In February of this year, the Central Bank of Ireland (CBI) published its planned series of themed reviews and inspections along with its enforcement priorities for 2014. It appears that the focus of these inspections will be in the area of anti-money laundering and counter terrorist financing (AML). The CBI has started assessing the procedures and systems in place in regulated entities to ensure that they are in compliance with the relevant standards, especially in “key risk” areas, which the CBI has alluded to.

It is worth noting that any organisation which is deemed a “designated person” is required to have its own specific AML policy. This includes Investment Funds, even where they outsource their day to day AML functions.

The CBI may request the following information in advance of its inspection:

  • The organisation’s policy and procedures in respect of AML
  • A current organisation structure chart, including the names of directors and senior management and the date of their appointments, with a breakdown of those who have day-to-day AML responsibilities within the organisation
  • The organisation’s due diligence procedures, if different from their policies and procedures in respect of AML
  • The organisation’s AML risk management strategy and details of the risk-based approach employed
  • Copies of all historic board minutes which relate to AML
  • Any relevant outsourcing or similar agreement
  • The suspicious transaction reporting procedures which the organisation has adopted and a full description of the process which the organisation follows to deal with suspicious transaction reporting
  • The organisation’s transaction monitoring procedure
  • The results of any/all historic AML tests and/or external audits which have been carried out
  • Details of the number of suspicious transactions received by the money laundering reporting officer along with the number of any/all historic suspicious transaction reports which were submitted to An Garda Síochána and the Revenue Commissioners
  • Evidence of AML training provided to those who are / have ever historically been involved in the conduct of the business
  • A spread-sheet list of customers since 15 July 2010, split into natural and legal persons, including the date of entry and date of verification
  • A list of customers on which redemptions were placed, prior to the identity of the customer being verified
  • A spread-sheet list of all transactions (including new and additional subscriptions, transfers and partial or full redemptions) processed by the organisation for a one week period, as specified by the date given in the notification letter

The CBI will expect the following to be available for inspection on the first day of their visit to the organisation:

  • All historic AML training records including training material and staff training records
  • The organisation’s list of current “politically exposed persons” and high risk customers
  • Customer due diligence records and transaction/service records
  • Suspicious transaction reports, including the original information provided to An Garda Síochána and Revenue and details of any suspicious transactions which were received by the Money Laundering Reporting Officer, but not reported
  • Access to the organisation’s transaction monitoring system (where applicable)

Given the recommencement of the CBI’s AML themed inspections, Investment Funds should be aware of the need to have proper controls, procedures and policies in place to avoid any hefty financial sanctions which the CBI may impose on foot of an enforcement action.