Bray Credit Union fined €98,000 for breaching money laundering and terrorist finance laws

BRAY CREDIT UNION has been fined €98,000 for failing to comply with Ireland’s laws on money laundering and terrorist financing.

The Central Bank confirmed today that it reprimanded the branch, which has 26,886 members, for breaches of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 which persisted over five years and seven months.

Bray Credit Union has admitted to the breaches, according to the financial watchdog. An investigation found that all but one of the infractions occurred between 15 July 2010 and February 2016.

They “represented significant failings” in how the credit union fought possible money laundering and terrorist financing.

Bray Credit Union is in the top 11% of credit unions by asset size but is not affiliated with the Irish League of Credit Unions. It is a member of the Credit Union Development Association.

The 2010 financial laws require ”all credit and financial institutions to adopt and implement adequate policies and procedures appropriate to their business to prevent and detect the commission of money laundering and terrorist financing”.

The Central Bank said Bray Credit Union failed to do this in a number of areas, particularly in relation to transaction monitoring, suspicious transaction reporting, customer due diligence, scrutinising member transactions and record keeping.

Commenting on the fine, the Central Bank’s director of enforcement, Derville Rowland, said many community-based credit unions know who their members are and how they interact with the credit union.

“However, this does not minimise or reduce the obligations of credit unions pursuant to the CJA 2010,” she said.

“Credit unions must use the knowledge and insight they have of their customer base to comprehensively assess the money laundering and terrorist financing risks in their business and to implement effective and robust frameworks, system and controls to counter those risks.”

She noted that the regulator is concerned that a credit union of Bray’s size and scale was found to have breached key requirements for a long period of time.

“The failure by Bray Credit Union to apply adequate identification and verification measures to members and to scrutinise their transactions meant that it lacked critical information to allow it to properly fulfil its obligations to monitor, identify and report unusual and potentially suspicious activity and created an unacceptable risk of money laundering and terrorist financing,” she concluded.

Bray Credit Union co-operated with the investigation and settled the matter “at an early stage”, the Central Bank noted. It has also taken actions to remediate the breaches.

The probe is now closed.

Written by Sinead O’Carroll and originally posted on TheJournal.ie