The Central Bank published a report on 17 February 2015 of its observations in relation to Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Financial Sanctions (FS) compliance by banks in Ireland. The Central Bank has stated that it expects all financial and credit institutions to carefully consider the issues raised in the report, and to use the report to inform the development of AML/CFT and FS frameworks.

The issues identified, which are set out in the report, include:

  • Incomplete risk assessments that do not effectively consider the inherent Money Laundering / Terrorist Financing risks relevant to the bank;
  • Risk assessments undertaken are very high level and lack thorough analysis of key risks;
  • Failure to include AML/CFT reviews in annual monitoring and internal audit plans;
  • Deficiencies in the Politically Exposed Persons process, including initial screening, the timing of Senior Management approval and the failure to sufficiently identify, verify and document Source of Funds and Source of Wealth data;
  • Non-adherence to stated AML/CFT and FS policies;Failure to ensure the provision of appropriate and comprehensive training to Board and committee members, as well as enhanced training for staff in key AML/CFT and FS roles;
  • Shortcomings in relation to the coverage and the timing of automated screening of customer databases for FS purposes.

Head of Anti-Money Laundering, Domhnall Cullinan said: "The Central Bank acknowledges that satisfactory processes and controls were found in place in some areas. However, the number and nature of issues identified suggests that more work is required by banks in Ireland to effectively manage Money Laundering and Terrorist Financing risk. While the banking sector in Ireland is the specific focus of the report, many of the issues raised are relevant to the broader financial services sector in Ireland." See here for more detail.