On 17 February 2015 the Central Bank of Ireland published a report of its observations in relation to AML/CFT and financial sanctions compliance.
The report deals with the Irish banking sector, but the issues identified by the Central Bank will be familiar to compliance professionals working throughout the world and it is useful reading for anyone with an interest in this field.
The issues of concern identified by the Central Bank 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 sanctions 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 financial sanctions roles;
• Shortcomings in relation to the coverage and the timing of automated screening of customer databases for financial sanctions purposes.
In the press release accompanying the report, Domhnall Cullinan (Head of Anti-Money Laundering at the Central Bank of Ireland) is quoted as saying:
· “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.”
The Central Bank of Ireland 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 financial sanctions frameworks.
The full report can be downloaded below.
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