bank of Ireland “point to significant weaknesses” in the company.

“Such behaviour is unacceptable and falls far short of the standard expected of one of Ireland’s largest retail banks,” she said.

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