Irish regulator, The Central Bank of Ireland has fined the Bank of Ireland (BOI) €3,150,000 by the Central Bank of Ireland in respect of anti-money laundering (AML) and terrorist financing compliance failures.

The Central Bank of Ireland reprimanded BOI for twelve breaches of the Criminal Justice (Money Laundering & Terrorist Financing) Act, 2010 (the ‘CJA 2010’). The breaches occurred from the enactment of the CJA 2010 in July 2010 and persisted on average for over three years. These breaches have been admitted by BOI. The Central Bank’s enforcement investigation identified significant failures in BOI’s anti-money laundering and counter terrorist financing (‘AML/CFT’) controls, policies and procedures. They included failures by BOI relating to:

  • Risk assessment: assessment of money laundering/terrorist financing (‘ML/TF’) risks specific to its business and the relevant mitigating systems and controls.
  • Suspicious transaction reports: reporting of six suspicious transactions to An Garda Síochána and the Revenue Commissioners without delay.
  • Correspondent banking: conduct of enhanced customer due diligence (‘CDD’) on one correspondent bank situated outside of the EU. The Central Bank also identified areas of non-compliance with the CJA 2010 in relation to BOI’s trade finance business, CDD measures and its reliance on third parties to conduct CDD.

Central Bank of Ireland Director of Enforcement, Derville Rowland, said: “Financial services firms have a duty to protect, not only themselves but also the wider financial system, from money laundering and terrorist financing. The ever-changing nature of the risks presented by money laundering and terrorist financing, require financial services firms to continuously monitor and enhance the systems and controls they use to combat money laundering and terrorist financing.”

“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 counter terrorist financing legislation. Such behaviour is unacceptable and falls far short of the standard expected of one of Ireland’s largest retail banks. Reporting suspect money sanctions to the authorities without delay is a fundamental component of an anti-money laundering and counter terrorist financing framework. It is particularly disappointing that another large retail bank failed to submit six time-critical suspicious transaction reports to An Garda Síochána and the Revenue Commissioners promptly.”

“Furthermore, it is concerning that Bank of Ireland did not identify deficiencies in its processes and procedures relating to enhanced customer due diligence for its non-EU correspondent banking relationships. Correspondent banks are specifically recognised under the anti-money laundering regime as presenting a high money laundering risk. This case marks the Central Bank’s third enforcement action in an extensive and rigorous programme of investigation of anti-money laundering and counter terrorist financing failures within Ireland’s Baking sector.”