Ireland’s Central Bank has slapped Allied Irish Banks (AIB) with a €2.275 million fine for “significant failures” in money laundering and terrorist financing controls.
Levying the financial penalty, the central bank reprimanded state-owned AIB for six breaches of the law, including failing to report suspicious transactions without delay and neglecting to carry due diligence checks on existing customers.
The central bank said the breaches persisted for an average of more than three years after Ireland introduced anti-money laundering and terrorist financing legislation back in July 2010.
AIB admitted the breaches, and released a statement saying it had “fully co-operated with the central bank at all stages of this investigation, which has now concluded”.
Director of Enforcement at the central bank Derville Rowland commented: “Firms must have rigorous and robust processes for identification, assessment and reporting of suspicious customer activity.”
“Crucially, those processes must ensure that information on suspicious activity is provided to An Garda Síochána and the Revenue commissioners without delay to assist with the investigation of money laundering and terrorist financing.
“This case emphasises the fundamental information sharing role of the financial services industry in the fight against money laundering.”
The fine comes at a time when the Irish government is preparing to sell up to 25% of AIB, which the state was forced to bailout at the height of the financial crisis in 2008. The Irish government currently owns 99.9% of AIB as a result of the rescue package.
Reacting to news of the fine, Michael McGrath, finance spokesman for Ireland’s largest opposition party Fianna Fail, said: “Coming just weeks before the planned IPO of the bank, this is an embarrassing development for the bank and indeed the government.
“The identification of serious breaches by the regulator of vital central bank regulations sends the wrong message to potential investors in the bank at this crucial time.”
This was the second time Ireland’s central bank has fined a financial institution for breaching anti-money laundering and terrorist financing regulations in the last six months.
In November 2016, the central bank fined Ulster Bank more than €3 million for similar failures.
Earlier this week, Transparency International released a new report that said current EU anti-money laundering legislation fails to prevent dirty money flowing through Europe’s financial centres.
The report found that it is still relatively straightforward to obscure the origin of corrupt assets and money and hide the identity of people moving funds into Europe under current rules, in spite of the public outcry prompted by the release of the Panama Papers in 2016.
The European Commission last year put forward a range of new measures to strengthen the EU’s capacity to crack down on money laundering and give law enforcement agencies greater powers to seize assets belonging to terrorist suspects.